Turkey’s Central Bank raises Turkish lira swap rate

ANKARA- Anadolu Agency

Turkey's Central Bank increased the Turkish lira interest rate for swap transactions by 150 basis points on Oct. 9. 

The rate, the bank uses in weekly currency swaps, rose to 11.75% from 10.25%, according to information obtained by an Anadolu Agency reporter.

The bank's move came after that the US dollar/Turkish lira exchange rate hit the historical high of 7.955. The rate dropped to 7.91 after the move and it was around 7.93 currently.

The Central Bank has also raised its policy rate to 10.25% from 8.25% in September. The rate dropped 8.25% from 24% gradually since last year.

Cem Tozge, a strategist at the investment firm Ata Yatirim, said the move can be signal for a potential increase in the bank's Weighted Average Funding Cost in the coming days.

The bank may limit interbank transactions and reduce the amount of the overnight funding, he added.