January 18, 2020 / 6:45 AM / a month ago

UPDATE 1-Turkish central bank adjusts gold limits in lira reserve requirements

(Adds comments from central bank)

ISTANBUL, Jan 18 (Reuters) - The Turkish central bank said on Saturday it had decreased the upper limit of holding standard gold to 20% from 30% of lira reserve requirements in a move to support financial stability and bring out gold savings into the economy.

By decreasing the limit, $1.7 billion equivalent of liquidity in terms of gold will be provided to the market and 4.5 billion lira liquidity will be withdrawn from the market, the bank said.

It said it was taking the step “to strengthen the monetary transmission mechanism, support financial stability and bring out gold savings into the economy”.

As part of the move it said it also increased the upper limit of holding standard gold converted from wrought or scrap gold collected from residents to 15% from 10% of lira reserve requirements.

In doing so, $300 million equivalent of liquidity in terms of gold will be withdrawn from the market, whereas 2 billion lira liquidity will be provided to the market. (Reporting by Nevzat Devranoglu and Can Sezer; Writing by Daren Butler; Editing by Muralikumar Anantharaman)

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