“Turkey Ends FX-Protected Deposit Scheme: What It Means for the Lira”

Turkey has stopped its FX-protected deposit scheme, a program that helped people protect their money from losing value when the lira fell. This scheme, which cost about $60 billion, is ending as Turkey moves away from unusual economic policies that caused a lira crisis in the past.

The Turkish Central Bank said that from August 23, 2025, new accounts under this scheme cannot be opened or renewed. But accounts already opened will stay active until they expire. The bank also updated rules about reserve requirements and commissions related to the scheme.

What Was the Scheme?

The scheme, called KKM, started in late 2021. It allowed people and businesses to deposit Turkish lira in special accounts that protected them from losing money when the lira dropped.

The lira lost a lot of value in recent years:

• 2021: 44% loss vs USD

• 2022: 29% loss

• 2023: 37% loss

• 2024: 16% loss

At its highest, the scheme held $140 billion, but now it is down to $11 billion. Officials had already planned to fully end the program by the end of 2025.

What It Means

Ending this scheme is a step toward normalizing Turkey’s economy. It may put some pressure on the lira in the short term, but it shows Turkey is moving to a more market-driven approach for the future.

By Md Golam Rabbani