Central Bank of the Rupblic of Turkey/Bloomberg
The regulator is suspending one-week repo auctions for an unspecified period “considering the developments in financial markets.
Sunday 24, March 2019
(Bloomberg) –The Central Bank of Turkey (CBRT) unexpectedly tightened its monetary stance after the lira weakened, leading a retreat among emerging-market peers.
The announcement comes less than a year after the central bank said it would use one-week repos as its main funding tool, abandoning an older framework that allowed the institution to adjust daily the cost of cash provided to banks.
Currently, the central bank has two other instruments reserved for emergency lending, but it did not say which one it would use. Interest rates for overnight lending and the late liquidity window stand at 25.5 per cent and 27 per cent, respectively. The rate for the suspended repo auctions was 24 per cent.
The lira briefly trimmed its losses following the bank’s statement before weakening anew. The currency was trading two per cent lower at 5.6 per dollar in Istanbul after falling as much as 2.5 per cent.