According to the decree published in the Official Gazette, Turkish companies will be able to open lira accounts that protect against the depreciation of the currency. The measure was first introduced for individuals only in December, with the aim of ending spot foreign exchange demand. If the fall of TRY against foreign currency exceeds the bank interest rates, losses incurred by TRY depositors will be compensated. According to this;
· The maturity of the accounts will be at least 6 months for institutions.
· Foreign currency deposit accounts of resident real persons on 20/12/2021 and legal entities on 31/12/2021 in US Dollars, Euros and British Pounds, and foreign currency participation fund accounts are converted into Turkish Lira at the exchange rate.
In the conversion from gold accounts;
· The gold account balances of domestic real persons on 28/12/2021 and of domestic legal entities on 31/12/2021 and the gold account balances to be opened after this date are converted to processed and scrap gold upon request by the account holder.
· A Turkish Lira deposit or participation account is opened with a maturity of 3 months, 6 months or 1 year for resident real persons and 6 months or 1 year for domestic legal entities.
When we look at the BRSA figures, it is seen that corporate accounts in FX over a 6-month maturity period are quite minimal and correspond to 2% of the total legal person FX accounts. In terms of TRY deposits, it is seen that there is a 5% share in total legal person deposits with maturities of 6 months or more. Therefore, we do not calculate that there will be any positive or negative impact on the total foreign exchange supply and demand, even if there is demand from such accounts. Therefore, we expect institutional demand to have a low share in total demand.
We observe that the regulation, which does not come to companies in the first place and covers only real persons, has been expanded in this context. In terms of currency protection, a demand towards the new product can be expected in deposits held against loans. Apart from this, the foreign exchange positions of the companies are very significantly related to the import demand and foreign exchange debts. Here, more position closing, adjustment and balancing transactions can occur. Companies can also make hedge transactions in order to protect their open foreign exchange positions. Of course, in order to manage their own cash flows in a natural way, they obtain the necessary amount of foreign currency for debt payment or to meet their imports. In other words, there is no position to talk about a speculative demand from an institutional point of view. On the individual side, the demand for foreign exchange is mostly realized for the purpose of protection from exchange rate and inflation. Therefore, it would not be correct to interpret the speculative exchange rate movements in the last period on the basis of institutional demand. Although the effect on the individual side is mostly in the form of direct exchange-protected TRY account opening, we observe that FX-TRY conversions remain limited. We do not expect the current corporate account arrangement to have a determinant effect on the total foreign exchange demand due to the low share of FX deposits held on the short-term side and maturities longer than 6 months.
Kaynak Tera Yatırım-Enver Erkan
Hibya Haber Ajansı