[ad_1]
The presentation by the President of the Central Bank of the Republic of Turkey, Murat Uysal, of the latest inflation report in 2020 “to focus” on driving the increase in the cost of financing defined as an index of the weighted average interest rate.
Consequently, as of 28 October, the weighted average cost of the loan was 13.08%. Therefore, the highest level was recorded in the weighted average cost of financing from 12 December 2019. On this date, the Central Bank cut the reference rate by 200 basis points, bringing it to 12%.
CBRT Governor Murat Uysal highlighted the weighted average cost of financing as an indicator of tightening in the latest presentation of the inflation report. Uysal said: “The step taken into the late liquidity window does not mean a definitive departure from simplification. The weighted average funding level is an important indicator showing the rigidity of the CBRT. The weighted average cost of funding and the overnight interest that should be focus on this period, “he said.
The weighted average cost of the loan is calculated by taking the average of the financing costs that the Central Bank carries out through various channels. Although the central bank kept the reference rate constant during its October 2020 meeting, it changed the monetary policy framework and determined the difference between the central bank lending rate to be applied in the operations of the delayed liquidity window and the 300 basis points overnight lending rate.
[ad_2]
Source link
