17 Trillion Lira Accumulated in Deposit Accounts and Expectations for Interest Rate Cuts Strengthened

According to Banking Regulation and Supervision Agency data, there is approximately 17 trillion liras in Turkish lira time deposit accounts. The announcement of monthly inflation at 1.84 percent in September and the decline in annual inflation have increased expectations that the Central Bank may implement an interest rate cut.

Distribution of TRY Time Deposits

According to Banking Regulation and Supervision Agency data, as of the week of October 2, 8.6 trillion liras belong to individuals, 6.4 trillion liras to businesses, and 1.8 trillion liras to official institutions in TRY time deposits.

Expectations for Interest Rate Cuts

The announcement of monthly inflation at 1.84 percent in September and the decline in annual inflation strengthened expectations that the Central Bank could implement an interest rate cut. The Central Bank Monetary Policy Committee had kept the policy rate constant at 37 percent on September 10.

Year-End Interest Rate Scenarios

The scenario of making one-point cuts at the meetings on October 22 and December 10 is on the agenda. According to this scenario, the policy rate is expected to finish the year at the 35 percent level.

Changes in Deposit Returns

Every 1-point drop in deposit interest rates directly affects the net earnings obtained in a 32-day maturity. While a saver evaluating 100 thousand TL at 38 percent interest obtains a net return of approximately 2,748.50 TL, if the interest rate drops to 37 percent, this amount decreases to approximately 2,676.17 TL.

Money Market and Inflation Status

It is reported that the daily returns of money market funds vary between 0.09 percent and 0.10 percent. While monthly inflation materialized at 1.84 percent in September, it is stated that the net return of a 32-day time deposit is at the 2.75 percent level.

Course in Foreign Exchange and Gold Markets

While the dollar's increase over the past month was around 1.5 percent, the euro declined by 2 percent against the TL in the same period, and gram gold recorded a 5 percent drop over the past month.