Hakan Kara calculates the cost of FX-Protected Deposits: 'The result of the most expensive economic experiment in history'

Bilkent University faculty member and former Central Bank chief economist Prof. Dr. Hakan Kara announced the economic losses suffered by the Central Bank of the Republic of Türkiye (TCMB) last year in a post on his social media account.

Türkiye was introduced to the FX-Protected Deposit (KKM) system on the night of December 20, 2021. Immediately after the announcement that the system would be implemented, the Turkish lira gained 40 percent in value against foreign currencies.

Former Central Bank chief economist Hakan Kara calculated the Central Bank's 2023 loss by also including negative reserves.

DOLLAR EXCHANGE RATE ROSE AGAIN

However, the dollar, which fell from approximately 16 lira to 11 lira in December 2021, has exceeded 32 lira today, 28 months later.

LOSS IS 833.4 BILLION TL

In the 2023 Annual Report of the Central Bank of the Republic of Türkiye (TCMB) released today, it was announced that the KKM loss amounted to 833.4 billion TL.

"THE MOST EXPENSIVE ECONOMIC EXPERIMENT IN HISTORY"

Following the announcement of the KKM loss, former TCMB chief economist Hakan Kara shared on his social media account, "As a result of the most expensive economic experiment in history, the Central Bank incurred a loss of 818 billion TL last year, almost entirely due to KKM. Additionally, there is a valuation loss of 318 billion due to negative reserves. According to international accounting standards, the total loss is 1 trillion 136 billion TL."

News Source: 12punto