IV Macro Policy & Sovereign Debt
Reserve requirement
The obligation for banks to hold a set share of their deposits and similar liabilities at the central bank.
How it works
When a bank takes in deposits or borrows, it cannot lend out all of that funding. The central bank requires a set proportion to be held with it; this is the reserve requirement. The higher the ratio, the less the bank has available to lend, and the lower the ratio, the more. That makes the reserve requirement a monetary policy tool alongside the policy rate.
As the CBRT defines it, the tool is not limited to deposits. It also covers funds obtained through repo, loans taken, securities issued and credit card liabilities. The requirement is calculated every other Friday and held for 14 days. Lira liabilities are covered in lira, and foreign-currency liabilities in dollars or euros. Ratios vary by maturity and type of liability.
Countries use the tool very differently. The Federal Reserve cut reserve requirement ratios to zero on 26 March 2020, in effect abolishing the tool. Türkiye, by contrast, differentiates ratios by type of liability to steer credit growth and the split of deposits between foreign currency and lira. The two countries' ratios therefore cannot be compared directly.
Why it matters here
Central banks turn to reserve requirements when they want to tighten or redirect liquidity without changing interest rates. A country under currency pressure can raise the ratio while holding the policy rate steady, a form of tightening that draws less attention than a rate decision. In oil-importing economies the tool is often deployed when an energy shock feeds into the currency; in October 2026 the Reserve Bank of India raised banks' daily minimum reserve requirement. We track reserve requirement changes as closely as rate decisions, because only the two together show the real dose of tightening.