New reserve requirement decision in KKM

According to the decision published in the Official Gazette, the required reserve ratio for currency protected deposit (CCD) accounts with a maturity of up to 6 months was increased from 15 percent to 25 percent. The Communiqué on Amendments to the Communiqué on Required Reserves was published in the Official Gazette. Accordingly, the required reserve ratio for currency protected deposits was differentiated according to maturity, while the required reserve ratio for up to 6 months maturity, where CDC is concentrated, was increased by 10 points to 25 percent. As a step encouraging the transition to TL term deposits, the required reserve ratio for currency protected deposits with a maturity of up to 6 months (including 6 months) was increased to 25 percent. The required reserve ratio for those with a maturity of up to 1 year and 1 year and longer was determined as 5 percent. Previously, the obligation to establish required reserves in currency protected accounts was 15 percent for all maturities. Thus, the TL liquidity surplus created in the market will continue to be withdrawn from the system with the increase in the required reserve ratio. At the same time, TL term deposits will be supported, while long-term will be emphasized in KKM. It is expected that approximately 300 billion TL of excess liquidity will be withdrawn from the market with the required reserve change. The required reserve increase is also expected to be more encouraging for banks regarding their KKM to TL deposit conversion targets. In the decision of the CBRT Monetary Policy Committee dated August 24, 2023, it was stated that in addition to the interest rate hike, selective credit and quantitative tightening decisions that will support the monetary tightening process will continue to be taken.