TL deposits hit a record high in recent years: The decline in KKM continues

Although a slight uptick in foreign currency deposits has been observed alongside the recent volatility in exchange rates over the past few weeks, the share of Turkish Lira (TL) deposits continues to rise.

According to data from the Banking Regulation and Supervision Agency (BDDK), as of August 16, standard Turkish Lira deposits exceeded 9 trillion liras for the first time in history, and their share of total deposits reached 52.65 percent, marking a 6.3-year high since levels seen in May 2018.

While the share of standard Turkish Lira deposits continues to rise, the share of foreign-exchange-protected deposits (KKM) continues to decline.

In the same week, the share of KKM (FX-protected deposits) in total deposits fell below 10 percent, returning to levels last seen in March 2022, when it was first introduced.

According to BRSA data, as of August 16, the volume of standard Turkish Lira deposits reached a historic high of 9 trillion 106.2 billion lira.

In the same week, total deposits rose to 17 trillion 294.8 billion liras, while the share of standard Turkish Lira deposits in total deposits reached 52.64 percent, the highest level since the 53 percent level seen on May 18, 2018.

Meanwhile, the exchange-rate-protected deposit scheme (KKM) fell to 1 trillion 659.7 billion liras, with its share of total deposits dropping below 10 percent for the first time since March 2022, reaching 9.6 percent.

The share of KKM (FX-protected deposit accounts) in total deposits reached its peak at 26.24 percent in August of last year. Within one year, in line with the Central Bank's policies, this share has fallen from its peak to below 10 percent.

In the same week, the share of foreign currency deposits in Turkish Lira terms within total deposits also fell to 37.75 percent. The share of foreign currency deposits has remained below 40 percent since mid-May.