The Central Bank of the Republic of Turkey (CBRT) decreased Turkish lira reserve requirement ratios by 50 basis points for all maturity brackets in a bid to provide additional liquidity to markets yesterday.
In a statement the bank said: "Turkish lira reserve requirement ratios have been decreased by 50 basis points for all maturity brackets." The reserve options mechanism, coefficients for the second, third and fourth tranches of the FX facility and for the first three tranches of the gold facility have been increased by 0.1 points. The bank estimated that approximately TL 1.2 billion ($408 million) and $670 million of liquidity would be provided to the financial system with the changes.
FinansInvest's chief economist Burak Kanlı evaluated the CBRT's decision on reserve requirements as positive for the banking sector and as progress that could contribute to the reduction of loan interest rates. Kanlı indicated that the CBRT has continued to take steps to reduce credit costs and that in this context it has reduced the reserve requirements ratios for all maturity brackets.
"In the upcoming period, I think the CBRT will follow the credit market and could go to additional reductions in reserve requirements if necessary," he said.
As for economist Gizem Öztok, she evaluated the CBRT's reduction in required reserve ratios by 50 basis points for all maturity brackets as a supportive move for banks and markets in terms of deposits.
Capital FX's research expert Enver Erkan said: "After the banks, one after another, went for interest rate cuts, the CBRT is also making arrangements that will pave the way for a decrease in credit costs and further reduce the loan interest rates."
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