Türkiye's central bank resumed one-week repo auctions Monday after a nearly six-month suspension, as part of its Turkish lira liquidity management framework.
The Central Bank of the Republic of Türkiye (CBRT) announced Friday that it had decided to restart one-week repo auctions, which had been suspended on March 1 after the outbreak of the Iran war.
The CBRT offered TL1 billion ($21 million) in one-week funding at 37% Monday. In its last auction, the interest rate stood at 40.06%.
What does it mean?
One-week repo auctions are among the central bank's main tools for managing liquidity in the banking system and meeting banks' lira funding needs.
Under repo transactions, banks provide eligible securities as collateral to obtain Turkish lira funding from the central bank for a specified period, in this case one week.
Analysts foresaw normalization
Analysts said last month the bank was likely to pursue a gradual normalization of monetary policy in the remainder of the year before considering interest rate cuts.
The bank kept its benchmark one-week repo rate at 37% last month, leaving borrowing costs unchanged for a fourth consecutive meeting.
Policymakers thus maintained a cautious stance amid heightened geopolitical uncertainty and lingering inflation risks amid the Middle East conflict.
Economists had said the central bank would likely first unwind its temporary monetary tightening by shifting funding back toward one-week repo auctions before lowering the benchmark policy rate, provided global conditions improve.
Since the conflict started, the bank has halted an easing cycle that began in late 2024 and taken other liquidity steps.
FAST transfer limit to triple
In a separate announcement Monday, the CBRT also said it would raise transaction limits on the FAST instant payment system from Wednesday.
The maximum amount for money transfers and payments made through the "Request to Pay" service will increase threefold to TL 300,000 from TL 100,000.
The CBRT said the change reflected growing user demand for FAST and the evolving needs of the payments ecosystem.
For dynamic verified merchant payments made using FAST-TR QR codes, the transaction limit will also rise to TL 300,000 from TL 250,000.
FAST, which was launched on Jan. 8, 2021, enables instant payments around the clock and has increasingly become an alternative to cash and card payments for retail transactions.