ISTANBUL: Turkish bond yields fell on Thursday on prospects that the central bank would ease its policy stance further at its next meeting in December.
The lira strengthened slightly in thin trade.
With growth slowing, Turkey's central bank cut its overnight lending rate on Tuesday for the third consecutive month, and has indicated it could gradually begin to cut its main policy rate, the one-week repo rate, and overnight borrowing rate.
By 0908 GMT, the lira stood at 1.8000 to the dollar from 1.8036 late on Wednesday. Against its euro-dollar basket, it was flat at 2.0574.
The yield on the two-year benchmark bond fell to 6.22 percent from Wednesday's close of 6.28 percent.
"The yields will continue to trade flat for a while," said Burak Maldar, vice president at Halk Invest.
"There's low chance of a sell-off as it seems almost certain the central bank will cut its rates at its December meeting," Maldar said, adding that cuts to either the policy rate or the borrowing rate would affect the bonds positively.
"We can see some profit-taking while the global risk sentiment deteriorates, but this would be an opportunity to buy bonds. I think the (two-year benchmark) yield could dip as low as to 6 percent."
The yield hit a record low of 6.19 percent on Tuesday on speculation the central bank was going to cut its main policy rate.
Istanbul's main share index was up 0.34 percent at 70,701 points, matching a rise of 0.479 percent in the global emerging markets index.
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