Turkish Central Bank revises reserve requirement regulation

Turkish Central Bank revises reserve requirement regulation

ANKARA
Turkish Central Bank revises reserve requirement regulation

The Turkish Central Bank revised its reserve requirements regulation on April 23 in a move to strengthen the macroprudential policy toolkit.

Reserve requirements, which used to only be applied to the liability side of balance sheets, will now be applied to asset sides as well, the bank said in a statement.

Turkish Lira-denominated commercial cash loans given by lenders and financing companies will be subject to reserve requirements, the bank said, adding that some loans would be excluded from the measure.

“Commercial loans, which have been extended in four-week periods since April 1, shall be subject to a reserve requirement of 10 percent of the said loans during the maintenance periods of four weeks,” it explained.

For banks with a loan growth rate above 20 percent by May 31, 2022 compared to end-2021, the difference between their outstanding loan balances on a given date will be subject to reserve requirements of 20 percent of this difference, for a period of six months, it added.

Reserve requirement ratios of financing companies, which were 0 percent, have now been set at the same level as banks, and their liabilities to domestic banks have been included in the scope of reserve requirements.

Governor Şahap Kavcıoğlu will hold a briefing on the second inflation report for this year on April 28.

Turkey, Ankara, economy,