Turkey cenbank takes steps to address credit availability after rate cut



ANKARA, Aug 20 (Reuters) - Turkey's central bank unveiled new measures on Saturday meant to address credit availability including higher reserve requirement collateral for lenders, days after it shocked markets with a 100 basis-point interest rate cut to 13%.

It said the steps were meant to support financial stability and strengthen the monetary transmission mechanism after citing the need to address the widening gap between its policy rate and lending rates when it cut rates on Thursday.

The central bank replaced an existing 20% reserve requirement ratio for credits with a higher 30% treasury bond collateral requirement.

For commercial loans, the central bank announced 20% bond collateral through year end, which it said was 1.4 times the current reference rate of 16.32%. It said 90% bond collateral would have a rate 1.8 times the reference rate.

The bank also announced new bond collateral for the credit amounts that is 10% over that at the end of July.


Reporting by Nevzat Devranoglu and Ali Kucukgocmen; Writing by Jonathan Spicer; Editing by Leslie Adler

Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.

All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.

Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.

We are using cookies to give you the best experience on our website. Read more or change your cookie settings.

Risk Warning: Your capital is at risk. Leveraged products may not be suitable for everyone. Please consider our Risk Disclosure.