Since the outbreak of Covid-19 pandemic, Banking Regulation and Supervision Agency of Turkey ("BRSA") has introduced certain restrictions toward Turkish banks in response to the slowdown of economic growth in Turkey. Accordingly, on 5 May 2020, BRSA, with its decision numbered 9010, has limited the sum of TRY placements, TRY reserves, TRY repo and TRY loan transactions that Turkish banks (including such banks' foreign branches and consolidated foreign partnerships in the form of credit or financial institutions on abroad) engage with FFIs, to 0,5 percent (0.5%) of the respective bank's most recently calculated equity1 .
This time, on 27 November 2020, with its decision numbered 9273, BRSA loosened the limits on Turkish banks' TRY transactions engaged with FFIs and raised the afore-mentioned ratio from 0,5 percent (0.5%) to 2,5 percent (2,5%). With the same decision, the intraday overdraft TRY credit limits granted to FFIs by Turkish banks are exempted from this restriction.
In brief, BRSA has taken another step toward normalization in the banking sector.
1. You may access our publication related to the respective BRSA decision from the following link: https://www.sadik-sadik.com/new-restriction-by-brsa-on-turkish-banks-try-transactions-with-foreign-financial-institutions/.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.