The Central Bank Lowers Interest Rates! The Central Bank of the Republic of Turkey has decided to reduce the interest rate applied to Turkish lira required reserves. According to the latest bulletin, the interest (remuneration) rate on Turkish lira required reserves has been reduced from 8% to 6%, effective 20 March 2020.
Rate Cut Effective from 20 March 2020
The cut in the interest rate on Turkish lira required reserves will take effect on 20 March 2020. The Central Bank announced that the revised remuneration rates for required reserves will be valid from that date.
Based on the announcement published on the Central Bank’s official website, the rate applied between 04 October 2019 and 19 March 2020 was 8%. With effect from 20 March 2020, this rate will be reduced to 6%. In addition, as of 6 March 2020, banks that meet the conditions set out in Communiqué No. 2020/6 on Required Reserves and demonstrate real credit growth will continue to be subject to an 8% rate, while other banks will be subject to a 0% rate for the relevant required reserve liabilities.