In a significant move aimed at bolstering the lira, Turkey has increased the cost for banks to provide short-term deposits, a policy change that forms part of a $124 billion government-backed lira savings program. The new regulation was issued by the central bank and published in the Official Gazette on Thursday.
Under this new rule, lenders are required to hold larger reserves for accounts with durations of up to six months. This measure is designed to shield lira deposits from devaluation against stronger currencies. It's part of an effort by the Turkish government to absorb billions in liquidity and dissuade individuals from converting their assets into dollars.
This tightening of monetary policy is expected to have broad implications, as it aims to stabilize the national currency by reducing its supply in the market. By making it more expensive for banks to provide short-term deposits, the move is designed to encourage longer-term investments in the lira and discourage short-term speculation.
The policy change is one of several steps taken by Turkey in recent times to strengthen its economy and protect its currency. The $124 billion government-backed lira savings program is a significant initiative in this regard, aimed at promoting savings in the local currency and reducing reliance on foreign currencies.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.
Add Chart to Comment
We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:
- Enrich the conversation
- Stay focused and on track. Only post material that’s relevant to the topic being discussed.
- Be respectful. Even negative opinions can be framed positively and diplomatically.
- Use standard writing style. Include punctuation and upper and lower cases.
- NOTE: Spam and/or promotional messages and links within a comment will be removed
- Avoid profanity, slander or personal attacks directed at an author or another user.
- Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
- Only English comments will be allowed.
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.