Shift to TL deposits accelerates following fund crisis
While 634 billion lira exited money market funds in 4 weeks, the volume of TL deposits broke a record by exceeding 20.5 trillion lira.
12punto
The volatility experienced in the markets in recent weeks has significantly increased investor interest in Turkish Lira deposits. It was observed that a significant portion of the high-value resources exiting money market funds shifted to TL deposits, while some were evaluated in repo.
According to data from the Central Bank of the Republic of Turkey (TCMB), the size of money market funds, which was at the 2.3 trillion lira level on August 28, declined to 1 trillion 667 billion lira as of September 25. Thus, the 4-week decline in these funds reached 634 billion lira.
During this period, the size of money market funds decreased by 27.5 percent. In other words, approximately 28 lira out of every 100 lira in the funds exited during the four-week period. The highest outflow was recorded in the week of September 11-18 with 456 billion lira.
During the same period, there was a remarkable increase in the amount of money in repo. The repo balance, which was 928 billion lira on August 28, rose to 1 trillion 325 billion lira as of September 25. The 4-week increase in repo was calculated as 397 billion lira.
On the TL deposit side, a historical peak was observed. According to the daily data of the Banking Regulation and Supervision Agency (BDDK), the volume of TL deposits in banks reached its highest level as of September 29, rising to 20 trillion 518 billion lira.
In the BDDK data, it was seen that the TL deposit volume, which was 19 trillion 466 billion lira on September 4, rose to 20 trillion 81 billion lira on September 25. In this process, the increase in TL deposits reached 615 billion lira.
There was limited change in foreign currency deposit accounts. The size of foreign currency deposit accounts, which was 257.4 billion dollars on September 4, stood at the 258.1 billion dollar level as of September 29.
US investment bank Goldman Sachs also reported in a note published last week that about half of the 13 billion dollars that exited money market funds in September was transferred to domestic foreign currency and gold deposits. However, the latest data revealed that TL deposits maintain their strong appeal for investors.