The Central Bank of Turkey moves to back liquidity management

The Central Bank of Turkey (CBRT) Monday decided to provide primary dealer banks with a liquidity facility within the framework of open market operations.

The bank took the step to support the Primary Dealership System in view of its contributions to the deepening of financial markets and the effectiveness of monetary policy.

"The interest rate to be applied to this liquidity facility, which will be used through overnight repo transactions within predetermined limits, will be set at 100 basis points below the Central Bank's policy interest rate," it said.

Last Wednesday, the bank held the fourth Monetary Policy Committee meeting of this year and kept its one-week repo rate -- also known as the bank's policy rate -- steady at 24%.

"The limits for the Primary Dealer liquidity facility will be determined taking into account the amount of Government Domestic Debt Securities purchased by Primary Dealer banks through the Treasury auctions.

"And this facility will have a limited share within the overall Central Bank funding," it added.