Interest Rates On Deposits Are Escalating..

Messages sent to people’s phones over the weekend show that banks that cannot meet the TRY deposit ratio requested by the regulatory authorities offer up to 30% interest for 32-35 days deposits. When I check out the mobile apps of these banks, I see that similarly, they offer the same rate, trying to sell it as “exclusive rate for you”. As a matter of fact, it is not exclusive at all, but it is being marketed as exclusive out of necessity.


However, banks are being cautious. They do not want to offer these rates for the long term.

As inflation is going down due to both the base effect and the formulation of TurkStat, and there is an invisible ceiling limit set on loan rates, it is not sustainable to offer such high deposit rates for long periods. Under no circumstances, it will not be possible for the banks to make the same astronomical profit they had made in 2022. Perhaps for this very reason, paying bonus interest on FX volatility-hedged deposits was made no longer a requirement for banks. Otherwise, the maturity mismatch between deposits and loans would have placed an overwhelming burden on banks. I think this method might help ensure that foreign currency investors keep their money in TRY deposits.


“A State of Constant Crisis Overwhelms the Society.”


On the other hand, the hesitation continues about whether the Dollar/TRY will remain at this level until the elections. Accordingly, the Central Bank and the BRSA are expected to take new steps with regard to foreign currency assets of corporations and individuals. It’s almost like banks are giving out bonuses to those who deposit their dollars. This is an attempt to create a forced “reverse dollarization process”. As I pointed out in my previous articles, it would make more sense to take these measures when the financial climate was calmer. When it is done in hard times like these, funds can be expected to flee the system.


The truth of the matter is that, under a state of constant crisis or emergency conditions, authorities tend to develop controlling behaviour. However, by the outsider, this excessive control can sometimes be perceived as “panicking” or “operating according to a hidden agenda”. This being the case, in a country characterised by insufficient savings, funds tend to flow out of the country, not to mention foreign capital’s unwillingness to come to Turkey.


People go by their daily tiresome routines and when they just sit and try to relax at the end of their working day, they say to themselves “Another challenge completed!” But so often I see their hearts get broken when I try to warn them about the side effects of what they have accomplished. As I have many times witnessed that even those who were not pursuing power find themselves in a dilemma about “why they do and for whom they do it” when they rise to a position of power, I know that it’s better to wait until the storm passes. After all, an economic Marshall Law cannot last forever. If it lasts longer than it should be, it will tire everyone out emotionally, eventually causing people to violently protest.