Turkey exits FX-protected deposit scheme

Turkey is ending a scheme protecting deposits from currency depreciation that is estimated to have cost $60 billion, in another step to abandon unorthodox economic policies that triggered a lira crisis several years ago.

Turkish central bank decided to terminate the opening and renewal of fx-protected scheme accounts effective on August 23, it said in a statement, adding that accounts opened before this date will remain valid until their maturity. The central bank also said that following the termination, it has revised its regulations on reserve requirement remuneration and commission practices tied to the scheme.

Under the scheme, individuals and businesses were able to deposit lira in special accounts that were protected against exchange rate losses. The lira lost 44% of its value against the dollar in 2021, 29% in 2022, 37% in 2023, and 16% last year.