Turkey's benchmark bond yield rose and stocks fell after fourth quarter growth far outstripped forecasts and the trade deficit surged, raising doubts over the central bank's efforts to slow demand and expectations further action may follow. The yield on the November 7, 2012 benchmark bond rose to 9.01 percent from 8.96 percent before the data was announced.
The main Istanbul share index reversed gains after the data although it was back up 0.1 percent to 64,601.51 points by 0731 GMT, underperforming the emerging markets benchmark index which rose 0.7 percent. Turkey's gross domestic product (GDP) grew 9.2 percent year-on-year in the final quarter of 2010, bringing full year growth to 8.9 percent.
A Reuters poll showed the economy was expected to have grown 7.3 percent in the fourth quarter and 8.45 percent in the year as a whole. Turkey's trade deficit surged 110.9 percent year-on-year in February to $7.407 billion, the Turkish Statistics Institute said, sharply exceeding a forecast of $6.8 billion deficit in a Reuters poll.
"Better-than-expected figures may in fact exacerbate concerns over potential additional measures that the central bank may implement," Seker Securities said in a note. Exports rose 22 percent to $10.11 billion and imports rose 48.7 percent to $17.52 billion, the data showed.
Central Bank Governor Durmus Yilmaz appeared to call a halt to monetary tightening via reserve requirement hikes last week, saying the latest measures were "sufficient" and that the government or Treasury should take further steps if needed. The central bank sharply increased required reserve ratios on banks' lira deposits last week, a move which took markets by surprise.