✔ Budget payments are a problem at KKM, but the real problem is something else… What will the saver, who is used to the return of foreign currency, do after the KKM application is completed?
✔ Your guess is correct, the majority will attack the currency.
✔ It will not be possible to end the KKM application suddenly or disaster awaits.
Our eyes were wide open when 37.2 billion lira was taken from the budget as exchange rate difference in the first four months of the implementation of the currency-protected deposits. This is perfectly normal; 37.2 billion little money! Especially since the payment of 16 billion in June constitutes half of the monthly budget deficit…
As the exchange rate increases, payments made to these account holders from the budget will continue to increase. We are therefore talking about a payment for an indefinite period.
“We expect to pay this amount for KKM in 2022” You can’t even tell. Since you have pegged the account holder’s TL deposit to the foreign currency and the more the foreign currency rises, you will pay the difference with interest. Since you are unable to determine the exchange rate…
Currency protected deposit, “As long as the citizen does not demand foreign currency, does not run to buy foreign currency, does not create demand; I will count the currency as received and pay the return” An application invented with the logic of…
The error started by knowing the error from the beginning; 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.
But the end will surely come
Extend the current end of 2022 as much as you want, and that end will inevitably come.
Then the real hell will break out.
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 FX protected deposit account stands at the 1 trillion TL 66 billion level 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.
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.
As of July 8, some of those who had deposited 1 trillion 66 billion lira already had foreign currency accounts, while some of them had deposits in TL and the government “Take advantage of the rise in the exchange rate” Although it has ostensibly remained in TL deposits, it has in fact moved into foreign currencies.
We always say, liraization If we express it on the basis of the concept of currency-protected deposit, liraization, in dollarsgood dollarization It was an app that made him even stronger.
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.
See what happens when the time is up!
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.
Let’s imagine that we come to the end of the year with a balance of 1.8 trillion lire and no extension of time has been made…
The weighted maturity in KKM accounts is three months. Therefore, a significant portion of the 1.8 trillion account, possibly 1.5 trillion, will expire in March 2023.
A 1.5 trillion lire like a wandering mine!
Some, say, half of that money is basically foreign currency. In other words, around 750 billion lira for a while. “Currency resembling TRY” as he had stopped.
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, the owners of the other 750 billion who were accustomed to foreign currencies and the return of foreign currencies while actually standing in TL. “This application has ended, I will reopen a TL deposit account” does he say? Isn’t it hard…
They will probably go in foreign currency.
Let’s say that a third of them did not receive any foreign currency…
March 2023… As I said, 1.5 trillion liras are due like a loose mine. Let’s say that a third of this account has not faced foreign currencies; He stayed in TL and went into deposits, housing, stocks or gold…
There are 1,000 billion lire left.
Can you imagine that 1 trillion lira is in the foreign currency market…
Can you imagine how 1 trillion lira will shake up the market…
The biggest disaster is not how much is now paid from the budget to 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.
If the yield can be kept low, the problem will be alleviated.
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 according to the current trend, remains at the current level, for example, this means that this problem will be relatively mitigated.
So how will this be achieved?
It’s easy in theory, but not at all in practice.
Why does the saver prefer KKM? Isn’t it because the yield of the foreign currency is high… If the foreign currency does not gain much in value and the KKM loses its attractiveness, new inflows are prevented and outflows from the system accelerate as the deadline expires, although the practice continues.
It’s very simple on paper, but how do you prevent currency overvaluation? That’s what you can’t do! Didn’t we bring in the KKM because we couldn’t control foreign currency through normal means?
But an inextricable problem is created by the enlargement of the KKM.
Let us warn you once again. KKM is not such a problem. Instead of increasing the balance, try to reduce it by doing anything.
#real #apocalypse #KKM #app #finished