10.06.2025 14:41
The Central Bank of the Republic of Turkey opened a repo auction with a quantity method of 100 billion TL, maturing on June 17. The record bid of 648 billion TL received for the auction drew attention. According to experts, this move is interpreted as a signal for interest rate cuts. President Erdoğan also stated recently, "In any case, we cannot legitimize an economic system based on interest and interest rates."
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The Central Bank of the Republic of Turkey (CBRT) opened a repo auction today for 100 billion TL with a maturity of June 17, 2025, using the quantity method. The demand for the auction reached 648 billion 945 million TL. The Central Bank funded the market with 99 billion 999 million 999 thousand 883 TL within the scope of this auction.
While the simple interest rates remained stable at 46 percent, the compound interest rates were realized at 58.09 percent, including the lowest, average, and highest rates. This step was interpreted as a signal of easing in monetary policy.
SHARP RISE IN BANKING SHARES
Following the auction, a strong rise was observed in banking shares on Borsa Istanbul. The banking index rose above 4 percent during the day. The banking index, which gained 1.28 percent at the opening, increased its momentum towards the close, rising to 13,604 points. Thus, the index, which closed the previous week at 13,050 points, achieved a weekly gain of over 4 percent.
IS IT A SIGNAL FOR INTEREST RATE CUT?
Experts, considering the liquidity gap of approximately 500 billion TL in the market, indicate that the Central Bank's decision to keep the repo interest rate at 46 percent could be a signal for a reduction in the policy interest rate in the coming days. Currently, the overnight lending rate is at 49 percent. If this practice continues for a few more days, the likelihood of a gradual decrease in the policy interest rate may increase. Along with this expectation, not only banking shares but also a positive trend was observed in the overall BIST 100 index.
ERDOĞAN: I WILL CONTINUE TO SPEAK LOUDLY
In his speech at the 2nd Istanbul World Islamic Economy Summit held in Istanbul, President Erdoğan began his remarks by saying, "I am a brother who has steadfastly fought against the interest-based economic system." He stated, "I have frequently expressed that we cannot legitimize interest and an interest-based economic system under any circumstances. In addition, I pointed out the problems and difficulties that interest causes in production, trade, and social life in the economy."
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