Turkey to tweak banks’ required reserves in 2020, Albayrak says

Turkey’s central bank will be very active in making adjustments to banks’ required reserves this year as the authorities seek to direct lending to the economy.

Turkey will closely track banks and their lending practices, Treasury and Finance Minister Berat Albayrak said in Istanbul on Monday, according to Dünya newspaper.

The central bank has begun adjusting the amount of reserves that banks are required to deposit in its coffers, reducing the total amount if they lend more to the economy and, most recently, encouraging them to approve more loans to businesses rather than consumers.

The central bank may introduce further measures encouraging banks to lend to specific sectors of the economy, according to recent reports in the Turkish media.

The coming year will be one of further transformation for Turkey’s economy, Albayrak said.

Albayrak said people should focus on nominal interest rates in Turkey, when asked about the central bank’s main lending rate of 11.25 percent, which is now negative when compared with annual inflation of 11.8 percent.