Turkey’s central bank on Wednesday announced that it plans to terminate its foreign exchange-protected lira deposit scheme next year as part of its macroprudential policy simplification efforts, the state-run Anadolu news agency reported.
The Central Bank of the Republic of Turkey (CBRT) detailed the decision in its “Monetary Policy for 2025” roadmap, which outlines key policies and communication strategies for the coming year. The bank also said it would reduce the number of its monetary policy committee meetings to eight annually, down from monthly sessions.
The FX-protected deposit scheme, introduced in late 2021 to support the lira’s value, has seen a significant decline in use. The central bank reported that KKM balances fell to $34.2 billion as of December 20, 2024, while the share of Turkish lira deposits rose to 58.6 percent of total deposits.
The announcement comes as annual inflation, which peaked at 75 percent in May of this year, dropped to 47.09 percent in November. The central bank credits tight monetary and fiscal policies for the decline and expects annual inflation to end 2024 at around 44 percent.