June 17 (Bloomberg) -- The lira strengthened, snapping a five-day drop, after French President Nicolas Sarkozy said he and German Chancellor Angela Merkel reached a “breakthrough” on a plan to address Greece’s debt crisis.
The lira gained 0.8 percent to 1.5969 per dollar at 5:51 p.m. in Istanbul, trimming the week’s depreciation to 1.3 percent. Yields on benchmark two-year bonds decreased five basis points to 9.04 percent, according to data compiled by Bloomberg. The yields fell for the first in four days, the TEB Local Benchmark Bond Index showed.
“The mood has improved here after the Greek news,” Eren Yardimci, a currency trader at Akbank TAS in Istanbul, said by telephone. “This spurred dollar sales and investors closed short lira positions.”
The lira had the longest losing streak since January before today, with the crisis in Greece adding to concern Turkey would struggle to rein in its current-account deficit.
Sarkozy’s comments signaled a reconciliation between Germany’s insistence that investors help bail out Greece with European Central Bank warnings backed by France that any compulsory move risked triggering a default. A Vienna-style voluntary debt rollover is a “good basis” for a solution, Merkel said. She declined to give a date, saying that the matter must be resolved “as quickly as possible.”
The ISE National 100 index of stocks gained for a second day, closing 1 percent higher at 61,716.68, paring its decline this week to 3.1 percent.
--Editors: Linda Shen, Stephen Kirkland
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