Where were you before?

Don’t we have the right to ask the Central Bank “Where were you before?” If you had raised the interest rate at the July 24 meeting when the dollar rate was at 4.75, you would not have caused the currency to climb this high. Then you would not have had to increase the rate now.

The Central Bank Monetary Policy Committee increased the week- ly repo auction interest rate from 17.75 percent to 24 percent, a 625 basis points increase, in Thursday’s meeting. Thus, the overnight interest rate and late liquidity window interest rate, which are related to the interest of the repo sale, also changed. The Central Bank’s overnight borrowing interest rate rose to 22.5 percent, the overnight lending rate to 25.5 percent, and late liquidity window borrowing rate to 27 percent. Initially, the Central Bank’s increase - above expectations – pushed the dollar rate below 6.10. Then it began to rise again. At the time these lines were written, the dollar was at 6.20 and the euro was at 7.22.

Actual increase is 4.75 points

Although the interest rate was increased by more than 600 basis points, the actual increase will ac- tually be 475. The Central Bank has been funding through the weekly repurchase auction - that is, from the 19.25 percent through overnight funding and not the 17.75 percent - for nearly a month. In the statement made by the Bank, funding will be done on a weekly basis from from September 14. Therefore, the actual interest rate increased by 475 basis points to 24 percent from 19.25 percent.