In the process that started with the simplification of the monetary policy of the Central Bank, in a way to strengthen the perception of the new period in the economy, we see that the decisions that will support the “normalization” perception are taken one by one. The previous day, the BRSA eliminated the asset ratio applied for banks as of the end of the year, while the CBRT contributed to the process in terms of eliminating the conditions linked to loans with the required reserve move.
Required reserve is the money that banks must keep in Central Bank accounts in local currency and FX. The Central Bank pays a certain amount of interest to these required reserves, and this is known as remuneration. In the previous period, when credit growth was encouraged, the Central Bank diversified interest rates on required reserves and conditioned the interest payments on “real loan growth”. Banks that met the requirement for real loan growth were able to receive more interest payments by holding less RR. There was also a disadvantageous position for banks that did not meet the requirement for credit growth.
TRY required reserve ratio was increased from 4% to 6% for demand, 1-month and 3-month time deposits. The foreign currency required reserve ratio was increased from 17% to 19% in demand and deposit accounts up to 1 year. Different interest payments situation has been eliminated, the rates will be applied the same to all banks in the sector. Most importantly, the interests paid to RRs will no longer be dependent on the condition of “real credit growth”. Banks’ hands were relieved in terms of balance sheet management with the abolition of regulations that forced them to lend more. In addition, by increasing RR rates, banks that previously held less RR will keep more TRY and FX in Central Bank accounts.
Economy decision makers are carrying out a new normalization step almost every day and meeting the expectations of the market. We expect the complete removal of banks’ foreign derivative transaction limits to take place at the next stage.
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Hibya Haber Ajansı