Some 550 billion liras withdrawn with reserve requirements

Some 550 billion Turkish Liras were withdrawn from the system after reserve requirement ratios for Turkish lira deposits and FX-protected deposits (KKM accounts) were raised, the Central Bank has said.

The excess liquidity stemming from the surging domestic and foreign demand for lira financial assets was decided to be sterilized through additional measures, the bank said in the summary of the latest monetary policy committee meeting.

The bank decided to keep the key policy rate, the one-week repo auction rate, unchanged at 50 percent at its meeting on May 23.

Considering the recent developments in credit growth and deposits, additional steps were taken to preserve the macro-financial stability and to support the monetary transmission mechanism, the bank recalled in the summary of the meeting.

Meanwhile, data the bank released on May 30 showed that its gross reserves climbed to $142.2 billion as of May 24 from $139 billion in the previous week.

Net reserves of the Central Bank increased to $40.3 billion, while gold reserves declined slightly from $60.6 billion to $59.5 billion.

Separate data from the bank showed that residents' FX deposits with local banks declined by 1.44 percent week-on-week to $170.6 billion as of May 24, while lira deposits surged more than 174 percent to 9.3 trillion liras. The shares of lira and FX deposits in total deposits were 63 percent and 36.98 percent, respectively.