Turkish cenbank to use required reserves to support real sector access to loans -governor
By Ali Kucukgocmen and Jonathan Spicer
ISTANBUL, Nov 27 (Reuters) - The Turkish Central Bank will use required reserves to support real sector access to loans and loan growth, the bank's governor Murat Uysal said on Wednesday, adding that its monetary policy will allow the fall in inflation to continue.
Under a legal change made this year, the central bank has the authority to link required reserves with loan growth. Banks are encouraged to provide loans by a reference range of 10-20%, with banks unable to meet this range being at a disadvantage.
Speaking at an event in Istanbul, Uysal said the bank will continue supporting the real sector's access to loans with macroprudential steps, including required reserve regulations.
"In the period ahead... we will continue to use macroprudential tools such as required reserves effectively to support the real sector on the issue of financial risk management and access to loans," Uysal said.
Uysal added that the central bank was using its tools for price stability and paid attention to the impact of the external balance on macrofinancial stability.
"In this scope, we are adopting a policy frame that also uses macroprudential tools such as required reserves effectively directed at the pace of increase of loans, their composition and their healthy growth in terms of sectoral distribution," he said.
While the bank's monetary policy would ensure a continued fall in inflation "we will use effectively the macroprudential tools geared towards financial stability such as the required reserves," Uysal said.
His comments came a day after President Tayyip Erdogan urged the bank to keep slashing interest rates, saying both rates and inflation would hopefully hit single digits next year, in remarks that could again raise questions over the bank's independence.
Uysal also said the bank will support policy with structural steps to make improvements in the current account permanent, and that he expects to see lower energy imports this year.
(Additional reporting by Ebru Tuncay; Writing by Daren Butler and Tuvan Gumrukcu; Editing by Dominic Evans)