Bloomberg News

Lira Strengthens, Extends Week’s Advance, on Greece Outlook

July 01, 2011

July 1 (Bloomberg) -- The lira strengthened against the dollar, extending this week’s advance, as Greece moved closer to avoiding default.

The lira appreciated 0.8 percent to 1.6103 per dollar at 5:14 a.m. in Istanbul, extending this week’s gain to 1.6 percent. Two-year benchmark bonds rose, with yields falling nine basis points, or 0.09 percentage point, to 9.09 percent, data compiled by Bloomberg showed.

Euro-area finance ministers are set to approve the next aid payment due to Greece and outline a second rescue after banks lined up behind debt-rollover plans. The endorsements by Greece’s creditors and parliament met European Union conditions for preventing a default.

“I believe that the Greek crisis has been solved and will not bother us for a long time,” Suha Yaygin, deputy chief of emerging markets at Toronto-Dominion Bank in London, wrote in e- mailed comments.

The lira has gained 2 percent since hiting a two-year low against the dollar on June 28 after Greek lawmakers approved a budget-cutting package this week. The currency slumped 4.8 percent in the second-quarter, the worst performance among more than 20 emerging-market currencies tracked by Bloomberg.

“There will be a summer rally and Turkey will be among the ones to benefit the most because of the recent losses,” Yaygin said.

The ISE National 100 Index fell 0.01 percent to 63,264.51. It has advanced 1.9 percent this week.

--Editors: Stephen Kirkland, John Kohut, Alex Nicholson.

To contact the reporter on this story: Selcuk Gokoluk in Istanbul at sgokoluk@bloomberg.net

To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net


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