Central bank suspends repo auctions
Turkey’s Central Bank has suspended its one-week repo auctions in a bid to defend the Turkish Lira.
At the latest Monetary Policy Committee meeting, held on April 25, the bank decided to keep the policy rate (one-week repo auction rate) constant at 24 percent.
“Considering the developments in financial markets, it has been decided to suspend the one-week repo auctions for a period of time,” the Central Bank said in a statement published on its website yesterday.
The Central Bank did not say when it might resume the auctions.
Bankers told Reuters that the central bank’s move would gradually raise the average cost of funding to 25.5 percent.
On March 22, the bank took a similar action and suspended the auction.
It started to hold the one-week repo auctions again on April 8.
Meanwhile, the central bank yesterday reported that its gross foreign exchange reserves eased to $72.6 billion as of May 3 from $73.3 billion on April 26. Foreign exchange reserves stood at $86.2 billion on May 4, 2018.
Separate data from the bank, released yesterday, showed that non-resident investors bought $183 million worth of Turkish equities in the week ending May 3, after selling $82 million worth of stocks in the previous week.
The Central Bank calculated that market value of non-resident investors’ holdings of Turkish equities stood at $27.7 billion as of May 3 versus some $28 billion on April 26.
According to data, foreign investors sold $226 million worth of government debt securities in the same week. That followed a total of $1.22 billion of outflows from the debt securities market in the previous five weeks.
Market value of foreign investors’ holdings of government debt securities was $12.64 billion as of May 3, down from $13.3 billion on April 26.