Turkey’s Central Bank refrained from holding a one-week repo auction for the eighth time in a row during the first day of trading on Jan. 23.
The bank skipped the auction – in which local banks borrow Turkish Liras from the Central Bank – for the eight trading day as the bank acted to stem a sharp decline in the value of the local currency against other currencies, especially the U.S. dollar.
A repo auction has not been held since Jan. 12. The bank signaled it would continue skipping the practice until volatility in foreign exchange rates calms down.
The Central Bank’s monetary policy committee decision about raising, holding or lowering interest rates is due on Jan. 24, while Fitch’s rating review is expected on Jan. 27.
It is likely the bank will increase its upper limit of interest rates corridor by at least 25 basis points, according to a panel of economists surveyed by Anadolu Agency last week.
Turkey’s currency has lost around a quarter of its value since the middle of last year.
The lira has fallen as much as 10 percent against the dollar since the start of 2017, making it the world’s worst performing...Read more...