The Central Bank of Turkey (CBRT) on Tuesday introduced new measures and provided more stimulus for the financial sector and economy, saying it would ramp up government debt buying and offer new pools of cheap funding to stem the fallout from the growing coronavirus outbreak.

The steps aim to back monetary transmission mechanisms, increase banks' flexibility in liquidity management and allow for uninterrupted credit flows to the corporate sector and firms exporting goods and services.

As coronavirus cases have surged in Turkey, the government has so far offered TL 100 billion ($15.2 billion) in fiscal support, and the central bank has already cut its key interest rate by 100 basis points, loosened reserve requirements and offered cheap lira liquidity.

In recent days, the central bank’s governor and a deputy have stressed publicly that they can act quickly and strongly to further backstop financial markets and the economy.

Under the latest emergency measures, primary dealers will for a temporary period sell the central bank debt they purchased from the Unemployment Insurance Fund.

The central bank also extended TL 60 billion worth of rediscounted credits and added more lending options well below its 9.75% policy rate. It said the moves would provide much-needed credit to companies and liquidity to government debt markets.

The bank said other outright asset purchases "can be carried out in a front-loaded manner, and these limits may be revised depending on the market conditions."

The actions aimed to "enhance the effectiveness of the monetary transmission mechanism via increasing the market depth, enabling sound asset pricing and providing banks with flexibility," it said.

The bank also said it would hold swap auctions with six-month maturities for the lira against dollars, euros or gold at an interest rate of 125 basis points lower than the policy rate.

For FX operations, lenders can now use mortgage- and asset-backed securities as collateral, the bank said.

Kunjal Gala, co-portfolio manager at Federated Hermes, said the moves were in line with those of other countries aiming to support their economies going into a global recession.

"That’s how you prevent the public health issue becoming a credit issue. If it becomes a full-blown credit crisis then that is a different world we are in, and that is what central banks are trying to prevent," Gala told Reuters.

Despite the outbreak, the CBRT expects a strong growth rate in the first quarter thanks to a strong January and February, its deputy governor said on Sunday, stressing that there were no noticeable signs of weakening consumption, apart from travel spending.

"Due to the strong trend in January-February, we are expecting a strong growth rate in the first quarter as a whole. Apart from travel spending, we have not seen noticeable signs of weakening consumption yet," Oğuzhan Özbaş told Anadolu Agency (AA), adding that the Turkish economy remained resilient.

On the other hand, Governor Murat Uysal said the measures taken would limit the pandemic's impact. Depending on the data and news flow, the bank "will use all its policy instruments strongly...for the efficient functioning of the financial markets and transfer mechanism," he added on Twitter last week.

As part of its efforts to keep the economy on track, the bank cut its key interest rate by 100 basis points earlier in March at an earlier-than-scheduled policy meeting and took steps to support volatile financial markets. The bank cut its benchmark one-week repo rate to 9.75% from 10.75%.

President Recep Tayyip Erdoğan on Monday stressed Turkey must carry on producing and "keep the wheels turning" through the pandemic to support exports and sustain the supply of basic goods.

Ankara has taken strict measures to limit social contact to prevent the spread of the virus.

The country has placed some 41 residential areas under quarantine to contain the spread of the virus. It has halted all international flights, limited domestic travel, closed schools, bars and cafes and suspended mass prayers and sports matches to counter the outbreak.

On March 18, the country announced the TL 100 billion economic support package to help ailing sectors. It slashed taxes for hard-hit sectors and unlocked funding for workers, while the central bank has flooded the financial sector with cheap lira liquidity.

The country’s lenders have also stepped up, announcing loan packages for their customers that include some flexible payment options and corporate debt restructuring, especially for the badly hit tourism and transportation sectors.

The number of people diagnosed with COVID-19 in Turkey as of Monday increased to 10,827, while the death toll reached 168, Health Minister Fahrettin Koca announced.

After first appearing in Wuhan, China, last December, the virus has spread to at least 178 countries and regions, according to data compiled by U.S.-based Johns Hopkins University. The number of confirmed cases worldwide has surpassed 800,000 as of Tuesday, while the death toll exceeded 38,700, and over 170,000 people have so far recovered.

"With the pace of the outbreak slowing, we will see the Turkish economy recover rapidly. With its dynamic structure, the Turkish economy will be one of those that emerge from this period more quickly and with relatively less damage," Özbaş had said.