Central Bank announces additional steps to support the Turkish Lira

According to the announcement made by the TCMB regarding the macroprudential framework, the Central Bank has made changes to the reserve requirement practice to support the monetary transmission mechanism.

Accordingly, the monthly increase target for banks with a retail Turkish Lira deposit share between 45 percent and 50 percent has been raised to 0.8 percentage points.

For banks with a retail Turkish Lira deposit share exceeding 60 percent, the monthly increase target has been removed, and a condition to remain above 60 percent has been introduced.

Corporate FX-protected deposit accounts (KKM) have been included in the total target calculation for the transition to and renewal of Turkish Lira deposits.

The upper limit for the interest rate applied to the reserve requirement amount that must be maintained for Turkish Lira deposits, based on the transition rate to the Turkish Lira, has been raised to 84 percent of the policy interest rate.

The blocked maintenance ratio for Turkish Lira reserve requirements has also been increased by 5 percentage points.

Emphasizing in its monetary policy texts that "additional steps may be taken to support Turkish Lira deposits," it is stated that the TCMB may take new steps in this direction if deemed necessary.