Central Bank announces new measures to support exporters

ANKARA

The Central Bank has announced new measures to reduce the costs of Turkish exporters and raise the limits imposed on companies' rediscount credits.

According to the instructions the bank sent to lenders, the total interest rate cost of rediscount credits will not exceed the level of the central bank's policy rate. This move is expected to reduce companies’ costs by around 15 percentage points.

The Central Bank last month raised its policy rate, the one-week repo auction rate, by 500 bps from 25 percent to 30 percent.

The bank also changed the limits for rediscount credits.

Accordingly, the rediscount limits for micro-enterprises, small-enterprises and medium-sized enterprises will be 5 million Turkish Liras, 50 million liras and 250 million liras, respectively.

These measures followed the steps the bank announced last month. In September, the Central Bank said that the daily limit for rediscount credits for export and foreign exchange earning services was raised from 1.5 billion liras to 3 billion liras in order to support selective credit utilization and exporters' access to finance.

Meanwhile, the decline in the money held in the FX-protected deposit scheme, known as KMM, continues.

The KMM fell by 1.25 billion liras on a weekly basis to stand at 3.3 billion as of Sept. 29, data from the Banking Regulation and Supervision Agency (BDDK) showed.

The Central Bank began rolling back the FX-protected deposit scheme in August.