Macro and Politics

*The Treasury will hold 2y and 5y fixed coupon bond auctions today. The Treasury borrowed TL67bn (including non-competitive sales) from the domestic markets via yesterday’s 9m zero-coupon bond auction. The Treasury also conducted a direct sale of 2-year TLREFK (Turkish Lira Overnight Participation Reference Rate) indexed lease certificates yesterday, marking the first-ever issuance of such an instrument. The auction resulted in a notably large placement of TL80.1bn. As a result, the Treasury tapped domestic markets for a total of TL147.1bn in total yesterday. According to its three-month (Sept – Nov 2025) domestic borrowing program, the Treasury faces a domestic redemption of TL255.8bn in September, while in return it plans to borrow TL346n in total throughout the month, indicating a roll-over ratio of 135%. After this week’s auctions, the Treasury will hold 5y CPI-linked and 10y fixed coupon bond auctions on September 16 and finalize its domestic borrowing program for the month. The new 10-year bond maturing September 5, 2035 will become the benchmark issue following its September 16 auction, replacing the current 27.09.2034 maturity in the secondary market.