Banks' liquidity needs will be provided by the Central Bank of the Republic of Turkey (CBRT), the bank announced on Monday.

LENDERS' DEPOSIT LIMITS MAY BE INCREASED

"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. "Banks will be able to borrow foreign exchange deposits in one-month maturity in addition to one-week maturity," it added. If needed, the Central Bank may increase lenders' current foreign exchange deposit limits -- $50 billion -- and improve utilization conditions. To provide banks flexibility in their collateral management, the Central Bank revised discount rates for collaterals against Turkish lira transactions, said the statement.

TURKISH LIRA REQUIREMENT RATIOS WERE LOWERED

According to the statement, 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.