Turkey's central bank to expand repo funding, ease liquidity conditions

Turkey's central bank announced on Thursday that it will increase the funding it provides through one-week repo auctions, adjust banks' borrowing limits and lower collateral haircuts, responding to recent turbulence in financial markets.

The measures are intended to ease liquidity conditions for lenders. By raising the volume of funds available via one-week repo auctions, the central bank can inject more short-term cash into the banking system. Revising borrowing limits gives banks greater flexibility in managing their funding needs, while reducing collateral haircuts allows them to pledge assets more efficiently in exchange for central bank liquidity.

The central bank said it would keep a close watch on liquidity conditions and stands ready to take further steps if required. It did not specify the size of the increased funding or the extent of the changes to borrowing limits and haircuts.

The announcement comes amid market volatility, though the central bank did not elaborate on the specific market developments that prompted the move.