According to the data from the Banking Regulation and Supervision Agency (BDDK), the size of insured deposits (KKM) reached 3 trillion 73 billion 905 million liras last week, with an increase of 111 billion liras. Thus, a new record was achieved in the size of insured deposits.
Furthermore, the total deposits of the banking sector increased from 12.1 trillion liras to 12.3 trillion liras last week.
The credit volume of the sector also rose from 10.1 trillion liras to 10.2 trillion liras during the week of July 21st.
Regarding non-performing loans, they increased from 169 billion 194 million liras to 170 billion 490 million liras last week.
Currency-Hedged Deposit” or “Foreign Currency-Hedged Deposit” is a type of financial product that provides protection against fluctuations in foreign exchange rates for individuals or institutions who want to invest in Turkish lira.
With a Currency-Hedged Deposit, investors convert a specific amount of Turkish lira into a foreign currency at a pre-determined exchange rate at the time of the transaction. At the end of the maturity period, they receive back the initial Turkish lira amount they deposited, regardless of how the foreign exchange rate has changed during that period. This way, investors protect their principal from adverse movements in the foreign exchange rate.
For example, if an investor makes a Currency-Hedged Deposit at an exchange rate of 1 US dollar = 10 TL, and at the end of the maturity period, the exchange rate is 1 US dollar = 9 TL, the investor will still receive the initial 10 TL. However, if the exchange rate becomes 1 US dollar = 11 TL, the investor will still receive 10 TL and will not be affected by the change in the exchange rate.
Currency-Hedged Deposits are popular among investors who want to avoid uncertainties in foreign exchange rates and protect their investments from currency risk. However, these types of products come with advantages and disadvantages, so investors should conduct thorough research and understand the risks involved.