KKM in Turkey Continues to Decline: BDDK Report

The latest data from the Banking Regulation and Supervision Agency (BDDK) for the week ending March 27, 2026, shows that the government’s “liralization” strategy is maintaining its momentum. KKM in Turkey (FX-protected deposit accounts) continues its steady downward trajectory, falling to 1.53 trillion TL as investors slowly pivot toward alternative Turkish Lira instruments. This gradual liquidation remains a cornerstone of the current economic administration’s plan to simplify the banking sector’s liability structure.

Credit Volume Hits Record High of 24.5 Trillion TL

While KKM in Turkey declined, the overall credit volume in the banking sector reached a new record. Total credit expanded by approximately 228 billion TL in a single week, bringing the total to 24.546 trillion TL.

The expansion was primarily driven by the individual segment:

• Consumer Loans: Reached 3.13 trillion TL.

• Individual Credit Cards: Surged to 2.93 trillion TL, reflecting continued high levels of domestic consumption despite inflationary pressures.

• Commercial Loans: Totaled 18.49 trillion TL, showing more moderate growth compared to the retail side.

Asset Quality and Capital Resilience

Despite the massive expansion in credit, the banking sector maintains a strong capital buffer. The KKM in Turkey report highlights that the sector’s legal equity rose to 5.54 trillion TL, providing a robust defense against potential market volatility.

However, there are minor signs of strain in asset quality. Non-performing loans (NPLs) increased slightly to 666.7 billion TL, a metric regulators are closely watching as the economy navigates high interest rates and regional uncertainty.

Balancing Foreign Exchange Positions

The BDDK report also revealed a balanced approach to foreign exchange (FX) management.

• Total Deposits: The sector’s total deposits dipped slightly to 27.93 trillion TL.

• FX Neutrality: Banks have successfully minimized the gap between on- and off-balance-sheet FX positions. The net general FX position totaled 20.6 billion TL, indicating that the sector is well hedged against currency fluctuations.

The continued decline of KKM in Turkey, coupled with record-breaking credit volumes, suggests a banking sector actively transitioning while remaining heavily used by a consumer base seeking to maintain purchasing power through credit.