As part of measures to tighten the liquidity of the Central Bank, After the increase in the reserve requirement for deposits with currency protection (CCM) from 8 percent to 15 percent, new methods of increasing interest in investment instruments other than CCM will come into force.
WORK ON ALTERNATIVES
According to the information received, new steps will be taken to channel citizens’ savings into alternative investment instruments instead of cash registers. It was stated that the Ministry of Treasury and Finance is working on alternative investment vehicles that will reduce the attractiveness of KCM.
This issue was also discussed at the last meeting of the Economic Coordinating Council, and it was decided to evaluate new alternatives at the next meeting. The application for treasury support at KCM was finally submitted to the Central Bank.
WILL NOT END IMMEDIATELY
Economic Management Resources “The next meeting will discuss the formulas that will keep citizens from the KKM. It was emphasized that the credibility of TL should be increased and the savings should be directed to other areas. With the responsibility for KCM removed from the Treasury and transferred to the Central Bank, work is underway on new steps to be taken. The Central Bank will henceforth manage the entire KCM. The process will be managed as a whole. The purpose of the KCM is to maintain the stability of the exchange rate. The central bank will manage the next process more effectively.” gave his assessment.
According to the management of the farm, it is not possible to immediately stop the practice of KKM. This practice will continue until the exchange rate settles on a more stable basis. However, over time, various investment vehicles will come into play to reduce the propensity for CCM.
EARTHQUAKE BONDS TO BE ISSUED
On the other hand, the Ministry of Treasury and Finance is preparing to implement the earthquake financing agreement signed with the UAE. In this context, it is indicated that the works related to the issuance of earthquake-resistant bonds, that these bonds must be non-refundable for at least 5 years and the interest rate that will be applied at the end of the maturity, are at the stage of completion. . It was announced that the UAE would soon receive $8.5 billion worth of bonds, and thus the resources would be provided to Turkey. During President Recep Tayyip Erdogan’s visit to the Gulf states, it was decided that the Abu Dhabi National Difference Fund would also provide $3 billion in export finance support to Eximbank for use by Turkish companies.
INCREASE CONTINUES ON KKM ACCOUNTS
Exchange-protected deposits and participation accounts in Turkish lira increased from 3 trillion 73.9 billion Turkish liras to 3 trillion 132 billion Turkish liras in the week ended July 28, according to the Banking Regulation and Supervision Agency (BDDK).
Thus, during the week, 58 billion liras were transferred to the accounts of KCM.
The required reserve ratio at KCM was increased to 15 percent on 21 July. Previously, the required reserve ratio was 8 percent.
After the regulation of required reserves, weekly growth slowed down. For the week of July 21, the growth amounted to 111 billion lira.