World’s Costliest ‘Economics Experiment’ Blamed for Turkish Loss

The Turkish central bank had a loss of 818.2 billion liras ($25 billion) in 2023, a reversal from years of profits driven by sharply higher interest rates and the cost of a government-backed savings program designed to shield depositors against currency depreciation.

The result, which compares with a 72 billion-lira profit in 2022, means the central bank will have to waive a transfer to the nation’s Treasury at a time when the budget is in a deep deficit. But the staggering loss also keeps the focus on the mechanism — known locally as KKM — designed to act as a backstop for the lira, which authorities introduced in late 2021 and have struggled to unwind.