Turkey took the first step away from a tool introduced to arrest currency depreciation, as the central bank set a target for banks to reduce their share of such deposits.
Lenders whose clients do not convert a certain ratio of their FX-linked deposits to regular lira deposit accounts will have to purchase additional government bonds, according to a decree published in the official gazette on Sunday. Deposits in these FX-linked accounts are guaranteed a return equal to the rate of the lira’s weakening, or a pre-set regular interest in case the currency remains steady.
Introduced to arrest a rapid currency depreciation in the final month of 2021, they now total at about 3.4 trillion liras , more than 28% of all deposits. In a statement, the central bank said it aims to decrease FX-linked deposits, thus “contributing to the strengthening of macrofinancial stability.” It pledged to continue rolling out similar steps.
Meanwhile, a rule that imposed higher ratios for lenders whose lira deposits were lower than a set rate has been removed. Turkish President Recep Tayyip Erdogan pivoted from his unorthodox views on inflation and interest rates after winning a crucial election in May, appointing former Merrill Lynch strategist Mehmet Simsek as finance minister and Hafize Gaye Erkan, a former First Republic Bank co-head, as central bank governor. The central bank in June raised interest rates for the first time in over two years.
Canada Latest News, Canada Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Nomura’s ‘Damocles’ Model Warns of Turkey and Czech Currency CrisesTurkey, the Czech Republic, Sri Lanka and Romania are at risk of currency crises over the next 12 months, according to a Nomura Holdings Inc. gauge that has predicted past selloffs.
Read more »
De Grasse aims to raise level on big stage again at world championshipsCanadian Andre De Grasse sets sights on 200m at World Athletics Championships
Read more »
Marketmind: China sets sombre tone with property turmoilChina continues to set the mood for markets, and the tone is unswervingly sombre. Property boom poster child China Evergrande has filed for Chapter 15 protection in a U.S. bankruptcy court, putting an exclamation point on a torrid week for the real estate sector and stoking expectations that authorities will at some point leap to the rescue with bold stimulus. Such hopes may have bolstered Chinese property shares in the Asian morning, but the wider markets in China and the rest of the region were gloomy.
Read more »
Marketmind: China sets sombre tone with property turmoilA look at the day ahead in European and global markets from Kevin Buckland China continues to set the mood for markets, and the tone is unswervingly ...
Read more »
Rand Steadies as China’s Yuan Sets Course for South Africa’s CurrencyThe rand steadied as South Africa’s currency tracks developments affecting its biggest export partner China, which is ramping up support for the yuan.
Read more »
Ex-Trump administration officials target corporate diversity effortsBy Daniel Wiessner (Reuters) - Activision Blizzard Inc and Kellogg Co have joined a growing list of major U.S. companies to face claims from a group ...
Read more »