Turkey's Central Bank vows to provide ’all liquidity’ needed by banks

Turkey's Central Bank vows to provide ’all liquidity’ needed by banks


Turkey's Central Bank has announced a series of measures to support the Turkish Lira, vowing to provide "all the liquidity" needed by banks.

"In the framework of intraday and overnight standing facilities, the Central Bank will provide all the liquidity the banks need," the bank said in a written statement.

It added: "Banks will be able to borrow foreign exchange deposits in one-month maturity in addition to one-week maturity."

If needed, the Central Bank may increase lenders' current foreign exchange deposit limits -- $50 billion -- and improve utilization conditions.

To provide banks flexibility in their collateral management, the Central Bank revised discount rates for collaterals against Turkish lira transactions, said the statement.

The bank added: "Through this regulation, the discounted value of banks’ current unencumbered collaterals is projected to increase by approximately 3.8 billion Turkish liras ($555.4 million)."

The Central Bank also raised foreign exchange deposit limits for lira transactions of lenders from €7.2 billion ($8.2 billion) to €20 billion ($22.8 billion).

The Central Bank also lowered Turkish lira reserve requirement ratios by 250 basis points for all maturity brackets, and reserve requirement ratios for non-core FX liabilities by 400 basis points for up to three-year maturities.

The move came after Turkey's Treasury and Finance Minister Berat Albayrak said that an action plan is coming into effect starting early Aug. 13 to support the Turkish Lira.

Action plan to support Turkish Lira underway, Turkey's Treasury Minister Albayrak says