Turkey cenbank adjusts required reserves to boost lira
Adds recent lira, market moves
ISTANBUL, Aug 30 (Reuters) -Turkey's central bank has taken further steps to encourage local currency holdings by adjusting required reserves according to the level of lira deposits in banks, in its latest monetary tightening measure.
The move, announced late on Thursday, comes as the lira slipped nearly 3% in August to touch new lows in recent days, and as foreign holdings of Turkish bonds eased recently.
The bank said it raised the monthly reserves growth target to 0.8 percentage points for banks with 45-50% lira deposits by individuals, scrapped the target for those with more than 60% and adopted a new incentive for keeping it above that level.
It also added "legal person" accounts to the overall calculation of banks' targets for transitioning clients away from state FX-protected lira deposits (KKM) and into normal accounts.
The bank raised the upper limit for the remuneration of required reserves to 84% of the policy rate - now set at 50% - based on the KKM transitions. The ratio of maintaining lira required reserves in blocked accounts was raised by 5 points.
The measures should increase the deposit interest rate and result in more monetary tightening, former central bank chief economist and Bilkent University professor Hakan Kara said on X.
Since June last year, the central bank has hiked its main policy rate to 50% from 8.5% and pledged to keep it there for now to face down inflation that was near 62% in July.
The lira TRYTOM=D3 held steady between March and July but slid in August and was worth 34.62 to the dollar on Friday.
Reporting by Jonathan Spicer and Canan Sevgili;
Editing by Helen Popper and Toby Chopra
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