© Reuters. Turkish Central Bank Changes Reserve Levels to Encourage Lending

(Bloomberg) — The Turkish central bank changed its reserve rules to boost credit growth amid signs of a deepening slowdown in the Middle East’s largest economy.

The lira reserve-requirement ratios have been reduced by 100 basis points for deposits and participation funds with maturities of up to a year and for other liabilities with maturities up to and including three years, and by 50 basis points for all other liabilities, the central bank said in a statement on Saturday. Banks will also now be able to hold 10 percent of their reserve requirements in gold, rather than 5 percent.

The changes came two days after Governor Murat Cetinkaya told state media he was considering adjustments to the lira’s liquidity. He lowered the reserve-requirement ratios for lira and foreign-exchange deposits last year when the currency was in free fall. This reduction is targeting credit growth rather than currency stability.

The Turkish economy is on track to cap 2018 with two consecutive quarters of contraction, a technical recession, in a sign the lira’s crash and the ensuing jump in borrowing costs were very damaging. The economy may shrink for three quarters in a row through June this year, according to forecasts compiled by Bloomberg. Turkey’s fourth-quarter gross-domestic product report will be released on March 11.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Source link