NEWS Finance        17/04/2020

Turkish Central Bank introduces further measures to combat impacts of coronavirus

The Turkish Central Bank has introduced additional measures to increase liquidity in the markets against the economic and financial impacts of the coronavirus pandemic. The Bank’s press release issued on April 17th outlining its new measures is as follows:


“Press Release on Additional Measures Taken against the Economic and Financial Impacts of Coronavirus


In its press release dated 31 March 2020 on additional measures taken against the economic and financial impacts of the coronavirus outbreak, the Central Bank of the Republic of Turkey (CBRT) announced that the outright purchase operations under the Open Market Operations (OMO) portfolio, which are conducted within the limits identified in the Monetary and Exchange Rate Policy for 2020 text, could be carried out in a front-loaded manner and that these limits might be revised depending on market conditions. Moreover, the Bank also noted that purchases, made as part of the facility offered temporarily to Primary Dealer banks to sell the Government Domestic Debt Securities (GDDS) they had bought from the Unemployment Insurance Fund to the CBRT under the terms and limits set by the CBRT, would be considered outside the limits set for the OMO portfolio. Accordingly, to maintain market depth, strengthen the monetary policy transmission mechanism and support the Primary Dealership system, the CBRT has taken the following additional measures:


1.. The maximum limit for the ratio of the OMO portfolio nominal size to the CBRT analytical balance sheet total assets, set at 5% for 2020 in the Monetary and Exchange Rate Policy for 2020 text, has been revised to 10%.


2.. To further support the Primary Dealership system considering its contributions to the deepening of financial markets and to the effectiveness of the monetary policy transmission mechanism, the facility offered to Primary Dealer    (PD) banks to sell GDDS to the CBRT has been revised. Accordingly the CBRT has decided that;

a.. The limits offered to PD banks for outright sales of GDDS to the CBRT will be applied independent of the repo transaction limits and that PD banks will be offered a GDDS selling limit that is equal to the repo transaction limits,

b.. The related purchases will also be carried out within the total maximum limit of 10% set for the OMO portfolio,

c.. The GDDS to be purchased and the amount of purchases will be determined by the CBRT, and

d.. Purchases will be conducted via the quantity auction method.

Turkey’s net minimum wage has been raised 50.52% to TL 4,253.40 (USD 319) as of 01.01.2022       Migration communication helpline 157 available for foreigners in Turkey       Read our homepage articles on developments in the Turkish economy       Turkey’s official annual inflation rate rises further to 69.97% in April 2022       Turkey’s official unemployment rate jumps to 11.5% in March 2022       Read our BUSINESS section for latest sectoral and corporate news       Turkey’s population is 84,680,273 as of 2021 yearend       Foreigners visiting Turkey in 2021 increase by 94.1% to 24.7 million       Turkey’s private sector foreign debt is USD 169.4 billion as of 2021 yearend       Turkey’s economy grew 11% in 2021       Foreign Direct Investment to Turkey in 2021 was USD 14 billion       Turkey’s current account records a deficit of USD 14 billion in 2021