Standing Facilities are used by the Central Bank in the framework of the monetary policy objectives to effectively regulate the money supply and liquidity. In this framework, the Bank provides Turkish lira (TRY) borrowing and lending facilities for banks and intermediary institutions at specific short-term interest rates.
The general framework of standing facilities is governed by Articles 52, 56 and 40 of the CBRT Law.
As the lender of last resort, the CBRT provides credit facilities for the system to eliminate temporary liquidity shortages that may cause interruptions in the payment system and technical payment problems that may obstruct the efficient functioning of the financial markets.
Standing Facilities Provided by the Central Bank
Turkish Lira Deposit & Lending Facilities
Turkish lira deposit borrowing and lending facilities are the deposit facilities provided by the CBRT for banks that are willing to borrow or lend Turkish lira within their limits and against collaterals at interest rates announced by the CBRT for certain maturities. Thus, banks can borrow or lend Turkish liras over the interest rates announced by the CBRT on the same date.
The Turkish lira deposit borrowing and lending transactions are carried out on the Interbank Money Market established within the CBRT.
Late Liquidity Window Facility
The Late Liquidity Window is the TL borrowing facility that the CBRT -as the lender of last resort- provides for banks to meet their temporary liquidity needs at the end of the day in order to avoid possible problems in the payment systems.
Through the Late Liquidity Window Facility, banks can also lend their excess liquidity at the end of the day.
Intraday Liquidity Facility
The intra-day liquidity facility (IDLF) is a borrowing facility provided by the CBRT for banks with the aim of meeting urgent liquidity needs in the banking system and to remedy any bottlenecks in payment systems during the day.
This facility is available for banks throughout the day against commission, to the extent of their limits and collateral, and on condition that they pay it back at the end of day.
CBRT Interest Rates
Liquidity Support Credit Facility
The Liquidity Support Credit, which is a facility covered by Article 40 of the CBRT Law, is a method used in case of accelerated fund withdrawals due to uncertainty and lack of confidence in the banking system.
Accordingly, the Central Bank provides TL credit for those banks that are subject to uncertainty and lack of confidence but are solvent, at an amount up twice of their equity capital.
The credits will be available against collateral as advance payments to help banks cover the withdrawals. The credits will be paid back in monthly installments and the maximum maturity will be one year.
Repo - Reverse Repo Facility at the Istanbul Stock Exchange
The CBRT provides Turkish lira repo and reverse repo facility for banks and intermediary institutions for certain maturities at interest rates announced for the transactions that are carried out in the Repo Reverse Repo Market operating within Borsa Istanbul.
Primary Dealer Liquidity Facility
The Central Bank provides primary dealers* with Turkish lira overnight borrowing facility with predetermined interest rates and limits via repo transactions.
*Primary dealers are banks and financial institutions selected with respect to certain criteria with the objective of enhancing the effectiveness of primary market operations and facilitating the operations in the secondary markets.