ANKARA: Turkey’s Central Bank said Monday that it would expand its rediscount credit facility by $3 billion to $20 billion, to maintain efficient functioning of the financial markets following July 15’s failed coup.
“The overall limit of rediscount credits has been increased from $17 billion to $20 billion in order to expand the utilization of the Turkish Central Bank’s rediscount credit facility and increase the contribution of rediscount credits to the bank foreign exchange reserves,” the Central Bank said in a statement.
The Central Bank said that out of total amount, $17 billion has been allocated to Turk Eximbank and $3 billion to commercial banks. In line with the increased overall limit for rediscount credits, the credit limit per company for foreign trade capital companies has been raised from $300 million to $400 million and for other companies, from $250 million to $350 million, the bank also said.
“The increase in limits is envisaged to lead to a surge in the utilization of the CBRT’s rediscount credit facility and a rise in the contribution of rediscount credits to the foreign exchange reserves.” the bank added. The deadly coup attempt began late on July 15 when rogue elements of the Turkish military tried to overthrow the country’s democratically elected government.
Turkey’s central bank stepped in on July 17 to provide liquidity to the financial system. Top economic officials, including Deputy Prime Minister Mehmet Simsek, have been trying to reassure investors that the failed coup will not cause permanent damage to Turkey’s economy. The Central Bank also said on Friday it would start holding technical talks with international investors, analysts and regular meeting with journalists, following the failed July 15 coup.
