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Turkish fund outflows largely shifted into bank deposits, BofA says
Bank deposits rose by about 950 billion liras from Sept. 1 to Sept. 29, with much of the increase tied to corporate money moving into lira and FX accounts.
BofA Securities said much of the money leaving Turkish funds during September’s selloff moved into bank deposits instead, according to a research note cited by LiveMint Markets.
September outflows across Turkey’s electronic fund platform Tefas totaled about 743 billion liras, and BofA estimated that bank deposits increased by around 950 billion liras between Sept. 1 and Sept. 29, with 884 billion liras of that increase coming from corporates.
BofA said 63% of the corporate deposit increase was in liras and 37% in FX, describing the mix as broadly consistent with recent dollarization trends. It also noted that a potential dollarization spike appeared contained in the following month, even as the fund crisis raised concerns about pressure on currency stability tied to Turkey’s inflation fight.