It is stated that if the burden of the foreign exchange protected deposit, which has been put in place to control the rising exchange rates, increases for the citizens and the treasury, the real problem will appear when the implementation is completed. It is stated that when the implementation is completed, those who join the KKM will attack foreign currencies, it is claimed that disaster awaits Turkey. Experts made the definition of “There is a situation like being a prisoner of drugs” for the stage reached.
Protected currency deposits put a burden of 555 lira on the pocket of every citizen in Turkey. Over the past four months, 37.2 billion lira has been deducted from the budget as an exchange difference. June’s record payments amounted to 16 billion lira. As the exchange rate increases, payments made to these account holders from the budget will continue to increase. It is therefore a payment for an indefinite period.
Alaattin Aktaş, the writer of Dünya newspaper, who has written notable articles on the KKM, said that the day will come when the practice will end. Expressing in today’s article that when the KKM application ends, savers accustomed to the return of foreign currencies will attack the foreign currency, Aktaş said, “It will not be possible to terminate the KKM application. suddenly or disaster awaits. .”
“THE STEP TO ACCOMPLISHMENT IS LIKE BEING A DRUG POWDER”
In his article, Aktaş drew attention to the following: currency-protected deposits, “as long as citizens do not demand foreign currency, do not rush to buy foreign currency, do not create demand; an application that was invented with the logic of ‘I get the change and pay the return’… It was launched knowing from the start that it was wrong; Right now, there is such a thing as being a prisoner of drugs. See to start once; You can’t give up all at once.
However, it is not possible to abandon this practice now. When the end of this year, which is the end of the application, comes, it will not be possible to give up so easily. And no doubt, the implementation period, which is at the end of 2022, will be extended. Extend the current end of 2022 as much as you want, and that end will inevitably come. Then the real hell will break out.
“PAYMENT OF 10 BILLION LIRE EVERY MONTH”
Billions of lire from the budget; For example, the payment of 37.2 billion lira in the first four months of implementation and the continuation of these payments, which are estimated at around 8 to 10 billion lira each month, are of course important, but we will face the real disaster when the implementation is complete.
According to BRSA data, the currency-protected deposit account was at the level of 1 trillion 66 billion liras as of July 8. We do not know what part of this amount consists of accounts opened directly in TL and what part of accounts opened with DTH conversion. This detail was originally leaked, now the data is hidden. Likewise, it is not clear which part of this amount belongs to real persons and which part belongs to legal persons. There is no information on the expiry of the account.
“AS LIRALING SAID, THEY DID ITS ESSENTIAL REVERSE”
But the distribution of the balance on that day is not that important in terms of what will happen at the end of the application period. Some of those who deposited 1 trillion 66 billion liras as of July 8 already had accounts in foreign currency, while some of them had deposits in TL, but with the guarantee of the government to “benefit from the increase in the rate de change”, although they are ostensibly in TL deposits, they have in fact switched to foreign currencies. Suppose half of the 1 trillion KKM 66 billion was created by TL accounts, and the other half by DTH conversion. Those who transferred from a foreign currency account to the KKM were already in foreign currency. Those who saved in TL were also used to foreign currencies with this practice and adapted. Therefore, when they talked about liraization, they basically did the opposite.
“1,500,000,000,000 BILLION READ LIKE A POWERFUL MINE! »
Foreign currency protected deposits are growing by approximately 10% every month. If the rate were at this level every month, the KKM would reach around 1.8 trillion by the end of the year. Suppose we have reached the end of the year with a balance of 1,800 billion lira and no extension has been made… The weighted maturity of KKM accounts is three months. Therefore, a significant portion of the 1.8 trillion account, possibly 1.5 trillion, will expire in March 2023.
Some, say, half of that money is basically foreign currency. In other words, around 750 billion lira remained for some time as a “TL-like foreign currency”. What do you think the owners of those 750 billion will do when their term expires and they get that much TL? Your guess is correct! Of course, they will rush to get foreign currency.
On the other hand, do the owners of the other 750 billion, who are used to foreign currency and the return of foreign currency by standing in TL, say, “This practice is over, now I will open an account of deposit in TL Isn’t it difficult… Probably they also go in foreign currency…. March 2023… As I said 1.5 trillion lira expires like a lost mine. ‘a third of this account has no foreign currency, it stayed in TL and went to deposits, housing, stocks or gold.. .
There are 1,000 billion lire left.
“CATASTROPHE CAN BE AVOIDED BY LIMITING THE BALANCE”
Can you imagine that 1 trillion lira is in the foreign currency market… Can you imagine how 1 trillion lira will upset the market… The biggest disaster is not the amount of money paid from the budget for currency protection. Now we are only shaken, the budget balances are deteriorating; We will know the real disaster when this application is finished. Therefore, the trade-protected deposit request will never be terminated suddenly and, I don’t know how, it will somehow be terminated over time.
Preventing or mitigating the disaster that will occur at the end of the KKM application can be achieved by no longer increasing the KKM balance, or even starting the system exits. If the balance, which I estimate at 1,800 billion for the end of the year, remains at the current level, for example, that would mean that this problem will be relatively mitigated.
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