Central Bank Governor Karahan Made Monetary Policy Presentation in Parliament
Fatih Karahan stated in his presentation at the Grand National Assembly of Turkey (TBMM) that fund outflows have turned toward deposits, the share of Turkish lira deposits has increased, and the market is functioning healthily.
Central Bank of the Republic of Turkey (TCMB) Governor Fatih Karahan announced during his presentation at the TBMM Plan and Budget Committee that outflows from investment funds have largely shifted toward deposits and that the share of Turkish lira deposits has risen above 61 percent.
TBMM Commission Presentation
In accordance with the Central Bank of the Republic of Turkey Law, a presentation regarding activities was made to members of parliament at the TBMM Plan and Budget Committee. TCMB Governor Fatih Karahan stated that geopolitical uncertainties experienced during the year have affected the disinflation process.
Tight Monetary Policy
It was emphasized that the slowdown in domestic demand has become pronounced thanks to the tight monetary policy stance. It was stated that all instruments will continue to be used decisively in line with the price stability target.
Global Risks
The impacts of the US-Iran war and geopolitical risks on energy prices and freight costs were addressed. It was conveyed that global growth is expected to lose momentum in 2026.
Current Account Deficit and Deposit Rates
It was announced that the ratio of the current account deficit to national income remains below historical averages. It was indicated that the tight monetary policy and supportive instrument set are effective in the preference of domestic residents for Turkish lira deposits.
Share of Turkish Lira Deposits
It was observed that inflows into Turkish lira deposits accelerated starting from the second quarter. Along with this process, the share of Turkish lira deposits rose above 61 percent, and outflows in funds largely turned toward deposits.
Fund Liquidations and Systemic Risk
It was recalled that some investment funds have entered a liquidation process. It was emphasized that this process is viewed from the perspective of financial stability and the main objective is to protect confidence in the Turkish lira.
Liquidity Steps
It was stated that repo auction amounts have been increased to facilitate banks' access to liquidity. It was conveyed that borrowing limits have been raised and facilities have been provided in reserve requirements.
State of the Fund Market
It was noted that the fund market as a whole continues to function healthily. The information that outflows in funds have slowed down was shared.