Turkey: Foreign currency deposit effect

by karakoyclub

According to the weekly data released by the Central Bank of the Republic of Turkey, total foreign currency deposits decreased by $2.13 billion in the week of February 11, adjusted for the parity effect. Compared to the previous week, foreign currency deposits of resident real persons decreased by 680 million dollars, and foreign currency deposits of domestic legal entities decreased by 1.45 billion dollars.

 

Looking at all FX deposits, it was observed that the decrease continued. In the given week, the foreign exchange accounts of domestic residents decreased from 225.1 billion dollars to 223 billion dollars. The first data on currency protected deposits converted from foreign currency to TRY, which is one of the items evaluated in terms of contribution to the Central Bank reserves, showed that this item contributed at least 1.5 billion dollars to the CBRT reserves in the relevant week. Despite the contribution of currency-protected deposits, the decrease of 2.6 billion dollars in the swap stock was effective in the decrease. Chairman of the CBRT, Mr. Şahap Kavcıoğlu, in his speech on January 27, used the phrase “The size of API and swap transactions is being examined”.

 

The financial product at the center of the lira investment incentive, The record increase in foreign currency accounts before it was introduced by President Mr. Recep Tayyip Erdoğan left its place to stability after 20 December with the effect of currency conversions. In this context, we observed that TRY progressed in somewhat stable bands and lower and less volatile levels were observed in the exchange rate. Since the beginning of the year, the withdrawal of foreign currency accounts, which started with real persons, continues together with the withdrawals from legal entities.

 

In the coming period, we will be monitoring the developments on the currency protected deposit product in terms of the de-dollarization process. Depending on the negative news flows and the negative real return effect created by inflation, the movements and preferences in the accounts will be important. The financial dollarization rate is at 58.74% as of the week of February 11, we see a slight decrease from the rate that was 60.18% in the previous week. This rate was 53.7% in the same period of the previous year.

Kaynak Tera Yatırım
Hibya Haber Ajansı

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