ISTANBUL: The Turkish lira eased slightly and bond yields were little changed on Tuesday as investors awaited new central bank inflation forecasts.
By 0806 GMT, the lira eased to 1.7975 against the dollar from 1.7944 late on Monday. Against its euro-dollar basket it stood flat at 2.0695.
The yield on the two-year benchmark bond was 7.17 percent, just below Monday's close of 7.18 percent.
Earlier on Monday, the yield had hit 7.16 percent, its lowest level since Sept. 14, as rising hopes of a credit rating upgrade for Turkey and lower borrowing needs for the Treasury after recent tax rises support demand.
Turkey recently announced revenue-boosting measures, including tax hikes on cars, fuel and alcohol to slow a deterioration in its budget deficit.
"Investors will monitor the central bank's inflation report. After the recent tax hikes, they wonder how much the bank will revise up its year-end inflation forecast and its anticipation for the upcoming period," said HSBC strategist Fatih Keresteci.
The central bank is due to release its quarterly inflation report on Wednesday. It cut its year-end inflation forecast to 6.2 percent in July from 6.5 percent.
Annual consumer inflation was above 9 percent in September, down from 11 percent in April but still well above the central bank's year-end target of 5 percent.
Fitch is due to hold a conference on Turkey's credit outlook in Istanbul on Nov. 8. The agency said this month the country was making good progress in dealing with the financial crisis and that it would look again soon at its rating.
Fitch rates Turkey's creditworthiness one notch below investment grade at BB+ with a stable outlook.
The main share index was 0.06 percent down at 71,175 points, outperforming a 0.46 percent fall in the emerging markets index.
Turkish markets will be closed from midday on Wednesday until Oct. 30 due to the Eid Al-Adha festival and the Republic Day holiday.
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