Turkey to draw 22.5 bln TL by reserve ratio arrangements

Durmus Yilmaz said economy bureaucrats expected the changes in required reserve ratio to affect cost and liquidity of loan market.

Turkey to draw 22.5 bln TL by reserve ratio arrangements

The governor of Turkey's Central Bank said on Tuesday that Turkey would draw 22.5 billion Turkish liras-TL (14.4 billion USD) from markets by newly-introduced reserve ratio arrangements.

Durmus Yilmaz said economy bureaucrats expected the changes in required reserve ratio to affect cost and liquidity of loan market.

"We will have drawn 22.5 billion TL from markets with the mentioned arrangements," Yilmaz told a press conference in Ankara.

The Central Bank of Turkey raised Turkish lira (TL) required reserve ratio on Monday. The reserve ratio for current, call and special accounts was up to 12 percent from 8 percent. The bank raised reserve ratio for up to one-month deposits/participation accounts to 10 percent from 8 percent, and for up to three-month deposits and special funds to 9 percent from 7 percent. The Central Bank increased reserve ratio for liabilities other than deposits/participation funds to 9 percent from 8 percent.

The decision will be valid as of February 4.

Yilmaz underlined importance of closely monitoring loans, and restricting possible macro-financial risks, and said recent figures indicated that the industrial slowdown in the third quarter of 2010 was temporary.

The governor said the bank had updated its oil price projections around 95 USD for 2011 and afterwards, and forecast that import prices would be up 10.9 percent in 2011.

"These projections cause a 35 base points upward update in our year-end inflation forecast for 2011," he said.

Yilmaz said Turkey would take some additional measures in case loans and inflation grew more than expectations.

The year-end inflation target for 2011 could be achieved if loan growth rate was around 20-25 percent, he said.

Yilmaz said Turkey's inflation would be around 5 percent in mid-2012 if the effects of the rise in commodity prices were eliminated.

The governor also said the bank could update its monetary policy if the financial outlook changed and this change had a negative impact on the medium-term inflation rate.

According to the inflation report Yilmaz made public during the press conference, the year-end inflation will be between 4.5 and 7.3 percent, with a mid-point of 5.9 percent in 2011.

The bank forecasts the inflation between 3.3 and 6.9 percent with a mid-point of 5.1 percent by the end of 2012.


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Last Mod: 25 Ocak 2011, 13:45
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