CBRT changes reserve requirement ratios

The Central Bank of the Republic of Turkey changed the reserve requirement ratios in order to support the transition to Turkish lira deposits.

The Central Bank of the Republic of Turkey’s (CBRT) Communiqué Amending the Communiqué on Reserve Requirements was published in the Official Gazette.

Accordingly, the CBRT decided to make changes in the reserve requirement implementation that will increase the functionality of market mechanisms, strengthen macro financial stability and support monetary transmission through quantitative tightening.

Reduced from 30 percent to 25 percent

In this context, it was decided to reduce the reserve requirement ratios for exchange rate hedged accounts from 30 percent to 25 percent for maturities up to 6 months, and to increase the additional reserve requirement ratio for foreign currency deposits/participation funds (excluding deposits/participation funds in banks abroad and precious metal deposit accounts) in TL from 4 percent to 8 percent for all maturities.

CBRT

“With these arrangements, the steps towards the transition to Turkish lira deposits are strengthened, while the quantitative tightening process continues,” the CBRT said in a statement on its website.

The steps regarding the simplification process and quantitative tightening will continue in line with the principles announced by the Monetary Policy Committee.

In the Monetary Policy Committee’s decision dated January 25, 2024, it was stated that the monetary transmission mechanism would be supported by macroprudential decisions despite the volatility that may be observed in the credit supply and deposit rates in line with the ongoing simplification process, and that quantitative tightening would continue by increasing the diversity of sterilization tools.

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