"Exit from KKM Accounts" analysis from the Central Bank of the Republic of Turkey (CBRT)

The "Exit from KKM Accounts" analysis prepared by Assistant Specialist Korhan Çalışkan from the Central Bank of the Republic of Turkey (CBRT) Treasury and Corporate Operations General Directorate, Researcher Muhammed Akif Dokumacı and Assistant Specialist Oğuzhan Evli from the General Directorate of Banking and Financial Institutions, and Senior Specialist Didem Güneş was published on the Bank's blog page, "Center's Day."

The analysis stated that the Bank completed its goal of ending the KKM application in 2025 by ending the renewal and opening of KKM accounts for real persons.

The analysis, which highlighted the gradual decrease in the KKM balance over the past two years, included evaluations such as "renewal and transition targets to Turkish Lira during the KKM exit process, Turkish Lira share targets, reserve requirement (RR) ratios, interest paid to RRR accounts, and minimum interest rates applied to RRR accounts constituted the CBRT's macroprudential toolkit."

The analysis stated that the KKM balance, which exceeded USD 140 billion in mid-2023, decreased to USD 11 billion as of August 21, 2025, with the steps taken. "In this period, macroprudential regulations were calibrated by taking into account the relative cost dynamics to ensure that banks preferred Turkish lira funding instead of KKM," it said.

In the analysis, it was stated that the difference between the RR rates determined for KKM and Turkish lira deposits and the interest amount paid for the established RRs are the two most basic tools affecting the funding strategies of banks.

It was also reminded that the minimum interest rates applicable to KKM accounts have been gradually revised downwards and the withholding tax advantage applied to KKM accounts has been terminated.

The analysis stated that the attractiveness of Turkish Lira deposits was maintained with these steps taken in addition to the tight monetary policy, and included the following evaluations:

"The outflow from KKM accounts accelerated, and the shift towards foreign currency from these accounts remained limited. As of August 19, 2025, the KKM share decreased to 1.8 percent, while the share of Turkish Lira deposits increased to over 60 percent.

The fact that the balance decreases in the upcoming KKM accounts are close to the previous period's balance decreases indicated that conditions had been met for the product's termination. Furthermore, the decline in the underlying inflation trend and the attractiveness of Turkish lira deposits supported the exit from KKM. With the gradual exit process that culminated in the termination of KKM, the transmission of monetary policy to banks' Turkish lira funding costs was strengthened, and risks to the central bank's balance sheet were reduced.