Economists evaluate the Central Bank's KKM loss: 'The burden will fall on low-income earners'

The Central Bank (TCMB) announced a loss of 818.2 billion TL in 2023. 

The loss stemmed from open foreign exchange positions and exchange rate difference payments for the currency-protected deposit (KKM) scheme. 

"THE MOST EXPENSIVE EXPERIMENT..."

According to a report compiled by BirGün, economists drew attention to the damage KKM caused to the bank while evaluating the balance sheet. 

Former Chief Economist of the TCMB, Prof. Dr. Hakan Kara, described the loss caused by KKM as "the first installment of the bill for the world's most expensive economic experiment." 

"IF THE CONTINGENCY RESERVES WERE STILL THERE..."

Economist Mahfi Eğilmez had calculated that the figure would come in around this range in a post he made on January 12, 2024.

Eğilmez used the phrase, "The result of wrong economic policy."

Economist Uğur Gürses expressed his view, stating, "This is the picture of the massive loss created by KKM, which was invented to cover up wrong policies and presented to society as a 'very brilliant instrument.' If the contingency reserves that were tapped into and drained were still there, a portion of this loss could have been covered."

CALL FOR RESIGNATION

Strategist Tunç Şatıroğlu stated that those responsible for the loss should resign, noting, "If the loss occurred as a result of a wrong decision, those who signed off on the decision should resign or be dismissed. If the loss occurred due to external factors, those managers who did not take measures until such a large loss accumulated should be held accountable." 

"THE BURDEN WILL AGAIN FALL ON THE LOW-INCOME LABORER"

Prof. Dr. Timur Han Gür, a faculty member at Hacettepe University's Faculty of Economics, stated that KKM has caused major trouble for the Turkish economy, saying, "In fact, this wealth transfer mechanism, which was launched with a wrong diagnosis and no theoretical basis by saying 'interest is the cause, inflation is the result,' is the fundamental reason for the Turkish economy being in disarray. It appears that the burden of lowering inflation will again fall on the low-income wage earner and the laborer."