Gokhan Ergocun
February 24, 2021•Update: February 24, 2021
ISTANBUL
Turkey's Central Bank on Wednesday revised its regulations on reserve requirements to improve the effectiveness of the monetary transmission mechanism in the country.
The bank increased Turkish lira reserve requirement ratios by 200 basis points -- for all liability types and maturity brackets.
It noted: "The upper limit of the facility for holding FX [foreign exchange] has been decreased from 30% to 20% of Turkish lira reserve requirements.
"The upper limit of the facility for holding standard gold has been decreased from 20% to 15% of Turkish lira reserve requirements."
So the bank expects that Turkish-lira-denominated required reserves will increase by approximately 25 billion Turkish liras, while FX and gold will be down by $500 million.
"In addition, the remuneration rate applied to TL-denominated required reserves has been increased by 150 basis points to 13.5%," it said, adding: "These changes will be effective from the calculation date of 19 February 2021 with the maintenance period starting on 5 March 2021."
