The Central Bank of the Republic of Turkey (CBRT) will vigorously use all its policy tools to ensure the efficient functioning of financial markets throughout the coronavirus outbreak, Gov. Murat Uysal said Thursday.
Uysal also said the central bank was closely monitoring the impact of the outbreak on the Turkish and global economies, the central bank said on Twitter.
The governor’s statements come in line with the measures by the government and banks who have rolled out multiple measures to support citizens and businesses to cushion the economic fallout from the pandemic.
President Recep Tayyip Erdoğan last week announced a TL 100 billion (around $15.4 billion) relief package that 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 Banking Regulation and Supervision Agency (BDDK) Thursday said it has decided to provide flexibility for banks’ liquidity ratio requirements until Dec. 31 due to the outbreak.
The banks, which will be temporarily exempt from fulfilling specific liquidity ratio requirements, will continue to report their liquidity coverage ratio and liquidity adequacy ratio to the watchdog, it said in a statement.
The central bank earlier this week also said it was opening a 90-day repo auction with a volume of TL 15 billion and an interest rate of 8.25%, 150 basis points below its policy rate. The repo was in addition to its regular one-week repo with a rate of 9.75%, which on Tuesday had a volume of TL 14 billion.
As part of its efforts to keep the economy on track, the bank cut its key interest rate by 100 basis points earlier this month 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%.
Under the package announced by the president, debt repayments of companies affected by the coronavirus were postponed for a minimum of three months, while value-added taxes (VAT) and social security payments for various sectors were also deferred.
The VAT for domestic aviation was cut to 1% from 18% and the limit of the treasury-backed credit guarantee fund, which guarantees loans to small and medium-sized businesses, would be doubled to TL 50 billion.
Separately, the country’s public and private lenders earlier this week announced support packages for their customers to soften the impact of the outbreak. They have offered some flexible loan payment options for customers and corporate debt restructuring, especially for the badly hit tourism and transportation sectors.
Turkey has confirmed a total of 75 fatalities from the coronavirus, while the tally of infections was reported as 3,629 by Health Minister Fahrettin Koca late Thursday.
To contain the virus, Ankara has taken a series of measures to contain the virus, including limiting the use of public spaces and imposing a curfew on the elderly, as well as closing schools, cafes and bars, banning mass prayers and suspending sports matches and flights.
Erdoğan said Wednesday that Turkey, which has a population of about 83 million, would overcome the coronavirus outbreak in two to three weeks.