Turkey's lira firmed on Friday after its central bank governor said the volume of foreign currency sales at auction could be increased further if needed, while bond yields edged up and shares rebounded in line with European markets. After Governor Erdem Basci's statement, the lira strengthened to 1.7760 versus the dollar from 1.7850 earlier.
The Turkish currency, which so far this year has lost around 12 percent against the greenback, closed at 1.7790 on Friday versus a previous closing of 1.7935. The central bank launched its first forex sale to support the lira in August 5, since when it has limited auction volumes to a range of $50-70 million. The volume in Friday's auction was raised to $100 million.
The average compound yield on the benchmark May 15, 2013 bond, which dipped below 8 percent yesterday, its lowest level since February, rose to 8.13 percent in Monday-dated trades after closing at 8.12 percent on Thursday. The main Istanbul share index closed up 0.33 percent to 52,188.65 points on Friday, outperforming the MSCI emerging markets index, which rose 0.01 percent. Turkish equities recorded a weekly drop of 7.2 percent, extending the year-to-date decline to nearly 21 percent.
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