Exchange Rate-Protected TL Deposits Drop Again While Loans and Overall Deposits Rise

Turkey’s exchange rate-protected Turkish lira (KKM) deposit accounts continued their downward trend in the week ending July 25, according to the Banking Regulation and Supervision Agency (BDDK) weekly report.

KKM balances fell from TRY 506.5 billion to TRY 489.2 billion, marking a notable retreat as depositors continue shifting towards traditional accounts and investment alternatives.

 Lending and Deposit Metrics on the Rise

Despite the decline in KKM, total loans increased from TRY 19.77 trillion to TRY 19.92 trillion, while overall deposit volume also rose from TRY 23.34 trillion to TRY 23.60 trillion.

Key figures from the same week include:

• 🏦 Consumer loans climbed from TRY 2.39 trillion to TRY 2.42 trillion

• 💳 Personal credit card debt grew from TRY 2.24 trillion to TRY 2.29 trillion

• ⚠️ Non-performing loans (NPLs) rose slightly from TRY 441.3 billion to TRY 442.5 billion

Interpreting the Trend

The continuous drop in KKM accounts indicates waning interest in lira protection schemes, possibly driven by declining FX volatility, rising real returns in regular TL accounts, or a broader shift in monetary policy expectations.

Meanwhile, the increase in credit usage and personal debt signals that consumers continue to rely heavily on borrowing, even as non-performing loans edge upward—a trend warranting close monitoring by financial authorities.