Turkish banks will have to hold a greater amount of gold and foreign exchange (forex) if they want to diversify their reserves away from Turkish lira, following a rule change by the Central Bank of the Republic of Turkey.
The central bank operates a ‘reserve options mechanism' to protect the Turkish economy against volatile capital flows with a "controlled and effective provision of liquidity" to the market, according to Orhan Kandar, the deputy executive director of markets at the central bank.
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