Turkish banks soar on 'interest payment' remarks
Wednesday, April 02, 2014
ISTANBUL – Shares in banks processed in Borsa Istanbul rose by about 25 percent last month after Turkey's central bank announced it may pay banks interest on capital they deposit with it.
The bank's monetary policy committee discussed on 25 March the possibility of making the payments to ensure that banks have the “required reserve ratios” - an adequate volume of liquid assets necessary for the banks to meet any unusually high number of withdrawals, commonly referred to as a "rush", according to minutes released on Wednesday.
Following the remarks in the meeting, investors rushed to put their money in banking shares processed in Borsa İstanbul, driving their value up by about 25 percent over the past 30 days.
The banking index, which was 106.746 points at the end of February 2014, recorded a19.3 percent increase in March and extended its gain to 25 percent during first days of April, compared to February's figures.
Shares in Vakıfbank topped the gainers with a rise of 29 percent, followed by Halkbank with 28 percent and Yapı Kredi, Garanti Bankası and Akbank all showing 27 percent increases.
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