Turkey's Forex Depositors Return in Droves, Abandoning Lira Scheme

Turkish depositors have largely converted their funds back to dollars after withdrawing from state depreciation-protected accounts, as Ankara begins winding down the scheme. The scheme, known as KKM, was adopted in 2021 to halt the lira crash but has faced challenges as the lira has continued to depreciate. Initial data and senior bankers suggest that around two-thirds of the accounts that were initially converted to lira have been converted back to forex, while the rest moved into regular lira accounts. The central bank aims to reduce the volume of KKM accounts to strengthen its monetary transmission mechanism.