ANKARA (Reuters) – Turkey’s central bank on Saturday unveiled new measures aimed at tackling credit availability problems, including raising lenders’ reserve requirements for collateral, days after it announced the 100 benchmark shocked the market – point rate cut to 13%.
It said the measures were aimed at supporting financial stability and strengthening the monetary transmission mechanism after a rate cut on Thursday needed to address the widening gap between policy rates and lending rates.
The central bank replaced the existing 32 with a higher 32% credit reserve requirement ratio % )% Treasury bond collateral requirements.
Turkish authorities, including the central bank and the BDDK banking regulator, have previously taken steps to restrict lending to companies other than net exporters as part of an economic plan to turn a huge current account deficit for surplus.
Last month, business groups complained about regulation and said manufacturing companies could not get financing at low rates.
As part of the central bank’s new measures, banks are required to maintain 10% commercial lending rates over 1.4 times the current reference rate for securities 16.30%. If the interest rate on the extended commercial loan will exceed 1.8 times the reference rate, the lender is required to maintain 90% of the bond collateral.
Timothy Ash at Blue Bay Asset Management said new rules by the central bank to lower bank lending rates have complicated the banking industry.
“(It) will increase concerns about overheating, fuel inflation and put more downward pressure on the lira,” Ash tweeted ( NYSE: TWTR).
The central bank also stated that in terms of securities, banks need to maintain loans that exceed the level of 10% loan growth rate compared to the end of the year Amount – 2022 one year.