ISTANBUL: Turkey's lira firmed up and shares eked out gains on Monday, supported by a fall in the price of oil that helps keep down the country's energy import bill.
Investors were turning their attention to the central bank's monthly rate-setting meeting on Thursday, at which economists forecast no change in interest rates in view of high inflation.
The lira was firmer at 2.2273 by 1130 GMT from 2.2350 against the dollar late on Friday, while the 10-year government bond yield dropped to 8.48 percent from 8.57 percent.
The Istanbul stock index was up 0.14 percent at 81,322.69 points, outperforming the broader MSCI emerging markets index, which was down 0.36 percent.
Lower oil prices supported the market as the country runs a huge current account deficit driven by its energy import bill. Brent crude futures dropped to $79 a barrel after news that Japan's economy was in recession.
The market showed little reaction to October budget data, which showed a deficit of 3 billion lira ($1.34 billion) and a primary surplus of 3.99 billion lira, the finance minister said on Monday.
Separately Turkey's unemployment rate rose to 10.1 percent in the three months from July to September, the Turkish Statistics Institute said on Monday.
Fifteen out of 16 economists forecast the central bank will keep rates on hold this week, with just one expecting a 50 basis-point rate cut in the one-week repo rate.
Turkey is struggling to control inflation which is well above the central bank's year-end target of 5 percent, while economic growth is faltering. A central bank survey last week showed year-end inflation expectations had risen to 9.22 percent from 9.16 percent a month earlier.
"Although the core inflation indicators showed improvement in October and the drop in international commodity prices will support disinflation going forward, the inflation rate and expectations still remain far away from the inflation target," said Finansbank economist Deniz Cicek in a note.
"The inflation outlook currently does not justify any rate cut."
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