Central Bank of the Republic of Turkey's repo auctions boost demand for short-term bonds
CBRT's resumption of weekly repo auctions led to a decline in short-term benchmark bond yields and strengthened interest in the short-term side in the markets.
The Central Bank of the Republic of Turkey's reopening of the 1-week repo auctions, which it had paused, pulled down short-term benchmark bond yields and significantly increased the demand for short-term bonds in the market.
Return of Repo Auctions and Their Impact on Yields
The Central Bank of the Republic of Turkey's reopening of 1-week repo auctions, which had been suspended since March 1, had a positive impact on short-term benchmark bond yields. Following this step, 2-year and 5-year benchmark bond yields recorded a decline of nearly 1 percentage point.
Below 40 Percent Development in Short-Term Bond Yields
In yesterday's transactions, the 2-year benchmark bond yield fell below 40 percent for the first time since July 3. Meanwhile, there was no significant change in the 10-year benchmark bond yield, and the reaction to this maturity remained highly limited.
Changes in Money Market and Deposit Rates
While excess liquidity formed in the market, the market interest rate TLREF fell to 36.93 percent for the first time since March 2. Experts expect this step to be quickly reflected in TL deposit rates, while they predict that its impact on loan rates will take up to a week.
Treasury's August Borrowing Data
The Treasury, which announced its domestic borrowing target for August as 536.7 billion liras, exceeded this figure in actual realizations. Excluding sales to the public, the Treasury borrowed 584.5 billion liras in August, exceeding its target and strengthening its coffers ahead of September and October.