At the meeting held with senior bankers who are members of TBB (The Banks Association of Turkey), CBRT Governor Prof. Dr. Şahap Kavcıoğlu gave messages about the protection of the value of the local currency, a possible RR arrangement and the planned swap agreements. According to this;
Mr. Kavcıoğlu promised to take the necessary steps to protect the value of TRY. A rhetoric compatible with tight monetary policy. The CBRT re-referenced the emphasis on tight monetary policy at the last MPC meeting. Currently, we expect interest rates to remain at current levels for a few more months due to the commitment to apply interest rates above inflation. Kavcıoğlu, in his last meeting with economists, stated that they would not make an early easing. Due to the risks posed by the weak lira and commodity prices on inflation, the Central Bank has to take a hawkish stance.
Kavcioglu said the central bank could make changes to the reserve requirement rule after consulting with banks to improve the lira’s credibility. We can think that it is a situation related to increasing the usage and effectiveness of RR’s in monetary policy. We can expect the RR ratios to increase in line with the tightening monetary policy plan. We would like to remind you that the main function of RRs in monetary policy is to “support the main tools”.
Kavcioglu told bankers that the CBRT is in talks with four equivalent central banks for new swap agreements. Recently, a new swap agreement was announced with China. The functionality of swap agreements for us; in the form of increasing gross reserves and facilitating trade in local currency. We assume that there will be no “hard currency” based swap such as the Fed or ECB among the possible swap agreements. There may be a swap agreement with countries that are equivalent to Turkey or based on Asia. We still have to be cautious about our net reserve adequacy position excluding swaps.
Kaynak Tera Yatırım
Hibya Haber Ajansı
Kaynak: Hibya Haber Ajansı