Since the start of June, the Turkish central bank has imposed a slew of new rules on the banking system in an effort to tighten interest rates and shore up the lira. This expanding regulatory horizon has the potential to stimulate new, long-term challenges for some lenders at a time when the macroeconomic environment is deteriorating quickly.
On June 10, the Central Bank of the Republic of Türkiye announced plans to double the reserve requirement ratio for lira-denominated commercial cash loans from 10% to 20%, following the imposition of the initial 10% requirement in April. This move was accompanied by a rule to increase the weight of Turkish lira fixed-rate securities in the central bank’s collateral pool, in exchange for maintaining foreign currency deposits, to be enforced from June 24.
