ANKARA (Reuters) - The average cost of funding will be at 24 percent from Friday onwards after Turkey’s central bank resumed its one-week repo auctions following a hefty 625 basis point rate hike a day earlier, bankers said.
The central bank, which had not opened a repo auction in a month as the lira plunged, had been funding through its overnight lending rate of 19.25 percent in recent weeks. Friday’s move will therefore mean a 475 basis points rate hike to the funding rate, bankers said.
Following a one-week transition process announced by the central bank on Thursday, the overnight borrowing rate will be at 22.5 percent, overnight lending rate at 25.5 percent, and the late liquidity window at 27 percent.
Reporting by Nevzat Devranoglu; Writing by Tuvan Gumrukcu; Editing by David Dolan