The bill for the Foreign Exchange Protected Deposit scheme is staggering!

The AKP government introduced the Foreign Exchange Protected Deposit (KKM) scheme in 2021 to lower the heat on the dollar.

Although the Turkish Lira gained 40 percent against the dollar in the initial phase following the announcement of the KKM, which was launched in the third week of the tenure of the then Minister of Treasury and Finance Nureddin Nebati, today the Dollar and Euro continue to break record after record against the TL.

Even though Minister of Treasury and Finance Mehmet Şimşek, who took office after the May 14-28 elections, has given signals of exiting the KKM, the bill for the scheme in question is staggering.

According to the report in Sözcü; the heavy bill that the Foreign Exchange Protected Deposit (KKM) account has imposed on the public has finally come to light. The bill for KKM accounts to the Central Bank was 833 billion 420 million TL in 2023. This massive amount, paid from public resources to those with money in the bank, will be disclosed for the first time at the Central Bank's ordinary general assembly to be held on April 30. In 2022, 72.8 billion TL was paid for KKM from the Central Bank and a total of 152 billion TL from the budget. Thus, the total bill imposed on the public by the economic model that the then Minister of Treasury and Finance Nureddin Nebati called the 'sparkle in the eyes' reached 1 trillion 58 billion 285 million 607 thousand 467 liras.

THE CENTRAL BANK HAD NOT PROVIDED INFORMATION

The Central Bank had announced an operating loss of 818.2 billion for 2023 on April 15, but had not provided information regarding the KKM loss. The Central Bank's 2023 Annual Report, which also includes the KKM loss, has emerged. In the report, the information that a massive payment of 833 billion 420 million liras was made to KKM account holders in 2023 was included as a 'footnote' under the profit/loss table on page 92. This data revealed that the loss stemming from KKM was greater than the Bank's operating loss, and that the Central Bank shifted from profit to loss due to the KKM practice. The report also provided information that the payment made to KKM account holders in 2022 was 72 billion 843 million liras. Payments related to KKM accounts were entirely shifted to the Central Bank's burden in 2023 so that the budget deficit would appear low and the Treasury would not have to take on additional debt. 92.5 billion was paid from the budget for KKM in 2022, and 59.5 billion in 2023. Thus, the 2-year KKM burden exceeded 1 trillion 58 billion.

PAID 78.6 BILLION IN INTEREST TO THE TREASURY

The Central Bank paid 133 billion in interest against 286 billion in interest income last year, earning a net 153.5 billion from interest. The Central Bank made its highest interest payment to the Treasury with 78.6 billion liras. The Central Bank's net non-interest loss was 997.4 billion due to the impact of the 833.4 billion KKM payment. 16.9 billion liras of this loss stemmed from foreign currency and gold trading. The Central Bank, which also earned a net gain of 23.2 billion from net commissions and services, closed 2023 with a loss of 818.2 billion. If there had been no KKM payment, the Central Bank would have made a 'profit' of 12.7 billion in 2023.

News Source: 12punto