Turkish central bank says revision to add some $4.2 bln to required reserves

Turkey’s central bank said on Thursday its latest revision to reserve requirement ratios would lead to an increase of Turkish lira and forex-denominated required reserves by 13.2 billion lira ($1.52 billion) and $2.7 billion, respectively.

The central bank said it had raised the reserve requirement ratios on some forex liabilities to improve the effectiveness of the monetary transmission mechanism, as part of its price stability objective.

It also took steps to increase the share of Turkish lira in total deposits in the banking system, saying forex deposits available as of June 25 and converted to Turkish lira will be exempt from reserve requirement liabilities.

The central bank said it would increase the remuneration rate for lira required reserves depending on the ratio of forex deposits to total deposits, as well as the ratio of lira deposits converted from forex to the total amount of forex deposits on June 25.

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