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TURKEY: CBRT Begins Buying Liras Using Overnight Borrowing Rate

TURKEY
  • The Turkish central bank has started placing buy orders for TRY at Takasbank’s money market using the overnight borrowing rate, according to a document sent to Takasbank and seen by Bloomberg. The move is part of the central bank’s strategy to reduce excess lira, which risks undermining its tight monetary stance.
  • The central bank’s overnight borrowing rate is at 47%, 3 ppts below its policy rate.
  • As a reminder, CBRT Governor Fatih Karahan said last week that they would “sterilize excess liquidity by engaging in transactions in other money markets in the near future.”

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