Article

The CBRT terminates FX-protected deposit scheme

The CBRT terminates FX-protected deposit scheme
Published Date
Aug 25 2025
Authored By
Image of Umut Gürgey
Umut Gürgey Partner, Istanbul
The Central Bank of the Republic of Türkiye (“CBRT”) has announced with its decision dated August 23, 2025 numbered 2025-45 (“decision”) that, with effect from August 23, 2025, no further FX-protected deposit scheme (Kur Korumalı Mevduat) (“KKM”) accounts may be opened or renewed. Existing KKM accounts will be allowed to run until their contractual maturity; thereafter the underlying regulations will be repealed. YUVAM accounts, which serve Turkish citizens residing abroad, remain unaffected by the decision.

This development represents a significant step in the ongoing simplification of Türkiye’s macroprudential framework and the transition to a more predictable monetary policy environment.

Background

The KKM scheme was introduced in December 2021, as a temporary measure to address exchange rate volatility, offering depositors a return indexed to either the Turkish lira ("TRY") deposit rate or the depreciation of the TRY against foreign currencies, whichever was higher. The programme saw rapid growth, with total balances exceeding USD 140 billion at its peak in August 2023. However, consistent with the CBRT’s 2025 Monetary Policy Framework, the stock of KKM has been steadily reduced, standing at approximately USD11 bn on the eve of the Decision.

The CBRT has long signalled its intention to phase out KKM as part of its broader strategy to simplify the macro-prudential architecture and realign monetary transmission with conventional instruments. In line with the phase out plan, the opening and renewal of KKM accounts for legal entities had been terminated in February 2025. The decision now confirms that, once all outstanding KKM accounts have matured, the secondary legislation governing the scheme will be also repealed and will cease to have legal effect.

Next steps

The termination of the KKM scheme is expected to reduce contingent foreign exchange risk on the CBRT’s balance sheet and to support fiscal discipline and price stability. Market participants, including financial institutions, should review their liquidity management, contractual arrangements, and accounting practices in light of this regulatory development. The CBRT also announced that it has revised its regulations on reserve requirement remuneration and commission practices tied to the scheme.