NEWS Finance        12/10/2020

Turkish Central Bank raises interest rate on TL reserve requirement

The Turkish Central Bank has increased the interest rate by 200 basis points for all banks, taking a further backdoor tightening step rolling back measures it had adopted to ease the coronavirus fallout. The Bank said that lenders that meet real loan growth requirements will have a 9% remuneration rate on lira required reserves, while the rate for others will be 2%. The new rates will be effective as of October 16th.


The Bank has also halved the commission rate on required reserves for forex deposits and participation funds. The rate now stands at 0.0125% for dollars and 0.00125% for other currencies.


The Bank said that the above moves will improve financial stability and the monetary transmission mechanism, as well as decreasing the banking system's transaction costs.


The Bank has recently taken liquidity steps to normalize policy since coronavirus restrictions were lifted were mostly lifted in June. The Bank's mostly backdoor steps have raised the average cost of funding to 11.64% as of Friday October 9th. . The policy interest rate was raised to 10.25% last month.

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