Turkish Central Bank takes step to boost lira's value

By Fatih Erkan Dogan

ANKARA

Turkey’s Central Bank has taken a step to boost the value of Turkish lira by increasing the bank’s U.S. dollar denominated reserves.

The bank raised interests paid to local lenders’ U.S. dollar reserves by 25 basis points on Tuesday, the Central Bank said in a statement.

Interest rates paid to lenders as part of a local bank’s required reserve ratio that are deposited in the Central Bank has been hiked to 1 percent from 0.75 percent, it said.

The required reserve ratio is a share of a local bank’s balances that it is obliged to deposit in the Central Bank.

The ratio is determined by the Central Bank to affect money supply in local markets.

The move is aimed at encouraging lenders to keep their U.S. dollar deposits in the Central Bank and boost the value of the domestic currency Turkish lira, the statement added.