FX‑Protected Deposits Shift Risk to State

Türkiye’s KKM guaranteed bank deposits against currency depreciation, effectively lifting savers’ returns while keeping borrower rates low. The scheme stabilized the lira temporarily but created large contingent fiscal liabilities and made the system vulnerable to self‑fulfilling currency and debt crises. — It shows how novel financial 'fixes' for low‑rate politics can hide sovereign risk and destabilize the monetary‑fiscal nexus, a warning for other governments facing rate‑cut pressure.