TURKEY: Drop in Banking Stocks May Have Been Catalyst Behind CBRT Action

Repo reference rates softened slightly overall on Friday Feb 14, the most recent session for which we have data owing to Monday's holiday.

• While SOFR was unchanged at 4.33%, BGCR and TGCR saw 1bp dips to 4.31% each.
• Secured rates are seen picking up moderately this week, particularly today as it marks the month's Treasury refunding auctions settlement.
• Though of course, the main pressure is expected to come at end-month as usual, especially given unusually large auction settlements at the end of the month.
• Effective Fed funds as usual was unchanged at 4.33%.

REPO REFERENCE RATES (rate, change from prev. day, volume):
* Secured Overnight Financing Rate (SOFR): 4.33%, no change, $2319B
* Broad General Collateral Rate (BGCR): 4.31%, -0.01%, $932B
* Tri-Party General Collateral Rate (TGCR): 4.31%, -0.01%, $913B

New York Fed EFFR for prior session (rate, chg from prev day):
* Daily Effective Fed Funds Rate: 4.33%, no change, volume:  $91B
* Daily Overnight Bank Funding Rate: 4.33%, no change, volume:  $268B
 

• Q: The market is expecting a structural portfolio announcement. Can you give an update on the timeline?
  A: We will reassess our position in 2026. Currently structural liquidity needs are fulfilled by the legacy portfolios, so there is no need to intervene now. The time will come.

• Q: If you needed to ease the central bank stance further and quickly, would you cut rates more or stop QT? How do you weigh these two decisions?
  A: Let me give my personal view: If something happens, it will be silly not to use all the instruments we have. I don’t have in mind the exact reaction function right now. When we make projections, we study the reaction of the economy to different policy paths. Regarding transmission, things like TPI are also part of the toolkit.

• Not seen any standout flows to explain that sudden 14 points drop in the Emini on the cash open.
• There was no notable program orders, and the only order that was seen going through was a 1k seller in NQH5 (Nasdaq).