CBRT Resumes Repo Auctions: Liquidity Engine Reignited

The Central Bank of the Republic of Turkey (CBRT) announced in a press release dated August 23, 2026 that it will end the one‑week pause on one‑week repo auctions that began on March 1, 2026, marking a decisive move to restore liquidity balance.

Restarting Repo Auctions and Market Mechanics

Behind the decision lies heightened volatility in financial markets and tightening TL liquidity. The week‑long suspension pushed short‑term rates up and raised banks' funding costs.

A Strategic Pivot in Liquidity Management

■Pause duration: 1 week

■Auction tenor: 7 days

■Target: Balance TL excess liquidity by 0.5%

■Anticipated impact: Reduce short‑term borrowing costs for banks by 10%

Immediate Market Reactions

Following the restart, the BIST 100 index climbed +0.3%, while the USD/TRY exchange rate slipped 0.2%. Banks reported participation rates in the repo auction 15% above their recent average.

Potential Ripple Effects on Credit Flow

■SME loan growth projected at 2%

■Commercial credit volume may rise by 3.5%

■If macro‑prudent measures stay tight, banks' risk premiums could increase by 0.25%

Markets view this move as a crucial step to stabilise TL liquidity and ease short‑term rate pressures. The resumption of repo auctions should lower banks' funding costs, providing some relief to the ongoing squeeze on SME credit. Yet, the continuation of macro‑prudent safeguards will likely keep long‑term credit expansion in check. In this context, the CBRT’s flexible liquidity stance sends a positive signal for both monetary‑policy transparency and financial‑system stability.