Turkish Central Bank cuts policy rate full point

Addressing concerns of the fallout from coronavirus, in an extraordinary meeting on March 17 the Turkish Central Bank Monetary Policy Committee (MPC) cut its policy rate from 10.75 to 9.75.

The bank was set to meet on March 19, but with fears of the virus mounting, and cases climbing worldwide, the meeting was moved up.

In a separate statement, the Central Bank announced that it will make moves to cushion the virus's likely economic and financial fallout.

It will provide banks with as much liquidity as they need through intraday and overnight standing facilities, it said.

Liquidity may be injected into the market through repo auctions with maturities up to 91 days when needed, along with one-week repo auctions, the bank said.

These measures aim to boost predictability by providing banks with flexibility in Turkish lira and foreign exchange liquidity management, offering targeted additional liquidity facilities to banks to secure uninterrupted credit flow to the corporate sector.

Central banks such as U.S. Federal Reserve and the Bank of England have also taken urgent measures to contain fallout from coronavirus.

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