The Central Bank of the Republic of Turkey (CBRT) announced new decisions concerning the simplification process within its monetary policy framework. In a statement published on the CBRT website, it was reported that changes were made to reserve requirement practices in order to strengthen macrofinancial stability and enhance the effectiveness of the monetary transmission mechanism.
ADDITIONAL LIRA RESERVE REQUIREMENT ABOLISHED The Central Bank abolished the practice of maintaining an additional lira reserve requirement for foreign currency-denominated deposits and participation funds, which was introduced in 2023 and had been applied at a rate of 2.5 percent. This brought an end to the additional lira reserve requirement banks held for foreign currency deposits.
RESERVE REQUIREMENT RATIOS FOR FOREIGN CURRENCY DEPOSITS INCREASED Meanwhile, the CBRT increased the reserve requirement ratios applied to foreign currency deposits and participation funds. According to the new regulation, the reserve requirement ratio for demand and up to 1-month maturity foreign currency deposits/participation funds was raised from 30 percent to 32 percent.
For foreign currency deposits/participation funds with maturities longer than 1 month, the ratio was increased from 26 percent to 28 percent. NEW RATIOS TO TAKE EFFECT ON JULY 17 The Central Bank announced that the first maintenance transaction under the increased reserve requirement ratios will be carried out on July 17.