Turkish central bank tightens monetary policy by the back door

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CBRT

The Central Bank of the Republic of Turkey tightened monetary policy today (May 9) as the Turkish lira continued to weaken.

The CBRT said it was suspending one-week repo auctions indefinitely. It said it was “considering the developments in financial markets”. Since May 5, the lira has lost 4.4% of its value against the US dollar, hampering authorities’ efforts to tame inflation.

The measure prevents banks from borrowing at the CBRT’s lowest rate of 24%, and forces them to borrow instead at

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