KKM Falls to Zero: A Quiet Shift in Turkey’s Deposit Landscape

KKM Hits Zero: A Liquidity Pullback

According to the latest weekly bulletin from the Banking Regulation and Supervision Agency (BDDK), the KKM (Currency‑Protected Deposit) balance decreased by 4 million lira last week, falling to zero. While this represents a 100% drop from its 4 million lira level three weeks ago, it is too small a figure to trigger a profound shift in the overall liquidity structure of the banking sector.

Credit and Deposit Landscape

■Total credit volume reached 27 trillion 734 million 257 thousand lira, up 4 trillion 984 million 273 thousand from the previous week.

■Total deposits rose to 32 trillion 316 million 474 thousand lira, up 506 billion 469 million.

■Consumer loans slipped to 3 trillion 423 million 504 thousand lira, a decline of 23 million 33 thousand.

■Installment commercial loans increased by 9 billion 340 million, reaching 4 trillion 230 million 331 thousand lira.

■Individual credit card debt fell by 2% to 3 trillion 353 million 271 thousand lira.

Legal Capital and Non‑performing Loans

■Legal capital climbed to 5 trillion 983 million 438 thousand lira, up 47 billion 505 million.

■Non‑performing loans rose to 838 billion 968 thousand lira, a jump of 5 billion 663 million.

■623 billion 576 thousand lira was set aside as a special allowance.

Implications of a Zero KKM

■The cessation of currency‑protected deposits signals banks’ need to re‑configure their foreign‑exchange reserves.

■A zero KKM underscores the necessity to re‑evaluate hedging strategies amid volatile exchange rates.

■Public expectations for bank transparency and governance may rise.

Volkan Şen: The disappearance of KKM reflects more a short‑term liquidity realignment than a systemic crisis. It highlights banks’ efforts to safeguard foreign‑currency positions, but it also serves as a potential risk indicator for investors.