Turkey said it’s raising the amount of foreign exchange lenders must hold at the central bank, a move that’s expected to increase the nation’s reserves by around $9.2 billion.
The monetary authority said the so-called foreign exchange reserve requirement ratios have been raised by 300 basis points for all foreign-currency deposits regardless of their maturities.
The change will force commercial banks to park more of their foreign currency deposits at the monetary authority, swelling its reserves. The central bank said Saturday’s move is part of a policy of normalization after it provided additional hard currency to financial markets in March to mitigate the adverse impact of the Covid-19 pandemic.
The level of central bank reserves has been a cause of concern for some Turkey analysts since last year, when authorities began borrowing foreign currency from commercial lenders through swap agreements.
Even so, the nation’s gross reserves fell from more than $105 billion at the beginning of the year to just over $90 billion as of last week, according to the latest official data. Turkey’s state-owned lenders have in the meantime sold dollars to support the lira, which has lost about 13% of its value this year.
By Onur Ant
Source: Bloomberg
