Macro and Politics

* The Treasury and Finance Ministry tapped the domestic markets to the tune of TL190.3bn, including non-competitive sales of TL105.7bn, through yesterday’s auctions of a 4y TLREF-indexed bond and a 5y fixed-coupon bond. At the new issuance of the 4y TLREF-indexed bond maturing on July 3, 2030, the bid-to-cover ratio stood at 1.93x, while the periodic interest rate came in at 20.45%. Meanwhile, the reissue of the 5y fixed-coupon bond recorded a bid-to-cover ratio of 1.52x, with the average compounded yield realized at 37.97%. Following last week’s direct sales of a 2y gold-denominated bond and a 2y gold-denominated lease certificate, the Treasury has so far raised a total of TL238.5bn under its July domestic borrowing program. According to the Treasury’s July–September 2026 domestic borrowing strategy, it plans to borrow a total of TL606.8bn in July against redemptions of TL638.7bn, implying a rollover ratio of 95%. Following yesterday’s auctions, the Treasury will hold the direct sale of a 2y lease certificate on July 20. This will be followed on July 21 by auctions of a 7m zero-coupon bond and a 2y fixed-coupon bond, as well as the direct sales of a 2y USD-denominated bond and a 2y USD-denominated lease certificate, thereby completing its July domestic borrowing program.