Turkish assets inch up, liquidity eases
January 29, 2012
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The Turkish lira edged up on Friday as local companies chose to delay their dollar buying and bond yields declined on continued demand following the US Federal Reserve rate outlook and after the Turkish central bank provided more liquidity to the markets.
Against a euro-dollar currency basket, the lira stood at 2.0623 after rising to as much as 2.0687 on Thursday and compared with 2.0701 in Thursday's late trade.The lira gained despite the central bank injecting 9 billion lira ($5.02 billion) into the market through two repo auctions on Friday, higher than the 7 billion lira it drained from the markets. Central Bank Governor Erdem Basci said on Thursday the bank could change its policy stance after the US Federal Reserve statement to keep rates low for an extended period, depending on the duration of abundant and cheap liquidity.
The lira has recovered around 5 percent versus the dollar this year, as the central bank sold $2.9 billion in direct interventions and it tightened lira liquidity sharply since earlier this month.Turkey's current account deficit is seen as the biggest weakness of the economy and is expected to reach 10 percent of the gross domestic product for 2011, analysts say.
The yield on the benchmark bond maturing on December 4, 2013 closed at 9.60 percent, after previously declining 75 basis points to close at 9.62 percent.
Since the end of 2011, the benchmark yield has declined around 140 basis points.On Friday, the central bank injected 5 billion lira ($2.79 billion) in a one-month repo auction at a rate of 10.62 percent, the lowest since December 30.
The main Istanbul share index closed 0.7 percent up at 57,356.72 points, outperforming the MSCI emerging markets index, which was up 0.23 percent.
Copyright Reuters, 2012
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