The Central Bank of the Republic of Turkey (the "Central Bank") has effected amendments to Communiqué No. 2013/15 on Mandatory Reserves. Amending Communiqué No. 2018/2 has been published in the Official Gazette dated 09 May 2018 and numbered 30416 (the "Amending Communiqué").
The Amending Communiqué lowers applicable US Dollar caps to the so-called foreign currency reserve option mechanism which allows banks to apply US Dollar reserves to satisfy reserve requirements for TRY denominated exposures.
According to the Amending Communiqué, the maximum amount of US Dollar reserves that can be applied towards TRY reserve requirements is 45% (previously, this was 55%), to be applied at the following updated coefficient rates:
|
Brackets (%) |
Coefficients |
|
0-20 |
1.0 |
|
20-25 |
1.4 |
|
25-30 |
1.7 |
|
30-35 |
2.1 |
|
35-40 |
2.5 |
|
40-45 |
2.9 |
The Amending Communiqué No. 2018/2 will take effect as from 20 April 2018, covering off the current reserve calculation period.
The Central Bank has noted in a press release that they expect the amendments will result in a withdrawal of around TRY6.4 billion in TRY liquidity and provide US dollar liquidity to banks in the amount of around USD2.2 billion.
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