KKM deposits decline, show data

ANKARA

Money parked at the FX-protected deposit accounts, also known as KKM, has declined for the first time since the start of the year.

KKM deposits fell around 39 billion Turkish Liras from 3.41 trillion liras on Aug. 18 to 3.37 trillion liras ($124 billion) as of Aug. 25, the weekly data from the Banking Regulation and Supervision Agency (BDDK) showed.

In late August, the Central Bank announced steps toward unwinding the KKM scheme.

It stopped targeting conversion from foreign currency deposits to FX-protected lira deposits under KKM as part of the simplification process.

“The regulations are intended to increase Turkish lira deposits while decreasing FX-protected deposits by ensuring the transition from FX-protected accounts to Turkish lira deposits,” the bank said in a statement on Aug. 20.

Separate data from the Central Bank showed that residents’ foreign currency deposits with local banks increased from $173.9 billion on Aug. 18 to $178.6 billion on Aug. 25.

Both real persons and legal persons increased their holdings of foreign currency deposits. Real persons increased their FX deposits by 3 percent week-on-week to $106.1 billion, while the increase for legal persons was 2 percent to $72.45 billion.

The Central Bank also reported that its gross foreign exchange reserves declined slightly on a weekly basis from $76.3 billion to $75.96 billion as of Aug. 25. But its gold reserve increased from $40.78 billion to $41.3 billion.