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.
Don’t just follow the news—understand it.
The IntelliNews PRO service includes access to reports, exclusive market data, and more news that decision-makers care about. Stay ahead of the market with IntelliNews PRO.
Sign Up NowRelated Articles
S&P upgrades ratings of Freedom subsidiaries to ‘BB-’
S&P Global Ratings has upgraded the credit ratings of several subsidiaries of Nasdaq-listed Freedom Holding, raising ratings on Freedom Finance, Freedom Finance Europe, Freedom Finance Global and ... more
Kazakhstan’s Freedom fintech sets out to emulate and exceed Revolut in Europe
Freedom Holding Corp (Nasdaq: FRHC) is positioning itself to expand deeper into Europe’s financial services market with plans to launch a digital bank in France, backed by a €500mn ($572mn) ... more
Fintech Freedom Holding aims to make France key entry point into EU with €500mn investment
A French banking licence would open the way to a new phase in the international expansion of Nasdaq-listed fintech group Freedom Holding Corp. That’s the expectation of Freedom, a company ... more