The Turkish Central Bank has today raised the interest rate in its lira swap operations by 150 basis points from 11.75% to 13.25% as part of its recent efforts to tighten liquidity in the monetary markets to help protect the Turkish lira.
The Bank had previously increased the swap rate from 10.25% to 11.75% on October 9th, following the increase in its one week repo policy interest rate by 200 basis points to 10.25% on September 24th. With this move, the swap rate, now above the interest rate corridor, had in effect become the Bank’s overnight lending rate.