Turkish Investors Shift Savings from Money Market Funds to Lira Deposits

Turkish investors have been withdrawing their savings from money market funds during a recent redemption crisis. According to Goldman Sachs, this exodus has primarily resulted in the transfer of these savings to lira deposits.

The $1.8 billion worth of outflows recorded in the week leading up to September 11 marked the highest decline in such funds for the month. By September 15, total withdrawals from money market funds had reached $4 billion.

Lira deposits, however, have seen a significant increase, rising by $12 billion as of September 15. Goldman Sachs economists Clemens Grafe and Basak Edizgil noted that this surge in lira deposits far outpaced inflows to FX and gold deposits in the banking system on a valuation-adjusted basis.