The Turkish lira weakened on Friday driven by easier liquidity, while bond yields steadied in thin trading despite rising oil prices which created upside risks for Turkey's double-digit inflation ahead of next week's debt auctions. The Turkish central bank increased the total weekly stock funding amount on Friday to 29 billion lira from 27 billion lira and the monthly stock funding to 22 billion lira from 21 billion lira.
However, for the period between March 2-15, the bank decreased the lower limit of total repo funding from 25 billion lira ($14.26 billion), to 18 billion lira. "The fact that the central bank announced a lower limit, doesn't mean that it will absolutely decrease the total funding. The bank can easily provide an amount way above the lower limit. We should wait and see what the central bank will actually do," said Tufan Comert, a strategist at Garanti Securities.
The Turkish Treasury plans to borrow 10 billion lira from domestic markets in March. Next Monday, it will tap the fixed-coupon bond maturing on January 12, 2022 and on Tuesday it will issue the new benchmark bond maturing on March 5, 2014 and it will tap a CPI-indexed bond maturing on February 23, 2022. The main stock index closed virtually unchanged on Friday, rising just 0.29 percent at 60,902.41 points, slightly outperforming a 0.21 percent increase in the MSCI emerging markets index.