Turkey’s central bank kept liquidity tight on Tuesday with steps which have pushed the average cost of funding up by 20-25 basis points in the last week against a background of rising inflation and US Federal Reserve rate hike expectations.

The central bank set the level of funding at 9.25 per cent at 12 billion lira (Dh12 billion) for a second day on Tuesday, down from 17 billion on Friday and 22 billion on Thursday. As a result it was set to provide more funding at its late liquidity window at a rate of 11 per cent. The average cost of funding rose to a five-year high of 10.62 per cent on Monday, a rise of 20-25 basis points since the start of last week and 225 basis points since January. (Reuters)