The Continuity of Households and Companies' Preference for TL Assets

Recent Developments in Foreign Currency Deposits

According to the latest analysis published by the Central Bank of the Republic of Turkey (CBRT), significant changes have been observed in foreign currency (FC) deposits recently. During this period, the increase in FC deposits was influenced by nominal increases stemming from exchange rate and price effects. However, it has been emphasized that the FC deposits adjusted for exchange rate and price effects have shown a limited increase due to the termination of Protected Deposit Accounts (PDA) and gold purchases.

Gold Prices and TL Deposit Share

As noted in the report, although gold prices have increased rapidly, the share of Turkish Lira (TL) deposits has remained at historical average levels. This situation indicates that the preference for TL assets among households and companies has largely been preserved.

Developments in Deposits and Monetary Policy

Particularly as of August 2023, the highest level of PDA accounts has resulted in the total of PDA and FC deposits exceeding 340 billion USD. However, due to the restructuring of relationships with foreign currency and the effects of tight monetary policy practices, preferences for TL deposits have been maintained robustly.

Nominal Increase Projections in FC Deposits

It has been noted that by the end of 2024, FC deposits are expected to rise to 238 billion USD, of which 50 billion USD will come from 31 billion USD in gold deposits, and 15 billion USD from deposits in euros. Considering exchange rate and price effects, only a nominal increase of 19 billion USD has been experienced in FC deposits.

Global Effects and Investment Preferences

The increase in global gold prices has played a significant role in local investors' preferences. The high returns from gold in September and October have increased the demand for gold among depositors. Total gold deposits are expected to rise by approximately 76 tons starting from 2024, nearing 6.5 billion USD.

In conclusion, while recent nominal increases in FC deposits stem from exchange rate and price effects, the preservation of TL asset preferences stands out as an important indicator.