Turkey’s Central Bank offers banks unlimited liquidity

Türkiye Materials 17 July 2016 19:06 (UTC +04:00)

Turkey’s Central Bank said Sunday that it would cut the commission on daily liquidity options for banks to zero as well as provide them with unlimited liquidity to maintain efficient functioning of the financial markets following Friday’s failed coup, Anadolu reported.

"The Central Bank will provide banks with needed liquidity without limits," the CB said on its website. "The commission rate for the Intraday Liquidity Facility will be zero."

The CB said that banks would be allowed to place foreign exchange deposit as collateral without limits for needed Turkish lira liquidity.

The move came after the dollar rose against the lira to its highest level in recent months on Friday night after the attempted coup, with the dollar reaching 3.05 Turkish liras, an increase of 5 percent.

The bank emphasized that all measures would be taken to ensure financial stability "if deemed necessary."

"Market depth and prices will be closely monitored," the bank said.

The Central Bank added that it would increase the daily foreign exchange auction from the current $50 million if needed.

Meanwhile, Deputy Prime Minister Mehmet Simsek, who is responsible for the economy, touted Turkey’s economic strength on Twitter.

"Our country's macroeconomic fundamentals are strong. We are taking all the necessary measures. We are strong with the support of our people and strengthened political stability," he tweeted.

He said he had spoken with the heads of both the Treasury and Central Bank. "We have decided on all the necessary measures. We are in charge. There is no need for concern," he said.

Simsek added that he would hold a conference call with international investors on Sunday.