Lyraization has evaporated

TOeconomy With the effect of the Currency Protected Deposit (KKM) application initiated by the Turkish government at the end of 2021, the “liraization” strategy that entered our lives in 2022 also evaporated. The word “liraization” was not included in the text of the resolution of the Monetary Policy Committee (PPK) of the Central Bank (CBRT) convened yesterday under the presidency of Gaye Erkan. Treasury and Finance Minister Mehmet Şimşek also revealed the failure of the ‘liraization’ strategy, stating that after the Central Bank’s interest rate decision, “Our money is stable and safe is the solution most effective way to get rid of the scourge of dollarization”. . In fact, the indexation of TL deposits to foreign currency, along with the KKM, prompted dollarization, not liraization.

TABLE IN FRONT OF THE EYES

The ratio of KKM accounts and foreign currency accounts to total funds reached 65.5 percent on June 16. Taking into account all foreign currency and foreign currency indexed assets of domestic residents, the size of the actual picture reveals the ‘scourge of dollarization’ in Şimşek’s words. According to data from the Banking Supervision and Regulation Agency (BDDK), KKM’s total rose by TL 52.3 billion last week to TL 2.63 trillion ($111.8 billion). Thus, the size of FX and FX-indexed assets in banks reached $316.1 billion as of last week. Also, since it has no data, this account does not include currency and gold that goes under your pillow.

Individuals sold currency, companies received $2.2 billion

According to data from the Central Bank, foreign currency deposits of residents in the country increased to 176.3 billion dollars in the week ending June 16. Total deposits in foreign currency adjusted for the parity effect increased by 1.740 million dollars. While foreign currency deposits from individuals decreased by $461 million, foreign currency deposits from legal entities increased by $2.2 billion.

Credit card interest rates increased after the decision

The Central Bank increased the policy rate from 8.5% to 15%. The maximum contractual interest rate to be applied to credit card transactions after the Central Bank’s interest rate decision will increase from 1.36 percent to 1.91 percent for TL transactions as of January 1. August. The maximum default interest rate for credit card transactions will also increase from 1.66% to 2.21% for TL transactions effective August 1.