The primary objective of the Bank is to achieve and maintain price stability.
 
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Reserve Requirement Ratios

Reserve Requirement Ratios
 

Traditionally, the reserve requirement ratios are important monetary policy instruments for central banks. In line with the new strategy that took effect in the last quarter of 2010, the CBRT developed a new policy framework towards reducing macro financial risks within the limits of favorable inflation outlook. Accordingly, in addition to the traditional policy instrument of the one-week repo auctions rate, reserve requirements were introduced as an active tool.

The liabilities subject to reserve requirements are calculated on Friday every two weeks and comprised of the following balance sheet items by taking into account the accounting standards and record – keeping of banks and financing companies, including the liabilities of foreign branches and excluding obligations to Central Bank, the Treasury, domestic banks and headquarters and branches of banks established by the international agreements in Turkey.

a) Deposits / participation funds.
b) Funds from repo transactions.
c) Loans obtained (except the loans guaranteed by the Treasury)
d) Securities issued (net).
e) Subordinated debt that are not taken into account in the calculation of own funds.
f) Liabilities to the head office abroad (net).
g) Debt to contracted merchants due to credit card transactions.
h) Borrower funds of investment banks.

 

Reserve requirement ratios of these liabilities are as follows:

Reserve Requirement Ratios (%)
Turkish lira
Deposits and Participation Funds (Excluding deposits/participation funds obtained from banks abroad) Ratios
- Demand, notice, up to (and including) 1 and 3- month  10,5
- Up to (and including) 6-month maturity  7,5
- Up to 1-year maturity  5,5
- 1-year and longer maturity  4
Borrower funds of investment banks 10,5
Other Liabilities (Including deposits/participation funds obtained from banks abroad) Ratios
- Up to 1-year maturity (including 1-year)  10,5
- Up to 3-year maturity (including 3-year) 7
- Longer than 3-year maturity 4
 
Foreign Currencies
Deposits and Participation Funds (Excluding deposits/participation funds obtained from banks abroad) Ratios
- Demand, notice, up to (and including) 1 – 3 - 6 months maturities and up to 1-year maturity 12
- 1-year and longer than 1-year maturity  8
Borrower funds of investment banks 12
Other Liabilities (Including deposits/participation funds obtained from banks abroad)(**) Current Ratios For Stock Liab. (*) New Ratios For Flow Liab.(*)
- Up to (and including) 1-year maturity  19 24
- Up to (and including) 2-year maturity  13 19
- Up to (and including) 3-year maturity  7 14
- Up to (and including) 5-year maturity 6 6
- Longer than 5-year maturity 5 4

(*) New reserve requirement ratios will be applied to the liabilities after 28 August 2015, as of the maintenance period dated 23 October 2015. The current ratios will continue to be applied to stock of liabilities on 28 August 2015 until the end of their original maturities. 

(**) Deposits/participation funds obtained from banks abroad will be subject to the new ratios for flow liabilities.  

However, banks having the leverage ratios below the ratios specified in the Communiqué on the Required Reserves are subject to additional reserve requirement ratios as stated in the Communiqué.

The maintenance of required reserves begins on the next Friday after two weeks following the date of the liability calculation and lasts for 14 days. Basically, required reserves are maintained in terms of Turkish lira for Turkish lira liabilities, while they are needed to be hold in US dollar for the foreign currency liabilities denominated in US dollar, and in US dollar or euro for the remaining foreign currency liabilities.

Additionally, up to 60% of required reserves for Turkish lira liabilities can be kept hold in US dollars, up to 30% can be hold in standard gold and up to 5% wrought or scrap gold collected by banks from residents at blocked accounts at CBRT calculated by multiplying each buckets given in the table below with the corresponding coefficients for each. Meanwhile, within the required reserves for foreign currencies, up to the full amount of required reserves for precious metal accounts can be hold in the form of standard gold in blocked accounts.

FX Facility Ratios (%) Coefficents
0-30 1.0
30-35 1.4
35-40 1.7
40-45 2.1
45-50 2.5
50-55 2.9
55-56 3.7
56-57 3.9
57-58 4.1
58-59 4.3
59-60 4.5

 

Gold Facility Ratios (%) Coefficents
0-15 1.6
15-20 1.7
20-25 2.1
25-30 2.5

 

Wrought or Scrap Gold Facility Ratio (%) Coefficents
0-5 1.0

 

The remuneration on reserve requirements may be implemented in accordance with the rules and principles set by CBRT.  CBRT remunerates Turkish lira required reserves based on the ratio of the sum of deposit and equity to loan calculated for banks and financing companies, and US dollar denominated required reserves, reserve options and free reserves are remunerated by the same interest applied to notice foreign currency deposit accounts. Renumeration for US dollar denominated required reserves  is calculated in terms of Turkish lira  by utilizing the interest rate set by CBRT on a daily basis and indicative foreign currency buying rate declared at the relevant time.

 


 
CENTRAL BANK OF THE REPUBLIC OF TURKEY Head Office Anafartalar Mah. İstiklal Cad. No:10 06050 Ulus Altındağ Ankara
Phone : (+90 312) 507 50 00 | Fax : (+90 312) 507 5640