 The Turkish Central Bank, led by Gov. Durmuş Yılmaz, aims to encourage longer-term deposits and discourage short-term money parking. DAILY NEWS photo, Selahattin SÖNMEZ |
New reserve requirement rates for Turkish lenders, which determine the amount of cash they have to part with at the Central Bank, came into effect Friday.
According to the regulation published Dec. 17, 2010 in the Official Gazette, the previous rate of 6 percent for Turkish-Lira deposits has been altered to between 5 percent and 8 percent.
While the 11 percent rate for foreign exchange deposits remains unchanged, for Turkish-Lira deposits the new rates will be 8 percent on deposits that have a maturity of up to one month, 7 percent for three and six-month maturities, 6 percent for one-year maturities and 5 percent for maturities longer than that.
Accordingly, the Turkish Central Bank aims to encourage longer-term deposits and discourage short-term money parking.
The move comes as a host of other emerging economies have started taking similar precautions in efforts to mitigate the negative effects of short-term capital inflows from developed markets.
Brazil’s central bank on Thursday announced that domestic banks would have to hold higher reserve requirements against foreign exchange positions. “The decision follows Chile’s decision this week to intervene in currency markets to hold down the peso,” the Financial Times reported Friday.
Brazil’s real has appreciated about 13 percent against the U.S. dollar since May. The advance puts an extra burden on Brazilian exporters.
Vietnam and China
Vietnam is also ordering banks to set aside more money as reserves, according to a government official. The measure is one of several that have been presented to Prime Minister Nguyen Tan Dung for approval this month, the official told Bloomberg News, speaking on condition of anonymity.
Vietnam’s bank reserve ratios may be increased to as high as 10 percent for dollar deposits, and about 7 percent for local currency – dong – deposits, the official said. They currently range from 2 percent to 4 percent for dollar deposits and 1 percent to 3 percent for dong deposits.
China’s central bank also plans to examine lending and capital levels at domestic banks each month to determine the reserve requirements of individual lenders, according to the China Securities Journal.
Banks may face higher requirements if their capital adequacy ratios fall below mandated levels, the newspaper said, citing an unidentified person close to the People’s Bank of China.
China’s biggest banks face an 18.5 percent reserve ratio excluding any additional requirements for individual lenders not publicly announced. For smaller lenders, the level is 16.5 percent. In a statement Thursday, China’s central bank said it will maintain “rational and appropriate” liquidity in the banking system with market tools including interest rates, reserve ratios and open market operations.
The bank said it will guide steady growth of loans by adjusting “differentiated reserve ratios,” similar to those implemented in Turkey.
The Turkish bank also bought $50 million from Turkish lenders Friday, at an average price of 1.5666 liras per dollar. The Central Bank bought $250 million this week, compared with last week’s $317.1 million.
According to the regulation published Dec. 17, 2010 in the Official Gazette, the previous rate of 6 percent for Turkish-Lira deposits has been altered to between 5 percent and 8 percent.
While the 11 percent rate for foreign exchange deposits remains unchanged, for Turkish-Lira deposits the new rates will be 8 percent on deposits that have a maturity of up to one month, 7 percent for three and six-month maturities, 6 percent for one-year maturities and 5 percent for maturities longer than that.
Accordingly, the Turkish Central Bank aims to encourage longer-term deposits and discourage short-term money parking.
The move comes as a host of other emerging economies have started taking similar precautions in efforts to mitigate the negative effects of short-term capital inflows from developed markets.
Brazil’s central bank on Thursday announced that domestic banks would have to hold higher reserve requirements against foreign exchange positions. “The decision follows Chile’s decision this week to intervene in currency markets to hold down the peso,” the Financial Times reported Friday.
Brazil’s real has appreciated about 13 percent against the U.S. dollar since May. The advance puts an extra burden on Brazilian exporters.
Vietnam and China
Vietnam is also ordering banks to set aside more money as reserves, according to a government official. The measure is one of several that have been presented to Prime Minister Nguyen Tan Dung for approval this month, the official told Bloomberg News, speaking on condition of anonymity.
Vietnam’s bank reserve ratios may be increased to as high as 10 percent for dollar deposits, and about 7 percent for local currency – dong – deposits, the official said. They currently range from 2 percent to 4 percent for dollar deposits and 1 percent to 3 percent for dong deposits.
China’s central bank also plans to examine lending and capital levels at domestic banks each month to determine the reserve requirements of individual lenders, according to the China Securities Journal.
Banks may face higher requirements if their capital adequacy ratios fall below mandated levels, the newspaper said, citing an unidentified person close to the People’s Bank of China.
China’s biggest banks face an 18.5 percent reserve ratio excluding any additional requirements for individual lenders not publicly announced. For smaller lenders, the level is 16.5 percent. In a statement Thursday, China’s central bank said it will maintain “rational and appropriate” liquidity in the banking system with market tools including interest rates, reserve ratios and open market operations.
The bank said it will guide steady growth of loans by adjusting “differentiated reserve ratios,” similar to those implemented in Turkey.
The Turkish bank also bought $50 million from Turkish lenders Friday, at an average price of 1.5666 liras per dollar. The Central Bank bought $250 million this week, compared with last week’s $317.1 million.
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