In order to improve its macroprudential policy arsenal, the Turkish Central Bank announced on Saturday that it had changed regulations on bank reserve requirements and applied them to the asset side of balance sheets.
Until now, reserve requirements were only applied to the liability side of the balance sheet.
The bank stated in a statement that the move was ‘in keeping with its core objective of price stability and in the scope of efforts to promote financial stability and encourage liraization.’
It stated that lira-denominated commercial cash loans made by banks and financing organisations will be subject to reserve requirements, excluding loans to small and medium-sized businesses, tradesmen, export and investment loans, and agricultural loans.
From April 1, 2022, commercial loans extended in four-week increments will be subject to a reserve requirement of 10 percent of those loans during the four-week maintenance periods, according to the bank.
The difference between their outstanding loan balances on March 31, 2022 and December 31, 2021 will be subject to reserve requirements of 20 percent of the difference, for a period of 6 months, for banks with a loan growth rate above 20% by May 31, 2022 compared to December 31, 2021.
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