Turkish central bank lowers lira reserve requirement rate to zero

The interest rate on reserve requirements denominated in Turkish lira has been lowered to zero by Turkey’s central bank, reports said on Monday.

The Central Bank of the Republic of Turkey (CBRT) has ended the practice of making additional interest payments on sums converted from foreign currency to lira by real people, local media and Reuters reported.

The central bank also changed the commission system, which it had previously announced to apply a 1.5% rate to foreign currency accounts for those who could not convert foreign currency deposits into lira.

The changes were announced in a central bank letter sent to banks on Friday and seen by Reuters, with the changes taking effect on April 15.

The latest measures come after a series of measures in recent months to support the lira after a fall in the currency at the end of 2021 left it 44% weaker for the year as a whole.

Before the last modification, interest rates ranging between 8.5% and 14% were applied to increase the lira share of the reserve requirement.

The central bank also postponed from July 8 to September 2 the date by which natural and legal persons should meet a conversion rate target of 20% for sums converted from foreign currencies into liras.

Forex commission rates, which were set at zero at the end of 2020, were raised by the bank to 1.5% for those who could not meet the 10% and 20% forex to lira conversion rates on a certain date. .

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