The Turkish lira firmed on Friday due to foreign buying after the central bank's move this week to raise reserve requirement ratios on banks' lira deposits, while stocks rose and bonds yields fell slightly.
The lira closed at 1.5490 to the dollar, strengthening from a previous close of 1.5520. The currency had traded at 1.5620 on Wednesday morning, just before the bank unexpectedly announced a steep increases in RRRs. -- Lira firm, bond yields slightly lower Turkey's benchmark bond yield has fallen back since hitting a 10-month high above 9 percent on Thursday in reaction to the RRR increases meant to drain liquidity and slow credit growth.
The yield on the November 7, 2012 benchmark bond closed slightly lower at 8.93 percent, compared with 8.94 percent on Thursday. Turkey's economy grew between 8 to 9 percent in 2010, Central Bank Governor Durmus Yilmaz said on Friday. Turkey is due to release GDP data on March 31. A Reuters poll of 19 analysts showed growth is expected to be 7.3 percent in the fourth quarter of 2010, and 8.45 percent for the full year.
The poll also forecast growth of 4.8 percent for 2011. The main Istanbul share index closed down 0.17 percent to 64,247.00 points, underperforming a 0.93 percent gain on the emerging market benchmark. Shares in Turkish Airlines fell 2.3 percent to 4.25 lira, weighed down by disappointing financial results posted on Wednesday. Privatisation work has yet to start for the government's sale of part of its 49.1 percent stake in the carrier, and the sale is now likely to happen next year, sources close to the deal told Reuters.