Economic policymakers aim to continue implementing policies aimed at reducing the attractiveness of foreign-currency deposits, while increasing the share of Turkish lira and extending their maturities during the new Medium-Term Program (MTP) period.
Turkish officials unveiled on Sunday the new economic program covering the 2027-2029 period, seeking to curb inflation and ensure sustainable growth, while also supporting manufacturing, local agricultural development and boosting high-tech exports.
At the same time, the officials aim to maintain the attractiveness of the Turkish lira.
According to the MTP, Turkish-lira-denominated investment instruments will be encouraged, policies aligned with monetary policy regarding credit growth will be maintained and financing conditions for investment- and export-oriented activities will be improved, a report by Anadolu Agency (AA) indicated on Tuesday.
In 2026, when international financial markets experienced periods of excessive volatility due to global uncertainty and geopolitical risks, the Central Bank of the Republic of Türkiye (CBRT) encouraged a shift toward the Turkish lira through macroprudential policy measures used as a tool supporting the disinflation process and monetary policy, while ensuring that credit growth remained at levels consistent with inflation.
Within this framework, in January, the growth limit on FX loans was tightened, while a growth limit was also introduced for the limits on consumer overdraft accounts (KMH).
In March, the scope of loans exempted from the reserve requirement framework based on credit growth was narrowed. Moreover, at the end of May, growth limits were reduced for consumer loans and vehicle loans extended to individuals, KMH limits, and Turkish-lira commercial loans.
As a result of the reduction in the growth limit for FX loans, the annualized increase in FX commercial loans, adjusted for exchange-rate effects, declined to 11.2% as of Aug. 28.
In addition, in January, reserve requirement ratios were increased for funds obtained through Turkish-lira-denominated repo transactions with nonresidents and for loans obtained from abroad.
Macroprudential regulations also helped balance household indebtedness, while growth in individual credit cards and KMH slowed.
Accordingly, Turkish lira deposits became more prominent among household assets, while the rapid increase in precious metal prices led to a higher share of precious metal accounts within FX deposits.
At the same time, the banking sector's nonperforming loan ratio rose from 2.2% to 2.9% as of July 2026 compared with the same period of the previous year, but it continued to remain below its historical average. The increase was driven by higher outstanding balances on loans to small and medium-sized enterprises (SMEs), consumer loans, and individual credit cards.
The banking sector's stable profitability structure continued to be the most important factor supporting capital adequacy, while temporary flexibilities used in calculating the Capital Adequacy Ratio (CAR) were phased out as of 2026.
As part of the exit strategy from the KKM scheme, the opening and renewal of accounts for individuals were terminated as of Aug. 23, 2025. Following the decision, the balance of KKM accounts held by individuals, which stood at $9.6 billion, was completely eliminated by August 2026.
Within this framework, as the KKM balance – which had reached a 26.2% share of total deposits in August 2023 – was phased out, the share of Turkish lira deposits in total deposits increased to 61.5% as of Aug. 28, 2026.
On Sunday, Vice President Cevdet Yılmaz also pointed to the increase in Turkish lira deposits.
"Within the framework of the policies we have implemented, confidence in the Turkish lira has continued to increase," he suggested.
"The rise in the share of TL deposits in total deposits from 31.6% to 61.5% as of Aug. 28 has been a concrete indication that the policies we have been pursuing are right," he noted.