The measures were taken to support financial stability and to sustain the effective functioning of markets, as the country will start implementing an economic action plan following the tumbling lira. The currency has lost more than 40 percent against the dollar so far this year, largely due to worries about President Erdogan's influence over the economy, his repeated calls for lower interest rates in the face of high inflation and worsening ties with the US.
Press Release on Reserve Requirements:
To support effective functioning of financial markets and flexibility of the banks in their liquidity management;
Turkish lira reserve requirement ratios have been reduced by 250 basis points for all maturity brackets.
Reserve requirement ratios for non-core FX liabilities have been reduced by 400 basis points for up to 3-year maturities.
The maximum average maintenance facility for FX liabilities has been raised to 8 percent.
In addition to US dollars, euro can be used for the maintenance against Turkish lira reserves under the reserve options mechanism.
With this revision, approximately 10 billion TL, 6 billion US dollars, and 3 billion US dollars equivalent of gold liquidity will be provided to the financial system.