Türkiye's central bank on Wednesday simplified its reserve requirement framework by abolishing the additional lira reserve requirement previously applied to foreign currency deposits/participation funds.

The Central Bank of the Republic of Türkiye (CBRT) also said it was raising reserve ratios for foreign currency liabilities.

In a statement, the bank said the move sought to "strengthen macrofinancial stability and support the monetary transmission mechanism."

Under the decision, the requirement introduced in 2023 obliging banks to hold additional Turkish lira-denominated reserve requirements against foreign currency deposits and participation funds has been terminated. The additional reserve ratio had most recently been set at 2.5%.

At the same time, the CBRT increased reserve requirement ratios for foreign currency deposits.

It said the reserve requirement ratios applied to foreign currency deposits/participation funds had been revised to 32% from 30% for demand deposits and deposits with maturities up to one month, and to 28% from 26% for those with longer maturities.