The deposit rates offered by banks in Turkey are high enough to encourage customers to switch from FX to Turkish lira, Bloomberg quoted Akbank (AKBNK) CEO Kaan Gur on February 13 as saying.
Akbank is the third-largest private bank in Turkey. Turkey’s government aims to curb FX-linked accounts at local banks.
The central bank’s decision last week to pay interest on some portions of required reserves helped push up deposit rates, according to Gur.
The weighted average lira deposit rate with maturities of up to three months has risen to 51% as of February 2 from 49.6% a week earlier. Official inflation remains above 60%.
Lira deposits that have a maturities of up to three months make up almost the whole deposit base in the country.
This environment is supportive of switching to lira deposits from the FX-protected deposit programme (KKM), which was introduced in December 2021 to halt lira’s slide, according to Gur.
Since elections held in May, Turkey has sought to phase out the KKM programme, which requires the state to compensate deposit holders against lira depreciation.
The KKM deposits fell to TRY2.4 trillion ($78bn) as of February 2 from a peak of TRY3.4 trillion in August.
Demand for loans in foreign currencies has also started to pick up as the lira stabilised, Gur has also said.
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