Turkey's Central Bank vows to provide ’all liquidity’ needed by banks
Turkey's CentralBank has announced a series of measures to support the TurkishLira, vowing to provide "all the liquidity" needed by banks.
"In the framework of intraday and overnight standing facilities, the CentralBank 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 CentralBank may increase lenders' current foreign exchange deposit limits -- $50 billion -- and improve utilization conditions.
To provide banks flexibility in their collateral management, the CentralBank 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 CentralBank 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 CentralBank 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 TurkishLira.