Turkey's central bank says most fund withdrawals are shifting into bank deposits

Central Bank Governor Fatih Karahan informed the parliamentary Plan and Budget Commission that the bulk of recent withdrawals from money-market and similar funds have been redirected into bank deposits. He observed that retail investors are still offloading foreign currency and precious metals, while heightened appetite for short-term bonds has pushed yields on those securities lower. Developments in both domestic and international financial markets have caused only a limited rise in Turkey's credit risk premium and exchange-rate volatility.

Karahan reiterated the bank's resolve to bring inflation down, acknowledging that slower second-quarter growth and supply shocks have constrained further improvement in headline inflation. He cautioned that geopolitical uncertainty, especially Turkey's trade links with regions affected by the Middle East war, could exacerbate global inflation pressures. Additionally, Vice President Cevdet Yılmaz is set to brief parliament on a fund investigation, and AKP deputy group leader Özlem Zengin promised accountability for any misuse of citizens' money.