Central Bank announces measures to support lira

ANKARA

The Central Bank has announced new measures to “strengthen the monetary transmission mechanism and support transition to the Turkish lira,” within the macroprudential framework.

Accordingly, the growth targets for real-person liras deposit shares have been increased for banks with a share below 60 percent, while a monthly growth target of 0.4 points has been introduced for banks with a share between 60 percent and 65 percent.

The reserve requirement ratio for FX-protected deposit (KKM) accounts has been raised from 33 percent to 40 percent.

The minimum interest rate applicable to KKM accounts has been reduced from 50 percent to 40 percent of the policy rate.

The target for the transition of KKM accounts to lira has been abolished, while the total target for KKM renewals and transition to lira has been maintained.

Floating-rate lira deposit accounts can now be opened with maturities longer than one month, the bank said.

Furthermore, the bank has set the reserve requirement ratios for CPI, PPI and TLREF-indexed deposits at 10 percent for all maturities.

Finally, the ratio for lira-denominated required reserves that should be maintained for FX deposits has been reduced from 4 percent to 2.5 percent.