Turkish cenbank unveils steps simplifying macroprudential framework

Credit: REUTERS/CAGLA GURDOGAN

Adds Simsek comment

ISTANBUL, Oct 27 (Reuters) - The Turkish Central Bank said on Friday it was taking fresh steps to simplify the macroprudential framework and increase the share of lira deposits, which Finance Minister Mehmet Simsek said were important for a better functioning market economy.

"The aim is to facilitate access to credit and encourage the transition to TL," Simsek said on social media platform X, formerly known as Twitter.

The move came after the bank on Thursday raised its policy rate by 500 basis points to 35% as expected, tightening aggressively for a third straight month as it steps up efforts to rein in inflation that has soared for years.

The bank said in Friday's statement that among simplification steps it was terminating the securities maintenance practice applied to banks at a rate of 30% percent based on lira-denominated cash loans they extend.

The securities maintenance practice applied at a rate of 30% on securities issued by the real sector and purchased by banks was also terminated.

It also said changes will be made to the practice of charging commissions on reserve requirements for FX deposits in order to increase the share of Turkish lira through the renewal of FX-protected accounts and their conversion to lira.

The targeted monthly rise for the share of real persons’ lira deposits was increased to 3.5% from 2.5%.

(Reporting by Nevzat Devranoglu; Editing by Daren Butler)

((daren.butler@tr.com; +90-212-350 7053; Reuters Messaging: daren.butler.thomsonreuters.com@reuters.net))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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