CBRT and a group of companies discuss a converted lira deposit system for expatriates

Turkey’s central bank and one of the country’s main business associations, including its representatives from abroad, discussed on Friday the recently unveiled program to encourage expatriates to repatriate their savings to Turkey.

The Governor of the Central Bank of the Republic of Turkey (CBRT), Şahap Kavcıoğlu, met virtually with Mahmut Asmalı, the President of the Association of Independent Industrialists and Businessmen (MÜSIAD) and representatives of non-governmental organizations (NGOs ) in foreign countries.

The meeting was part of the CBRT meetings to introduce the “Deposit and Participation Scheme for Non-Resident Turkish Citizens” to be held in domestic banks.

The scheme, known as YUVAM for short, was announced earlier this week and is part of efforts to protect Turkish lira savings against exchange rate volatility.

It is part of a program unveiled by President Recep Tayyip Erdoğan last month to encourage foreign currency holders to convert their funds into liras and keep their savings in Turkish currency.

The initiative was unveiled after the pound fell to a record low of 18.4 against the US dollar on December 20 before climbing sharply back to just over 10 and then settling at current levels just below 14 for US currency.

Erdoğan argues that the lira deposit system, which compensates depositors for any loss due to the depreciation of the lira, is a success.

The facility has attracted around TL 290 billion ($21 billion) so far, Mehmet Ali Akben, director of the Banking Regulation and Supervision Agency (BDDK), said on Thursday.

Since the announcement, the government has extended the program to business accounts. The CBRT also said that exporters would be required to exchange 25% of their foreign currency earnings into lira.

The central bank said the latest program aims to encourage Turkish citizens living abroad to repatriate their funds to Turkey in order to establish a savings framework for them to protect the value of their savings and leverage contributions. of these savings to the country’s economic development and balance of payments. .

Expats will be able to convert their foreign currency accounts into special lira accounts with returns linked to the value of the foreign currency.

Expatriates can benefit from this incentive if they transfer foreign currency funds they hold in overseas banks to foreign currency deposit or holding accounts in dollars, euros and pounds in domestic banks and convert them into YUVAM accounts in liras.

YUVAM accounts can have terms of three, six, 12 and 24 months.

The central bank says that while protecting YUVAM account holders from exchange rate volatility, it can provide additional returns that vary by maturity.

The share of interest/profits that will be accumulated in YUVAM accounts by national banks will be compared to the sum of the change in exchange rates at the end of the term and the additional returns that the bank will pay, and the most amount will be paid to the holder of the deposit or participating account.

In case of withdrawing money from the account before the due date, the account holder will not be eligible for the incentive.

Sabah’s daily newsletter

Keep up to date with what is happening in Turkey, in its region and in the world.

You can unsubscribe anytime. By signing up, you agree to our Terms of Service and Privacy Policy. This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

About Louis Miller

Check Also

INSIGHT-Middle East’s fertile crescent dries up as rains fail

* Photo report: https://reut.rs/3E0FE2x By Amina Ismail and Maha El Dahan DIWANIYA, Iraq, Nov 14 …