The Central Bank of the Republic of Türkiye (CBRT) has granted some exemptions in loans for the reconstruction of the country’s southeastern region struck by devastating earthquakes last month, according to a document sent to banks.
The central bank has tweaked bank bonds and pre-requisite reserve holding regulations to encourage loans to the earthquake-hit zone, according to the document accessed by Reuters.
The magnitude 7.7 and 7.6 quakes on Feb. 6 flattened a swathe of the southeast, leaving more than 200,000 buildings either completely collapsed or damaged to the point where they require immediate demolition.
The disaster killed over 45,000 people and left more than 2 million people homeless.
The central bank said loans extended to certain individuals or companies until the end of August will be exempt from the banks' obligation to hold bonds or reserves depending on loan types or the loan growth rate, as per the document.
It showed that loans extended to individuals and companies located in the earthquake-impacted area, or to those who could prove that they were engaged in active business and were hit by the quake, will be included within the scope of these regulations.
Loans extended to firms involved in infrastructure or substructure reconstruction in the quake-hit area will also be exempt from banks bonds, and require reserve holding regulations.
Last week, Türkiye’s central bank lowered its policy rate by 50 basis points to 8.5% to support growth after the earthquake, saying the cheaper borrowing cost would bolster recovery efforts.
