No more need for KKM

As economic management implements measures against foreign exchange-protected deposits (KKM), anti-KKM statements have also begun to emerge from the banking sector.

İş Bankası CEO Hakan Aran, in his speech at the TÜSİAD-Koç University Economic Research Forum, said, "At the point reached today, the TL deposit interest rate is above 50 percent. The period when KKM was attractive is over. I see that there is no need for KKM. We will see KKM disappear."

According to the latest data from the Banking Regulation and Supervision Agency (BDDK), the total size of foreign exchange-protected deposits fell by 82.9 billion TL to 2.8 trillion TL as of the week of November 10. When viewed in dollar terms, the size of KKM has fallen below 100 billion dollars.

It was observed that the measures taken by economic management regarding KKM continued to have an effect.

According to the regulation announced on November 2, the reserve requirement ratio for Foreign Exchange-Protected Deposits (KKM) was increased, and an additional reserve requirement ratio in TL was introduced for foreign currency deposits.

According to the regulation, the reserve requirement ratio for maturities up to 6 months, where KKM is concentrated, was increased by 5 points to 30 percent. The reserve requirement ratio for maturities up to 1 year and for those with a maturity of 1 year or more was increased from 5 percent to 10 percent.

In September, the Central Bank of the Republic of Turkey (TCMB) had increased the mandatory conversion rate for maturities up to 6 months, where KKM is concentrated, from 15 percent to 25 percent, and stated that the coverage ratios for maturities up to 1 year and for those with a maturity of 1 year or more were 5 percent.