Turkish central bank revises regulations on reserve requirements

The Turkish central bank has revised regulations on banks’ reserve requirements, applying them to the asset side of balance sheets in order to strengthen its macroprudential policy toolkit, it said on Saturday.

Reserve requirements, which have until now been applied to the liability side of balance sheets, will thus be applied to asset sides as well.

The move was “in line with its main objective of price stability and in the scope of efforts toward supporting financial stability and encouraging liraization,” the bank said in a statement.

It said banks’ and financing companies’ lira-denominated commercial cash loans will be subject to reserve requirements, excluding small- and medium-sized company loans, tradesperson loans, export and investment loans and agricultural loans.

Commercial loans extended in four-week periods from April 1, 2022, will be subject to a reserve requirement of 10% of those loans during the four-week maintenance periods, the bank said.

For banks with a loan growth rate above 20% by May 31, 2022, compared to Dec. 31, 2021, the difference between their outstanding loan balances on March 31, 2022, and Dec. 31, 2021, will be subject to reserve requirements of 20% of the difference, for a period of six months.

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