ISTANBUL: The Turkish lira eased slightly on Wednesday, a day after the central bank cut some interest rates to keep the strong local currency in check and to curb loan growth.
By 0758 GMT, the lira was at 1.7719 against the dollar , compared with 1.7706 late on Tuesday.
The central bank cut its overnight borrowing rate to 4.75 percent from 5 percent and its lending rate to 8.75 percent from 9 percent on Tuesday. It held its one-week repo policy rate at 5.50 percent.
Markets were also awaiting a meeting between ratesetters, economists and investors in Ankara on Wednesday for further clues regarding monetary policy.
"With its decision the central bank defended against an appreciating lira," HSBC strategist Fatih Keresteci said in a research note, adding there was now less of a chance of the lira strengthening to below 1.75 to the dollar.
The lira hit 1.7513, its strongest in ten months last week, fuelled by expectations of a second credit rating upgrade for Turkey.
Turkey is hoping another major ratings agency will lift it to investment grade after Fitch did so last November. A second upgrade would enable Turkey to join benchmark investment grade bond indexes, a status that many funds require before investing.
Moody's said on Tuesday it would discuss Turkey "shifting closer" to investment grade at a teleconference next week, keeping losses in the lira limited. It rates Turkey just below investment grade at Ba1.
A Moody's spokesman declined to comment on market speculation that this meant an upgrade was imminent.
The main Istanbul share index rose 0.31 percent to 85,863.48 points.
Airport operator TAV rose 2.74 percent to 11.25 lira after saying late on Tuesday that authorities would compensate it for any losses if a planned third airport opened in Istanbul while it is still running Ataturk, the country's largest.
TAV has the operating rights to Ataturk until 2021 and the airport could see traffic decline once the third airport opens.
The yield on the two-year benchmark bond stood at 5.91 percent, inching up from 5.90 percent on Tuesday.
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