How Does Support for Conversion from CBRT Foreign Exchange Deposit Accounts to TL Time Deposits Work?

Inflation and dollar expectations for the end of the year rose in the CBRT survey
Inflation and dollar expectations for the end of the year rose in the CBRT survey

In the statement made by the Central Bank of the Republic of Turkey (CBRT), it was stated that the CBRT decided to provide support to deposit and participation fund holders in the event that foreign currency deposit accounts and participation funds in foreign currency are converted into Turkish lira time deposit accounts at the request of the account holder.

In the statement, in order to support financial stability by increasing the share of Turkish lira in the total deposit/participation funds in the banking system, on December 20, 2021, real persons residing in Turkey who have a foreign currency deposit account in US dollars, euros and British pounds or a participation fund in foreign currency, will be able to open their said accounts with time deposits. It was stated that they can benefit from the support if they convert the Turkish lira into a deposit/participation account.

Accounts can be opened with a maturity of 3, 6 and 12 months. The interest/profit share that will be charged to the Turkish lira time deposit accounts to be opened and the exchange rate at the end of the account opening and maturity will be compared, and the deposit and participation fund holder will be paid at the higher rate. Regardless of the exchange rate at the opening of the account and the exchange rate at the end of the account, the principal and interest/profit share amount will be paid to the customer by the bank. If the amount to be calculated over the expiry rate is greater than the principal and interest/profit share; The difference will be borne by the CBRT. In case of withdrawal of money from the account before maturity, the support will not be available.

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