Turkey to end FX-protected lira deposits next year

The Turkish central bank plans to end the forex-protected lira deposits (KKM) scheme in 2025 after its balance fell to $34.2 billion as of December 20 2024.

The share of Turkish lira deposits within total deposits rose to 58.6 percent, and the share of KKM within total deposits fell to 6.2 percent, the central bank said in its 2025 monetary policy report.

The one-week repo rate will continue to be the main policy tool, with the bank maintaining monetary tightness for sustained price stability and achieving a 5 percent medium-term inflation target.

The floating exchange rate regime will continue in 2025, with exchange rates determined under free market conditions based on supply and demand balance.

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The central bank did not commit to any exchange rate level and will not conduct FX buying or selling transactions to determine the level or direction of exchange rates.

The central bank plans to hold eight monetary policy committee meetings in 2025 instead of monthly meetings. It will also publish its financial stability report biannually, maintaining it as a key communication tool.