The Central Bank of the Republic of Turkey (CBRT) announced that it has opened a tender for a one-month liquidity bill worth 50 billion TL. So, what is a liquidity bill? What does a liquidity bill mean?
WHAT IS A LIQUIDITY BILL?
Liquidity bills are a monetary policy instrument with the characteristics of a security, issued by the CBRT to regulate liquidity in the market and increase the effectiveness of open market operations. The CBRT issues these bills on its own behalf and account, with maturities not exceeding 91 days, on a discounted basis. The bills are issued as a single collective security and can be bought and sold in the secondary market.
Liquidity bills, which can be traded in the secondary market, may be redeemed early by the CBRT when deemed necessary.
Since these bills are issued solely for the purpose of increasing the effectiveness of open market operations, they should not be considered as an alternative investment instrument.
News Source: 12punto
