Monday, July 25, 2011

Turkish Central Bank Cuts Required Reserves

The Central Bank of the Republic of Turkey dropped the required reserve ratio on 1-year foreign exchange deposits -100bps to 10% from 11%, and for deposits of up to 3-years -150bps to 10% from 11.5%, and for foreign exchange deposits longer than 3 years -200bps to 9% from 11%.  The moves come into effect from the 5th of August; the bank said the move would add liquidity of approximately 590 million to the market.  The Bank also suspended daily foreign exchange buying auctions of $30 million.

The Turkish central bank held its benchmark interest rate unchanged recently during its July meeting this year.  Turkey reported annual consumer price inflation of 6.2% in June, off from 7.2% in May, but up from 4.26% in April, and 3.99% in March, and above the Bank's full year inflation target of 5.5%.  On inflation the Bank said: "Although core inflation is likely display some upward movement over the short term, the increase is expected to be limited due to the slowdown in economic activity".


Post a Comment