Turkey Central Bank to provide all liquidity banks need

Banks' liquidity needs will be provided by the Central Bank of the Republic of Turkey (CBRT), the bank announced on Monday.

"In the framework of intraday and overnight standing facilities, the Central Bank will provide all the liquidity the banks need," the bank said in a written statement.

It added, "Banks will be able to borrow foreign exchange deposits in one-month maturity in addition to one-week maturity."

If needed, the Central Bank may increase lenders' current foreign exchange deposit limits – $50 billion – and improve utilisation conditions.

TRT World's Andrew Hopkins explains latest measures taken by Turkey's Central Bank.

Flexibility for collaterals

To provide banks flexibility in their collateral management, the Central Bank revised discount rates for collaterals against Turkish lira transactions, said the statement.

The bank added: "Through this regulation, the discounted value of banks’ current unencumbered collaterals is projected to increase by approximately 3.8 billion Turkish liras ($555.4 million)."

The Central Bank also raised foreign exchange deposit limits for lira transactions of lenders from $8.2 billion (€7.2 billion) to $22.8 billion (€20 billion).

The Central Bank also lowered Turkish lira reserve requirement ratios by 250 basis points for all maturity brackets, and reserve requirement ratios for non-core FX liabilities by 400 basis points for up to three-year maturities.

Meanwhile presidential spokesman Ibrahim Kalin said on Monday that the government is taking necessary steps for stability in the country urging people not to pay heed to speculations about Turkish economy.

"Turkish economy's structure is solid, nobody should trust speculative news and actions," he wrote on his official Twitter account.

Kalin added that Turkey's Treasury and Finance Ministry, the Central Bank, the Banking Regulatory and Supervision Agency, the Capital Markets Board and other institutions are taking steps for financial stability.

"Turkey will come out stronger from this process," Kalin added.