Fund withdrawals largely flow into deposits: Karahan

ANKARA

Most of the money withdrawn recently from money market and similar funds has moved into bank deposits, Central Bank Governor Fatih Karahan told lawmakers on Oct. 6.

Speaking to parliament’s Plan and Budget Commission, Karahan said retail investors were continuing to sell foreign currency and precious metals.

Increased demand for short-term bonds had also pushed yields at shorter maturities lower.

Developments in domestic and international financial markets had led to a limited increase in Türkiye’s credit risk premium and exchange rate volatility, he said.

Karahan reiterated the bank’s commitment to bringing down inflation, while warning that geopolitical uncertainty continued to affect progress.

“We will continue to use all our tools decisively in pursuit of price stability,” he said.

Growth slowed in the second quarter as domestic demand weakened, but supply shocks limited the improvement in headline inflation, Karahan said. The bank would remain cautious to preserve the gains made in reducing inflation.

Türkiye’s strong trade ties with the region affected by the Middle East war had also weighed on foreign trade, he added, warning that the conflict’s wider effects could further worsen the global inflation outlook.

Separately, Vice President Cevdet Yılmaz is expected to brief parliament’s General Assembly on the fund investigation on Oct. 7.

Özlem Zengin, deputy parliamentary group leader of the ruling Justice and Development Party (AKP), announced the planned briefing during discussions in the chamber.

Zengin said anyone who violated the law or misappropriated citizens’ money would be held accountable, regardless of their political views, position or connections.