This is a good thread on the why TCMB's most communicated measure of the policy stance (wacf and total funding) may have been so misleading in recent days. I would disagree however with the conclusion that TCMB's latest actsions represent a return to orthodoxy. https://twitter.com/NickStadtmiller/status/1310677877680205832

First off, I'm not sure yesterday's decision to not open the 1w repos was part of last week's plan, rather I would see this as a knee-jerk reaction to recent geopolitical tensions in the area.

I've repeatedly aske TCMB why the went with 1m Dutch auctions rather than the weekly quantity actions last month, why they didn't instead lean on existing ONL and LLW, as they have in the past, which even though it's IMO unnecessarily involved, we've become used to it. No answer.

This then adds another layer of complexity to an already overly wide and cumbersome set of policy tools that is imo too prone to fiddling and trickery, while lacking in clarity and durability.

A return to orthodoxy would've been an earlier hike (possibly larger but not necessarily) and a shift to full funding thru the one-week repo. I can only think of "good" political reasons why this didn't happen, not good macro reasons.

Even in new funding, TCMB is leaning on the ONL, and soon likely the LLW, which is not an orthodox form of funding. But moreover, it signals both a temporary nature of the flow policy stance, and in extension a commitment problem.

Yes, there is the "old" problem of the TCMB's political dependence and overly dovish policy etc, but the last week shows something else. This is even more opacity, more trickery, and even worse communication. Turkey needs a Central Bank of Turkey, not a Central Bank of Trickery.