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WALL – At the first meeting of the new president Naci Ağbal yesterday, the Central Bank increased its policy rate by 475 basis points to 15 percent, and decided to do all the financing of a weekly repo. It was also emphasized in the text of the decision that the rigidity of the monetary stance will be maintained with determination. The Central Bank also increased the TL interest used in weekly swap transactions from 13.25 percent to 15 percent.
With the decision taken last week, the Banking Regulation and Supervision Agency (BRSA) increased the exchange limits. Consequently, the ratio between the total of said transaction and the last calculated legal equity of the banks is 5 percent instead of 2 percent for transactions with 7 days due, 10 percent instead of 5 percent for transactions with 30 days due and 20 percent for transactions with 1 year remaining. instead, it was decided to re-designate it as 30 percent.
Cumhur Örnek, research manager at Bloomberg HT, commented that CBRT led banks to exchange transactions with foreign banks risking the loss of reserves with the increase in exchange rates. Noting that the step taken last week was a step towards strengthening the monetary policy transfer mechanism by increasing the interaction between domestic and foreign interest rates, Örnek drew attention to the advantage of the carry trade by closing the gap between London interest rates and domestic swap rates. For example, he said that this decision could be supported by portfolio inflows to Turkey. According to the latest foreign interest declarations in the weekly interest rate swap transactions to be implemented in Turkey, it is at a lower level. (NEWS CENTER)
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