[REVISION HISTORY]

Turkey corporate debt, FX exposure, and KKM phase-out

Updated 17 times since CLSTR started tracking revisions of this situation.

What changed

2026-09-22 12:44 UTC → 2026-09-29 10:25 UTC · added ~~removed~~

By late August 2026, Turkey’s economic distress manifested in the total evaporation of the Currency Protected Deposit (KKM) system. According to the Banking Regulation and Supervision Agency (BDDK), KKM account balances reached zero for the week ending August 21, marking the end of a system that began in December 2021. Treasury and Finance Minister Mehmet Şimşek confirmed the completion of the exit process, describing KKM as a ‘conditional liability’. Economist Mahfi Eğilmez estimated the total cost of the KKM era at least 58.9 billion dollars. While the KKM system wound down, the broader banking sector showed growth. By August 28, total deposits reached approximately 33.7 trillion lira, driven by a 0.98 percent rise in Turkish Lira-denominated deposits to 18.48 trillion lira. However, non-performing loans rose to 844.9 billion lira. Social and financial pressures remain high; a YENİ Parti TBMM Group report indicated total financial debt reached 7.449 trillion lira, with approximately 1.7 million citizens facing legal proceedings for unpaid debts in the first eight months of the year. New data from September 2026 highlights escalating debt levels. Central government debt stock reached 15.89 trillion TL as of August 31, with foreign currency debt accounting for 51 percent of the total. Additionally, the net foreign exchange position deficit for non-financial firms rose to 210.802 billion USD in July. On the external front, the Central Bank of the Republic of Türkiye (TCMB) reported that short-term external debt stock rose by 3.8 percent in July to 177.1 billion USD. When calculated by remaining maturity, the short-term external debt stock stood at 248.1 billion USD. By late September 2026, legal pressures intensified as the National Judicial Network Project (UYAP) reported approximately 26.3 million active enforcement and bankruptcy files, an increase of over 1.7 million within a single year.

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