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Turkish lira policy rate shift revives carry appeal after CBRT change

CBRT restarted one-week repo operations, moving funding back to the 37% policy rate from the 40% overnight lending rate after an earlier effective 300 basis point hike.

Reported · Written up by our desk · Central Banks

ING’s Chris Turner said the Central Bank of the Republic of Türkiye restarted one-week repo operations, shifting funding back to the 37% policy rate from the 40% overnight lending rate after a prior effective 300 basis point hike, according to FXStreet.

Turner interpreted the move as a sign of policymaker confidence, pointing to lower short-dated implied yields that could encourage investors to maintain Turkish lira carry positions.

The note also framed broader FX market conditions, citing uncertainty around potential US economic sanctions on Iran and the impact of US dollar moves on other pairs, while gold stayed near a three-month high level close to $4,650 in the European session.

Separate from the Turkish lira discussion, FXStreet referenced US Treasury actions that at least doubled liquidity support buyback operation sizes in the 10-year to 20-year and 20-year to 30-year sectors, with the changes effective September 9 through November 4.

Latest closeGold $4,432.00 ▲1.6%

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