Turkey's central bank has decided to complete the simplification process regarding the operational framework of its monetary policy
- One-week repo will be the policy rate of the central bank
- The rate will be equal to current funding rate - which is 16.5%
- Overnight borrowing, lending rates will be determined at 150 bps below/above the one-week repo rate
- New operational framework will be effective from 1 June
The change here should allow the CBRT to move and raise rates in a more significant manner. Earlier the news was reported by BloombergHT TV and the lira did firm up as a result - since this will put to bed the absence of a single policy rate.
USD/TRY is now trading at 4.63 levels with the lira being the best performing emerging market currency today, up almost 2% against the greenback.
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