Open Market Operations

Open Market Operations

Central banks make sure that the short-term interest rates materialize at the set rates by conducting open market operations, and they regulate liquidity in the financial markets. The general framework of open market operations is specified in Articles 52 and 56 of the Law on the Central Bank of Turkey.

The CBRT, with an aim to effectively regulate the money supply and liquidity in the economy within the framework of monetary policy targets, may conduct open market operations such as outright purchase and sale of securities against Turkish Lira, repurchase and reverse repurchase, lending and borrowing of securities and lending and borrowing of Turkish Lira deposits, and act as an intermediary in these operations.

Open market operations to be carried out by the CBRT and their procedures and conditions as well as the instruments bearing high liquidity and low risk levels that are subject to open market operations are determined by the Bank. With open market operations, the CBRT may issue liquidity bills with a maximum maturity of 91 days that are tradable in the secondary markets on its own behalf and for its own account. The agreement period of repurchase, reverse repurchase and Turkish Lira deposit transactions of the Bank shall not exceed 91 days. The CBRT is authorized to designate establishments and institutions subject to the operations among banks and intermediary institutions specified in Law No.2499 on Capital Markets, by taking the nature of the operation into account. Open market operations are conducted only for monetary policy purposes and cannot be used to provide credit to the Treasury, to public establishments and institutions, or to other establishments and institutions. The CBRT does not purchase debt instruments issued by the Treasury and public establishments and institutions in the primary market.

Related links

Instructions for Turkish Lira Transactions
Monetary and Exchange Rate Policy for 2013
Decisions regarding Markets

CENTRAL BANK OF THE REPUBLIC OF TURKEY Head Office Anafartalar Mah. İstiklal Cad. No:10 06050 Ulus Altındağ Ankara Phone : (+90 312) 507 50 00 | Fax : (+90 312) 507 56 40