Turkish Central Bank
Banks' liquidity needs will be provided by the Central Bank of the Republic of Turkey (CBRT), the bank announced on Monday.
"In the framework of intraday and overnight standing facilities, the Central Bank will provide all the liquidity the banks need," the bank said in a written statement.
It added: "Banks will be able to borrow foreign exchange deposits in one-month maturity in addition to one-week maturity."
If needed, the Central Bank may increase lenders' current foreign exchange deposit limits -- $50 billion -- and improve utilization conditions.
Turkey’s treasury and finance minister early Monday vowed to fight “lies” that deposit money would be seized or that foreign currencies in bank accounts would be converted into Turkish liras, saying that no such steps will be taken."Deposit money will not be seized. Foreign currencies in bank accounts will not be converted into Turkish liras. However, those lies will be fought off until the end in the judicial sphere," Berat Albayrak tweeted.Albayrak said an action plan is coming into effect starting early Monday."Our institutions will take the necessary steps to relax the markets," he said.Albayrak said they prepared the plan together with banks for the real sector, the sector the most affected by recent currency fluctuations."We will take the necessary steps rapidly, together with our banks and the Banking Regulation and Supervision Agency," he added.Russia says will cut holdings of US securities amid sanctionsIran slams Trump's tariffs decision targeting TurkeyTurks sprint to support national currency after Erdoğan call
No deposits will be seized: Turkish FinMin
To provide banks flexibility in their collateral management, the Central Bank revised discount rates for collaterals against Turkish lira transactions, said the statement.
The bank added: "Through this regulation, the discounted value of banks’ current unencumbered collaterals is projected to increase by approximately 3.8 billion Turkish liras ($555.4 million)."
The Central Bank also raised foreign exchange deposit limits for lira transactions of lenders from €7.2 billion ($8.2 billion) to €20 billion ($22.8 billion).
The Central Bank also lowered Turkish lira reserve requirement ratios by 250 basis points for all maturity brackets, and reserve requirement ratios for non-core FX liabilities by 400 basis points for up to three-year maturities.
Russia will increase using ruble and other currencies like euro, rather than the U.S. dollar for trade, the country’s finance minister said on Sunday.In an interview to Rossiya 1 TV, Anton Siluanov described the US dollar a “risky tool” for payments in international trade.“We have significantly reduced our investment in the U.S. assets,” Russia Today reported Siluanov as saying. “In fact, the dollar, which is considered to be the international currency -- becomes a risky tool for payments,” he said.The statement came after Washington announced its plans to impose sanctions on Moscow over alleged poisoning of a Russian agent and his daughter on UK soil.Russia's Lavrov to discuss planned four-way Syria summit in AnkaraSergei and Yulia Skripal were poisoned by a nerve agent in March in the southern English city of Salisbury.The British government has blamed the incident on Russia, linking the nerve agent to a series of Russia-developed chemical weapons collectively known as Novichok.The Kremlin has rejected the allegations.The Skripals have since recovered from the alleged assassination attempt.
Russia to increase use of local currencies for trade
The bank also announced that it will continue its intermediation in the foreign exchange deposit market.
"Accordingly, through the intermediation of the Central Bank, banks will be able to borrow from and lend to each other at the FX deposit market as per the rules set by the Implementation Instructions on the Foreign Exchange and Banknotes Markets," it added.
It said: "Banks will continue to purchase foreign bank notes from the Central Bank via foreign exchange transactions within their pre-determined limits at the Foreign Exchange and Banknotes Markets."
The bank also said that it raised the maximum average maintenance facility for foreign exchange liabilities to 8 percent.
"With this revision, approximately 10 billion Turkish liras ($1.46 billion), $6 billion, and $3 billion equivalent of gold liquidity will be provided to the financial system," it added.
Market depth and price formations will be monitored by the Central Bank closely, which will take all necessary measures to protect financial stability, if needed, said the bank.