CBT Exit Strategy To Remain In Place

The Central Bank of Turkey (CBT) will continue to pursue its gradual 'exit strategy', which it first announced in April, in a push to return monetary policy to pre-crisis conditions. In a press release on July 29, the CBT announced it was raising the FX reserve requirement ratio for banks by 50 basis points (bps) to 10.00% from 9.50%, a move the CBT expects will soak up approximately US$719.6mn in FX liquidity. This comes on the back of a 50bps increase in the FX minimum reserve requirement for banks from 9.00% to 9.50% on April 26, shortly after the central bank first outlined plans for a monetary policy 'exit strategy' on April 14.

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