Turkey has officially ended its Foreign-Exchange protected deposit scheme, a program introduced in late 2021 to stabilize the lira during a period of sharp currency depreciation. The measure, known locally as “KKM,” guaranteed savers compensation for exchange rate losses if the lira fell against foreign currencies.
The scheme was widely used by both households and companies, drawing tens of billions of dollars into lira accounts. While it helped curb immediate pressure on the currency, critics argued it carried significant fiscal costs and delayed broader structural reforms.
In recent months, the government had been gradually phasing out the program as part of a broader shift toward more conventional economic policies. Officials said the decision to end the scheme reflects improved confidence in the lira and efforts to reduce reliance on short-term stabilization tools.
Analysts note that the move will be closely watched by investors, as it tests whether the lira can remain stable without state-backed protection. The government has signaled that its focus will now be on monetary tightening and measures to attract sustainable foreign investment.
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