Yuvam

Yuvam is a fx linked structured deposit proposed to non-res individuals with bank account in Turkiye. There is no tax levied by Turkiye. Here is the Lira evolution in various references currencies:

The 40% annualized log depreciation translates into a 10% depreciation per quarter on average. The devaluations occur abruptly every six month to a year. This means that the capital protection every 3 month is valuable, as the lira has little chance to maintain its value over a year, but it may avoid a devaluation in a 3-month interval.

When there is a devaluation, the Yuvam account only pays 3% in the strong currency. This 3% minimum is lower in USD, GBP or EUR at the moment, as the risk-free rates are higher, but this rate is better than collateralized borrowing rates available in CHF.

In half of the quarterly periods, the devaluation is worse than -11% and the account grows by only 3% annualized due to the central bank performance floor, in the other period, a rate of 40% in Lira provides a strong tailwind to the return. The return is volatile, but the expected return based on past devaluations is around 15% annualized. This could be further improved if the Lira does not depreciate as much in the coming year. It will be as little as 3% in CHF if the Lira devaluates regularly more than 10% every quarter.

For smoother return, it is best to open 3 yuvam account separateed each by one month.

Here is the payoff and the probability density of TRY appreciation outcome over 3 month:

Here are the USD, EUR, CHF, and GBP total returns: