Turkey Alters Key Lira Savings Program in Latest Tightening
- Reserve ratio is being raised on most FX-linked lira deposits
- Program known as KKM holds $124 billion, straining finances
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Turkey is making it costlier for banks to offer short-term deposits that make up the bulk of a $124 billion government-backed lira savings program, a tightening of policy that will soak up billions in liquidity and attempts to discourage people from shifting into dollars.
Lenders now need to set aside more money as reserves for accounts of up to six months, which protect lira deposits from depreciation against hard currencies, according to a new central bank regulation published in the Official Gazette at midnight.