Turkey: Central Bank to halve overnight borrowing limits

By Tuba Sahin

ANKARA (AA) – Turkey’s Central Bank announced on Tuesday that it will halve borrowing limits of lenders for overnight transactions as of Aug. 19.

"In the framework of the tightening steps taken under liquidity management, banks’ borrowing limits at the CBRT Interbank Money Market for overnight transactions will be reduced to half of their current limits effective from 19 August 2020," the Central Bank of the Republic of Turkey (CBRT) said in a statement.

As Turkish lira has been losing ground against other currencies recently, the bank continues taking steps to back it.

Previously, the bank cut to zero liquidity limits offered to primary dealers as part of open market operations which reduced the supply of cheap funding.

The bank will hold the eighth meeting of the Monetary Policy Committee on Thursday to announce its decision on interest rates.

In July, the CBRT held its one-week repo rate unchanged at 8.25%, keeping it steady for the second straight month, following a gradual cut of 375 basis points from 12% in the preceding months.