The Turkish central financial institution introduced on Saturday new measures to “strengthen the monetary transmission mechanism and support the transition to the Turkish lira,” inside its macroprudential framework.
The Central Bank of the Republic of Türkiye (CBRT) mentioned that the expansion targets for real-person liras deposit shares have been elevated for banks with a share under 60%, whereas a month-to-month progress goal of 0.4 factors has been launched for banks with a share between 60% and 65%.
It additionally mentioned that the reserve requirement ratio for FX-protected deposit accounts or so-called KKM has been lifted to 40% from 33%.
Likewise, the minimal rate of interest relevant to KKM accounts has been lowered from 50% to 40% of the coverage price.
At the identical time, the goal for the transition of KKM accounts to Turkish lira has been abolished, it mentioned, whereas the whole goal for KKM renewals and transition to lira has been maintained.
The KKM scheme, which aimed to defend depositors towards lira depreciation, was adopted in late 2021, however authorities, as a broader shift in ecomomic coverage have been searching for to section it out progressively and transition deposits into common lira accounts.
Floating-rate lira deposit accounts can now be opened with maturities longer than one month, the financial institution additionally mentioned.
Furthermore, the CBRT has additionally set the reserve requirement ratios for CPI, PPI and TLREF-indexed deposits at 10% for all maturities.
Lastly, the financial institution mentioned the ratio for lira-denominated required reserves that needs to be maintained for FX deposits has been decreased from 4% to 2.5%.
On Thursday, the central financial institution stored its key coverage price unchanged at 46%, citing that inflation expectations and pricing conduct “continue to pose risks to the disinflation process.”
It nonetheless mentioned that the underlying development of inflation declined in May and that main indicators counsel that this decline continues in June.
Source: www.dailysabah.com