US$/TL rate goes down after covered interest rate decision from Central Bank

The Central Bank  of Turkey will now make “all” of the daily funding for banks using the late liquidity window. With this new step, the “weighted average funding cost” will increase by 25 basis points to 12.25 percent. While losses in TL continue, the fourth move came from the Central Bank this month.

The Central Bank will provide the whole daily funding for banks via “late liquidity window” (GLP) for the entire day-to-day banking from the beginning of the year. The Central Bank is funding approximately 120 billion TL for banks, each day. The CBRT, which previously provided 10 billion portion of this amount from Interbank, in the mornings, has taken a new step and shifted the entire funding to GLP by resetting this rate to null. Funding from GLP is held between 16:00 and 17:00.

With this step, the weighted average funding cost will increase by 25 basis points and the AOFM, which is currently 11.99 percent, will rise to 12.25 percent.

The USD / TRY rate which has renewed its historic summit with 3.9781 this morning, has gone down to the 3.95 level after this move of the Central Bank. The exchange rate was at 3.9550 as of 2:45 pm.