At its 17 December monetary policy meeting, the Central Bank of the Republic of Turkey (CBRT) decided to maintain the one-week repo rate at 4.50% and the overnight lending rate for non-primary dealers at 7.75% (primary dealers: unchanged at 6.75%). The decision was on par with market expectations. The Bank also maintained the overnight borrowing rate at 3.50%. Additionally, the Bank decided to cut both the maximum amount of one-week repo financing from TRY 10 billion to TRY 6 billion and the total amount of funds available to primary dealers from TRY 23 billion to TRY 6.5 billion, in an attempt to anchor the effective interbank market policy rate at around 7.75%. With this additional tightening, the Bank seeks to contain inflationary pressures and to shore up the lira.
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