Treasury and Finance Minister Nureddin Nebati used the following statements in his statement on his social media account:
“It should never be forgotten that there is a strong will and a national strategic mind behind the centuries-old works and services we have brought to our nation.
The strong economic infrastructure, which we have built step by step during our rule, and which has the power to recover quickly in the face of global and local economic shocks and to offer proactive solutions, is the result of the climate of political stability. It is this steely, fused unity that marks the century and creates the vision of Turkey.
As it is known, just as our AK Party governments under the leadership of our President, have been able to reduce the share of interest expenditures in the budget from 43.2 percent in 2002 to 10.6 percent today, without compromising on budget discipline; just as it was able to bring centuries-old works and services to our country thanks to this financial area it created; It also contributes positively to our economy with innovative instruments such as Currency Protected Deposits and Participation Accounts (KKM).
In our country, the KKM application was put into use at the end of 2021 as a result of the panic atmosphere and high volatility created in the foreign exchange markets. Thus, the panic atmosphere in the said period was eliminated, the share of foreign currency deposit accounts in total deposits was significantly reduced and a contribution to the stability of exchange rates was ensured.
In addition, maturity mismatch in the banking sector was reduced as KKM contributed to the prolongation of the average maturity of TL deposits.
“It is not within the expectations to create a serious cost on the budget in the coming period”
Today, the cost of the KKM implementation, which has reached a total of 2.3 trillion liras, continued to decrease gradually, reaching a total of 95.3 billion liras. With the removal of the upper limit of interest, it is not expected to create a serious cost on the budget in the upcoming period.
On the other hand, if the KKM application had not been implemented and the increase and fluctuation in the exchange rate had continued; this would have a negative impact on our country’s external debt stock, and the development of real markets would be seriously hampered.
Moreover, this would have coincided with a period of sharp increases in commodity prices triggered by the Russia-Ukraine War and the tightening of global financial conditions.
Under those conditions, in energy and all other imported inputs, the costs of the real sector in our country would increase much more, and in the current global financial environment, our real sector would be faced with the problem of borrowing more with high costs for the additional foreign exchange need.