Türkiye's central bank cuts collateral haircuts and eases reserve rules

The Central Bank of the Republic of Türkiye changed the liquidity and reserve rules for banks twice in two weeks, widening lira funding on 17 September and easing reserve and lending rules on 1 October, its liquidity press release and macroprudential press release said.

The moves came while the policy rate stayed at 37 per cent.

Liquidity measures of 17 September

"In view of the developments in financial markets", the central bank said it had reviewed its liquidity facilities. It announced three changes in its release. The amount of funding through one-week repo auctions will be increased when needed, taking liquidity conditions into account. Banks' borrowing limits at the central bank's Interbank Money Market will be revised in light of the banking system's existing balance sheet aggregates. Collateral haircuts applied in the central bank's markets will be revised and reduced.

The release gave no figures and did not name a trigger beyond market developments. The summary of the 10 September rate meeting, published the same day, said that increased uncertainty and fluctuations in risk appetite had led to "capital outflows from emerging stock markets", and that downside risks to portfolio flows remained elevated. The committee added that it would support monetary transmission through additional macroprudential measures if credit and deposit markets developed in unanticipated ways.

The steps build on a decision announced on 23 August to resume one-week repo auctions that had been suspended on 1 March 2026.

Reserve and lending changes of 1 October

On 1 October the central bank said in its release that it had made changes to the reserve requirement framework "to support macrofinancial stability and banks' liquidity management". The growth limit for loans to small and medium-sized enterprises was raised from 4.5 per cent to 5 per cent. The ratios for maintaining lira required reserves in blocked accounts were lowered. The release did not state the new reserve ratios or the period over which the growth limit applies.

The governor's data and what comes next

On 6 October Governor Fatih Karahan presented to the Plan and Budget Committee of the Grand National Assembly. His slides describe the macroprudential toolkit as three groups of measures: regulations on deposits, including targets for the lira deposit share; regulations on loans, including limits on lira and foreign-currency loan growth; and liquidity management through reserve requirements, lira deposit auctions and buy-side and sell-side swap auctions.

The same presentation gives a picture of the credit cycle the tools are managing. Total loan growth, measured on a 13-week annualised, FX-adjusted basis, was 24.3 per cent on 25 September. Lira commercial loans grew 35.4 per cent, retail loans 25.8 per cent and foreign-currency loans 12.0 per cent on the same basis.

Asset quality is mixed. Non-performing loan ratios on 25 September were 2.4 per cent for commercial loans, below the 2010 to 2025 average of 3.0 per cent, and 3.8 per cent for SME loans against an average of 4.3 per cent, the slides show. General-purpose consumer loans stood at 6.2 per cent, well above their 3.9 per cent average, and credit cards at 5.4 per cent against 5.2 per cent. The lira share of deposits was 61.4 per cent, or 61.0 per cent including mutual funds.

The presentation also shows gross international reserves of $171.2 billion on 25 September, compared with $149.2 billion on 26 June and $210.3 billion on 27 February. The committee summary had put gross reserves at $184.2 billion on 4 September. One slide is headed "Risk and volatility indicators have risen slightly in the recent period", while another is headed "The post-war decline in reserves has been partially recovered".

The Monetary Policy Committee met on 22 October, as AzerNews had reported it would, and the summary of that meeting is due on 30 October; the decision is on the Türkiye interest rate tracker. Economists polled by Anadolu Agency Finance before the September meeting put the median year-end policy rate at 35 per cent. The central bank said in its release on 17 September that it will keep monitoring liquidity conditions and take additional measures when needed.

Correction, 24 October 2026: An earlier version said the Monetary Policy Committee next meets on 22 October. That meeting took place before this article was published.