Ministry of Treasury and Finance revealed the details of the ‘Foreign Currency Protected TRY Deposit Account’ as part of the new economic regulation announced by President Recep Tayyip Erdogan after the cabinet meeting yesterday.
Accordingly, a new product was put into use so that citizens who use their savings as TRY deposits do not suffer from the volatility in the exchange rates. The name of the account changed to ‘Foreign Currency Protected TRY Deposit Account’ from its initial name as ‘FX-indexed TRY deposit.’
Only real people will be able to open this account. The interest rate of the account can be at least as much as the policy rate of the Central Bank (CBRT). The interest income obtained at maturity will be compared with the exchange rate change throughout the maturity period. Whichever is higher, it will be applied and the money will be given. In addition, if the exchange rate change remains above the interest rate at the end of the maturity, the difference that may occur will be reflected in the customer’s account in TRY. No withholding tax will be deducted from the income in this product.
Individuals will be able to open an account with a maturity of three, six, nine and 12 months. If the account is broken before the maturity date, this right will be forfeited and the account will turn into a current account. The account balance will be updated at the CBRT rate on the date the account was opened and the CBRT rate on the date the account was closed.
Which rate will be applied?
The rates announced by the CBRT will be used during the conversion of foreign currency to TRY and for exchange rate calculations. The Central Bank will announce the special USD foreign exchange buying rate for this deposit every day at 11:00 AM.
Any bank can join the system. However, a method for participation banks has not been developed yet. A study was also carried out for participation banks, according to the made by the ministry.
