With the use of central bank reserves to protect the lira’s value before the election, reserves fell to a historical low in early June, with net reserves at minus $5.7 billion.
Hence, there is no use of foreign exchange reserves and a period of increasing reserves has started," he added.
His comments echoed the view of bankers that the central bank had "completely stopped" using its reserves.
CENTRAL BANK MEASURESUnder new central bank steps announced at the weekend, the securities maintenance ratio that banks are required to allocate to their foreign currency deposit was reduced to 5% from 10%.
The new regulation said banks whose lira deposits are less than 57% of total deposits will have to hold an additional seven percentage points of securities, compared to the previous seven additional points applied to banks that held less than 60% lira deposits.
Persons:
Murad Sezer, Lira, Tayyip Erdogan, Hafize Gaye Erkan, Enver Erkan, Daren Butler, Canan, Jonathan Spicer, Emelia Sithole
Organizations:
REUTERS, Securities, Bankers, Thomson
Locations:
Istanbul, Turkey, ANKARA, backtrack, Turkish