Turkish central bank delays FX deposits fee for banks

The Turkish central bank delayed implementation of a fee for U.S. dollar and euro accounts at banks that cannot encourage customers to turn to lira.

Last month, the central bank said a 1.5% commission will be imposed on foreign currency required reserves accounts of banks if they did not reach certain thresholds on conversion to lira. The move was seen as a punishment for banks whose customers choose to keep savings in foreign currencies.

The banks should hit a 10% foreign currency account to lira account conversion rate by April 15 to avoid the fee, according to a document sent to banks seen by Reuters. The banks also should hit a 20% conversion rate by July 8 to be exempt from the fee until end-2022, it showed.

More than half of locals’ savings is in foreign currencies and gold, according to central bank data, due to a loss of confidence in the lira after years of depreciation. The lira fell more than 40% against hard currencies last year alone.

The currency had slumped to a record low of 18.40 in to the dollar in December before the government and central bank announced steps to protect lira deposits from foreign exchange depreciation.