Step from the Central Bank to support TL deposits: Interest rates applied to KKM have changed

The Central Bank has continued its steps aimed at supporting the transition from Foreign-Exchange-Protected Deposits (KKM) to Turkish Lira (TL) deposits and reducing KKM accounts. Accordingly, the lower limit for KKM interest rates has been reduced from 80 percent of the policy rate to 70 percent. The changes will be effective as of July 22, 2024.

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Step from the Central Bank to support TL deposits: Interest rates applied to KKM have changed

With an implementation instruction sent to banks by the Central Bank of the Republic of Turkey (TCMB), the lower limit for the interest rate applied to KKM accounts has been reduced from 80 percent of the policy interest rate to 70 percent. The exchange rate difference amount to be paid by the TCMB at the end of the maturity period will continue to be calculated based on the policy interest rate.

Furthermore, it was reported that no payments can be made under the name of "additional return" for newly opened or renewed accounts. Thus, it is expected that the decline in KKM accounts will accelerate and the share of TL deposits will increase.

The changes will be effective as of July 22, 2024.

Previously, the lower limit for the interest rate applied to KKM accounts corresponded to 40 percent, which is 80 percent of the 50 percent policy rate. With the new implementation instruction, the 40 percent level has been reduced to 35 percent.

News Source: AA