Macro and Politics

* The Treasury borrowed TL79bn from the domestic markets (including non-competitive sales) through yesterday’s 4y TLREF-indexed and 9y fixed coupon bond auctions and finalized its domestic borrowing program for June. For the TLREF auction, the bid – to -cover ratio was weak at 1.62x and the term rate was 12.47%. Besides, for the fixed coupon auction, the bid – to – cover ratio stood at 4.21x, indicating robust demand, and the average cost of borrowing rate came in at 34.26%. With yesterday’s double auctions, the Treasury has completed its domestic borrowing program for June, bringing total domestic borrowing since the beginning of the month to TL237.5bn, which is slightly below the initial projection of TL279bn.The Treasury will release its next three-month (July – September 25’) domestic borrowing strategy on June 30^th @ 17:30 local time. According to the previous program (June – August 25’), The Treasury has a hefty domestic redemption of TL316bn in July, while in return plans to borrow TL349.4bn throughout the month.