Turkish banking watchdog takes new normalization step
ANKARA- Anadolu Agency
Borsa Istanbul's banking index gained 3% while the U.S. dollar/Turkish lira exchange rate fell below 7.85 from 7.96 following the move.
The banking watchdog decided to implement the AR requirement as of last April "to accelerate the flow of bank funding into the economy, thereby mitigating the adverse economic effects of the COVID-19 pandemic."
The ratio was designed to improve credit flow to small- and medium-sized enterprises and exporters, encourage financing projects and promote banks to reduce gap between their foreign exchange assets and liabilities.
"As a continuation of the normalization steps to be taken for the aforementioned Board decisions promulgated during the pandemic period where uncertainties and risks in global markets increased," the BDDK said in a statement on Nov. 24.
"The Board has decided that all the aforementioned Board resolutions regulating the AR will be repealed as of 31.12.2020," it added.