Turkey: Parity effect on foreign currency deposits

According to the weekly data released by the Central Bank of the Republic of Turkey, total foreign currency deposits increased by 1.51 billion in the week of May 13, adjusted for the parity effect. Compared to the previous week, foreign currency deposits of real persons decreased by 119 million dollars, while foreign currency deposits of legal entities increased by 1.27 billion dollars.

Looking at foreign currency deposits, it was seen that there was a decrease of 950 million dollars in the headline data for the week of May 13. The lira is under pressure in an environment where global risk sensitivity has worsened due to widening current account deficit, rising inflation and excessively loose monetary policy. Currency-protected deposits, which are also followed on the basis of CBRT reserves, reached a size of 848.9 billion TRY last week. The previous week, this figure was 819 billion TRY. The effect of the acquisition in Garanti BBVA was observed in the weekly securities statistics of foreign investors.

At the current level, we will continue to follow the trends in the FX-linked product focused on dollarization, reserve cumulation and financial stability. In addition, although a breakdown of FX and TRY accounts has not been published, we evaluate this distinction as 55% conversion from FX to TRY and 45% direct TRY account opening in line with the statements of the Ministry of Treasury and Finance. The financial dollarization rate is at the level of 55.43% as of the week of May 13, we see a slight increase from the rate that was 55.29% in the previous week. This rate was 55.3% in the same period of the previous year.

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Hibya Haber Ajansı