The Central Bank of the Republic of Turkey (CBRT) announced Saturday that it had raised the required reserve ratios on foreign exchange deposits, which would increase the bank's reserves by approximately $9.2 billion (TL 63.1 billion).

The central bank statement said that it had decided to increase foreign exchange reserve requirement ratios by 300 points in all liability types and maturity brackets for all banks as part of the normalization process. In mid-March, the CBRT reduced ratios by 500 basis points to contain the economic and financial impacts of the coronavirus pandemic.

The ratio on foreign exchange deposits of up to a year was raised to 22%, while those on deposits longer than a year were raised to 18% for banks that did not meet credit growth targets.

For banks that do meet the credit growth target, the ratio for deposits of up to a year was raised to 15%, while that for deposits longer than a year was raised to 11%.

"As a result of this decision, approximately $9.2 billion of FX and gold liquidity is expected to be withdrawn from the market," the statement said.

CBRT announced last month that its official reserves totaled $90.9 billion as of the end of May. Total reserve assets soared 5.3% this May, versus $86.3 billion in April with foreign currency reserves – in convertible foreign currencies – totaled some $52.8 billion, up 5.4% on a monthly basis. The bank's official reserves fell slightly 1.3% year-on-year, down from $95.6 billion at the end of May 2019.

In May, Turkey secured a tripling of its currency-swap agreement with Qatar to $15 billion, providing much-needed foreign funding to reinforce reserves. Turkey also has a roughly $1.7 billion swap facility with Beijing.