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As a result of the tightening measures, loan rates have been rising since the beginning of August, but deposit rates are still well below official inflation.
8.1.2 Deposits
Turkish banks on August 24 stopped charging fees on physical FX withdrawals reasoning that “the practice has hurt confidence in the health of the financial system”, Haberturk reported.
Turkish banks started charging the fees on foreign exchange cash withdrawals on August 13, nine days after the central bank permitted such commissions. The banks said their physical FX costs had risen due to shrinking tourism receipts and less border trade amid the coronavirus (COVID-19) crisis.
For those familiar with the Turkish economy administration’s ‘trial and error’ approach to policymaking, the fact that the FX withdrawal fees lasted less than two weeks was no big surprise.
Resident real persons’ FX deposits declined by $2bn to $134bn as of August 14 from a record high of $136bn as of August 7.
Data is sensitive to changes in the EUR/USD and gold (XAU)/USD rate pairs, but the move to scrap the fees may suggest that a good deal of Turks withdrew their FX from banks after the introduction of the commission.
39 TURKEY Country Report September 2020 www.intellinews.com
