Understanding Liquidity Deeds: Latest Updates on the Economy
The Central Bank of the Republic of Turkey (CBRT) has introduced liquidity bills as a material policy instrument to regulate liquidity in the market and enhance the effectiveness of open market transactions. These securities are issued by the CBRT in maturities not exceeding 91 days, under their own name and account.
Liquidity bills are issued as discount promissory notes, consolidated into a single document with a valuable form, making them easily tradable in the secondary market. This allows investors to buy and sell the bonds as needed.
Moreover, the liquidity bonds can also be redeemed early by the Central Bank if and when necessary. It is important to note that these bonds should not be viewed as an alternative investment instrument, but rather as a tool to increase the efficiency of open market transactions.
In conclusion, liquidity bills play a crucial role in maintaining liquidity in the market and improving the functionality of open market operations. Investors can benefit from their tradability in the secondary market, with the Central Bank having the flexibility to redeem them early if required.
