## Republic of Türkiye: Financial System Stability Assessment

_IMF Staff Country Reports, January 18, 2023_

## Source details

**Canonical URL:** [Republic of Türkiye: Financial System Stability Assessment](https://www.imf.org/en/publications/cr/issues/2023/08/17/republic-of-trkiye-financial-system-stability-assessment-538281)

## Other formats

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## Bibliographic details
- Published: January 18, 2023
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798400251528.002

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### Executive summary and key findings
- Türkiye’s bank-dominated financial sector has grown markedly and shown areas of resilience since the last Financial Sector Assessment Program (FSAP).
- Macrofinancial volatility has risen significantly.
- Foreign investors have receded from local markets.
- Demand for dollarized and state-guaranteed foreign-exchange (FX) protected Lira deposits has risen.
- A deeply negative real policy interest rate exists against the backdrop of rapidly tightening global financial conditions.
- An array of idiosyncratic measures has been deployed that attempt to offset the highly negative policy rate and achieve multiple objectives.

### Risks, vulnerabilities, and stress considerations
- Increased macrofinancial volatility and reduced foreign investor participation elevate systemic risk.
- Higher demand for dollarized and FX-protected Lira deposits implies elevated FX asset and FX liquidity risk for the financial system.
- Rapidly tightening global financial conditions compound domestic vulnerabilities.
- The report addresses meeting FX liquidity, outflow scenario, stress test result, and volatilitybased FX rule considerations included in the keywords and subject matter.

### Analytical scope and subjects covered
- Subject areas include: Commercial banks, Economic sectors, Financial institutions, Financial sector, Financial Sector Assessment Program, Financial sector policy and analysis, Financial sector stability, Foreign exchange, International organization, Monetary policy.
- Keywords explicitly listed: Commercial banks, Financial sector, Financial Sector Assessment Program, Financial sector stability, FX asset, FX intervention, FX liquidity risk, Global, meeting FX liquidity, outflow scenario, stress test result, volatilitybased FX rule.

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_Source: https://www.imf.org/en/publications/cr/issues/2023/08/17/republic-of-trkiye-financial-system-stability-assessment-538281_