With the regulation made by the Banking Regulation and Supervision Agency (BDDK), the upper limit for the share of banks’ net foreign exchange position in their own resources was reduced from 20 percent to 5 percent.
The amendments made by the BRSA to the “Regulation on the Calculation and Application of the Foreign Currency Net General Position/Equity Standard Ratio by Banks on a Consolidated and Unconsolidated Basis” were published in today’s issue of the Official Gazette.
Within the scope of the changes, the standard ratio calculated by taking the ratio of banks’ FX net position to equity was revised downwards.
Accordingly, the standard rate set at 20 percent in the current practice has been reduced to 5 percent. The change will be in effect from January 9, 2023.
On the other hand, with the amendment made, the Board was authorized to increase the standard rates up to 4 times as of the date of the decision to be taken in this direction, or to reduce it up to 1 in 4, which will enter into force 1 month after the date of the decision to be taken in this direction at the earliest.
The regulation determines the procedures and principles regarding the ratio of net foreign currency position to equity, which banks will apply in order to ensure that the relations and balances between foreign currency assets and liabilities are established, and that they maintain a foreign currency position in line with their own resources.
While the said regulation was published in 2006, the last update was made in 2014.
With the last amendment, it is aimed to reflect the changes brought by other regulations over the past period to the regulation and to make a calculation closer to the ratio of the net foreign currency position calculated by the banks within the scope of their own internal practices to the equity.
