Oct. 20 (Bloomberg) -- Turkey’s central bank has several options, including raising the overnight borrowing rate from 5 percent, to help halt a slump in the lira.
The central bank is likely to keep the benchmark one-week repo rate steady at 5.75 percent at a meeting of its Monetary Policy Committee today, Tevfik Aksoy, Morgan Stanley’s economist for the region, said in an e-mailed report today.
Meanwhile, the bank in Ankara could also lower the size of funding it provides to the system, which would “‘de facto mean tightening and would encourage banks to stay away from unneccesary foreign currency-cautious positions,’’ Aksoy said.
Central bank governor Erdem Basci may also cut reserve requirements on foreign exchange deposits by 50-100 basis points, releasing ‘‘substantial foreign exchange liquidity to the banking system,’’ he said.
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