Erdogan Cuts Energy Tariffs, CBRT Raises FX Deposit Reserve Requirements

LOCAL NEWS

• Erdogan announces cuts to fixed electricity prices amid a sharp rise in tariffs. Says Govt will remove a fixed 2% payment for the funding of state run TRT broadcaster and another 1% payment levied for outstanding energy costs.
  • Erdogan: "by neither disrupting the balance of our energy firms nor victimizing our citizens, we will keep managing this global energy crisis"
• CBRT raises reserve requirement ratios for foreign currency deposits by 200 basis points, according to a decree published in Official Gazette.
  • Reserve requirement ratio for FX deposits/participation funds up to one year maturity raised to 25% from 23% and ratio for those with one year or longer maturity raised to 19% from 17%.
  • Ratio for precious metal deposit accounts up to one year maturity raised to 26% from 24% and the ratio for those with one year or longer maturity raised to 22% from 20%.
  • Lira-denominated required reserves are expected to increase by approximately 7.4b liras, and foreign currency required reserves are expected to increase by an equivalent of approximately $3.8b.
  • Upper limit of facility for holding standard gold for Turkish lira reserve requirements has been decreased from 15% to 10%. This facility will be gradually decreased and terminated.
  • changes will be effective from the calculation date of Oct. 28 with the maintenance period starting on Nov. 12
• EBRD commits EUR 1.5bn to Turkey with half to be used for green financing to add to EUR 14bn allocated since 2009 (50% to green initiatives).