Central Bank unveils new measures on COVID-19

Central Bank unveils new measures on COVID-19

ANKARA - Anadolu Agency
Central Bank unveils new measures on COVID-19

The Central Bank of Turkey (CBRT) on March 31 introduced new measures to limit the economic fallout from the novel coronavirus pandemic.

The steps aimed to back monetary transmission mechanisms, banks' flexibility in liquidity management, uninterrupted credit flows to the corporate sector, and firms exporting goods and services.

Open Market Operations (OMO) portfolio can now be carried out in a front-loaded manner and limits may be revised depending on market conditions, the bank said.

"These operations are intended to enhance the effectiveness of the monetary transmission mechanism via increasing market depth, enabling sound asset pricing, and providing banks with flexibility in liquidity management," the bank stressed.

For a temporary period, the Central Bank said it would purchase government domestic debt securities bought by primary dealer banks from the country's unemployment insurance fund.

Primary dealer banks can also increase the liquidity facility offered under the OMO.

It added that asset-backed and mortgage-backed securities are now included in a collateral pool under Turkish lira and foreign exchange operations.

This will help boost the liquidity of similar securities issuances and deepen the capital markets, it said.

The CBRT raised limits for targeted additional liquidity facilities, deciding to hold Turkish lira currency swap auctions with a maturity of six months.

Thus, related banks will be provided with Turkish lira liquidity against U.S. dollars, euros, or gold, at an interest rate 125 basis points lower than the one-week repo rate.

Turkish lira-denominated rediscount credits for export and foreign exchange earning services will be extended to firms exporting goods and services, it said.

The coronavirus death toll in Turkey reached 168 on March 30, with 10,827 positive cases, according to the health ministry.

After first appearing in Wuhan, China, last December, the virus has spread to at least 178 countries and regions, according to data compiled by the U.S.-based Johns Hopkins University.

The number of confirmed cases worldwide has surpassed 788,000, while the death toll is above 37,800, and more than 166,700 people have recovered so far.