ANKARA (Pakistan Point News / Sputnik - 13th August, 2018) The Turkish Central Bank on Monday introduced measures designed to support the depreciating national Currency, lira, and promised to provide Turkey's banks with all the liquidity they needed amid the increased tensions between Ankara and Washington.
On Friday, US President Donald Trump announced that the United States would double the tariffs on aluminum and steel imported from Turkey with the taxes reaching 20 and 50 percent, respectively. Following Trump's decision, the Turkish lira fell to its record low against the US Dollar on Sunday night plunging to 7.13 for the US dollar.
"The Central Bank will provide all the liquidity the banks need ... Collateral FX [foreign exchange] deposit limits for Turkish lira transactions of banks have been raised to 20 billion Euros [almost $23 billion] from 7,2 billion euros [over $8 billion]," the Central Bank said in a statement.
According to the statement, the Central Bank may increase the banks' limits for foreign exchange deposits, which currently stand at $50 billion, while banks will also be allowed to borrow foreign exchange deposits not only with a one-week maturity but with a one-month maturity as well. The Central Bank also said that traditional repurchase agreements might be held for up to 91 days.
"Discount rates for collaterals against Turkish lira transactions will be revised based on type and maturity, thus providing banks with flexibility in their collateral management. Through this regulation, the discounted value of banks current unencumbered collaterals is projected to increase by approximately 3,8 billion Turkish liras [almost $556 billion]," the bank added.
The Central Bank also said that it would continue to monitor the market and would take all measures that it might deem necessary to keep financial stability.
