Macro and Politics

* The Treasury borrowed a total of TL95.7bn from the domestic market (including non-competitive sales at an amount of TL47.3) through yesterday’s auctions for a 6m G-bond and a 5y fixed coupon bond. The bid-to-cover ratio in the 6m G-bond auction stood at 2.73x, pointing to strong demand, while the average compound yield was 41.13%. In the 5y fixed coupon bond auction, the bid-to-cover ratio remained relatively low at 2.01x, while the average compound yield stood at 39.29%. Accordingly, the Treasury’s total domestic borrowing so far this month reached TL234.3bn. According to the Treasury's 3-month domestic borrowing strategy for the August–October 2026 period, the Treasury plans to borrow a total of TL536.7bn from the domestic market in August against redemptions of TL596.3bn, implying a projected rollover ratio of 90%. Following yesterday’s double auctions, the Treasury will continue its August borrowing program with auctions for a 3y FRN and a 4y TLREF-indexed bond on August 17, a 4y CPI-linked bond and a 9y fixed coupon bond on August 18, and direct sales of a 1y USD-denominated bond and a 1y USD-denominated lease certificate on August 20, thereby completing its domestic borrowing program for the month.