BDDK data reveals: 11-year record in TL deposits

The volatility in markets in recent months and the implemented tight monetary policy have clearly shifted investor preferences toward the Turkish Lira. While the pressure for real returns continues in traditional investment vehicles such as the stock market, gold, silver, and real estate, high-interest TL deposits have become the prominent option.

While inflation was recorded at 17.76 percent in the January-June period, it is noted that the primary vehicle providing positive real returns during this period was high-interest TL. According to BDDK data, the share of TL in total deposits reached 62 percent, hitting its highest level in the last 11 years.

CBRT data also pointed to a decline in foreign currency deposits held by domestic residents. Foreign currency deposits, which stood at 238 billion dollars in January, fell to 216 billion dollars as returns remained weak and TL interest rates became attractive.

FOREIGNERS TURN TO BONDS

The high-interest environment has been effective in the preferences of not only domestic savers but also foreign investors. According to CBRT data for the week ending July 10, while foreigners purchased 33 million dollars in stocks, purchases on the bond side reached 1 billion 225 million dollars.

The high interest rates offered by Turkey, the environment created for carry trade transactions, and the controlled course of the exchange rate are cited among the effective factors in the shift of foreign funds toward the bond market in recent weeks. In the same week, an increase of 3.6 billion dollars was recorded in the CBRT gross reserves.

Meanwhile, the weak outlook continues on Borsa İstanbul. While the BIST 100 index is trading approximately 8 percent below the peak it saw in May, it is noted that a significant portion of the gains made since the beginning of the year stems from the rise in the first two months.

The decline in gold and silver in global markets also affected investor preferences. In a period where gold lost 7 percent and silver lost 21 percent on an ounce basis, the return of gram gold on a TL basis remained at 1.9 percent. While the return of the currency basket hovered around 8 percent, the Residential Property Price Index recorded a real loss of 5.8 percent, despite a 24.5 percent annual increase.

On the market calendar ahead, the CBRT interest rate decision on July 23 and the expected Moody’s Turkey assessment on July 24 stand out. Tensions on the US-Iran line, oil prices, and global risk appetite will also continue to be decisive in the course of investment vehicles.