For the first time in 18 years: CBRT opens tender for liquidity bills

The Central Bank of the Republic of Türkiye (CBRT) has opened a 30-day liquidity bill tender worth 50 billion liras to reduce excess TL liquidity in the market. The Central Bank last resorted to this practice in 2007.

A FIRST IN 18 YEARS

In a statement on Friday, the CBRT announced that it would issue liquidity bills with maturities of up to 91 days. The bank last used this tool in July 2007 to withdraw excess TL liquidity that had accumulated in the market due to foreign exchange purchases.

TENDER DETAILS

Bids for the 50 billion lira liquidity bill with ISIN code TRM240425T14 can be submitted between 11:00 and 11:45 on March 25, 2025 (tomorrow), with a value date of the same day. Banks and brokerage firms that have signed the Open Market Operations Framework Agreement with the Central Bank will be eligible to participate in the tenders.

WHAT IS A LIQUIDITY BILL?

A liquidity bill is a short-term debt instrument used by central banks to withdraw excess money (liquidity) from the market. Central banks, such as the Central Bank of the Republic of Türkiye (CBRT), issue these bills to temporarily absorb excess liquidity when there is more TL in circulation than necessary.

Features of Liquidity Bills:

Short-Term: They are generally issued with maturities ranging from 1 to 3 months.

Interest Income: Banks and financial institutions earn interest income by investing in these bills.

Market Balance: The central bank uses them to control excess liquidity created by foreign exchange transactions or monetary policy.

News Source: 12punto