05/04 Turkey’s central bank raises reserve requirement ratio over soaringoil prices

English.news.cn 2011-03-24 00:08:00

ANKARA, March 23 (Xinhua) — Turkey’s central bank on Wednesday raised the ratio of Turkish lira-denominated deposits lenders have to set aside by two to five percentage points to curb inflation risks brought by soaring oil and commodity prices.

The decision will be valid as of April 1 and will absorb almost 19.1 billion Turkish lira (12.2 billion U.S. dollars) of liquidity from markets, the bank said in a statement.

It said it increased the reserve requirement ratio (RRR) for demand deposits, notice deposits and private current accounts to 15 percent from 12 percent.

The RRR for up to six-month deposits, participation accounts and special fund pools rose to nine percent from seven percent and that for liabilities other than deposits or participation funds climbed to 13 percent from nine percent, among hikes for several kinds of accounts.

The decision will “provide the monetary tightening required for containing the potential second round effects of the recent increases in oil and other commodity prices,” the bank said.

Meanwhile, the bank kept the one-week repo rate, the policy rate, unchanged at 6.25 percent, the overnight borrowing rate at 1. 5 percent and lending rate at nine percent.

Economic activity continued to strengthen amid increasing domestic demand, while external demand remained relatively weak despite the recent pick up, the bank said, noting that employment conditions continued to improve though unemployment rates remain at high levels.

After a 4.7 percent slump in 2009, Turkey’s economy spearheaded with an 11.8 percent growth in the first quarter of last year and 10.2 percent in the second quarter. It expanded 5.5 percent year-on-year in the third quarter.

Editor: yan


About Uy Do

Banking System Analyst, former NTT data Global Marketing Dept Senior Analyst, Banking System Risk Specialist, HR Specialist
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