Bloomberg News

Lira Weakens First Day in Three Before Central Bank Dollar Sale

October 06, 2011

Oct. 6 (Bloomberg) -- The lira weakened for the first day in three ahead of the central bank’s daily auction of dollars, after rising the most in three weeks yesterday when it sold a record $750 million.

The lira declined 0.1 percent to 1.8658 per dollar at 9:23 a.m. in Istanbul. The bank has sold $4 billion in auctions since Aug. 5 to shore up the lira, which has depreciated 17 percent this year against the dollar and become the worst performer among emerging market currencies.

“The sale amount at the auction will determine the lira’s direction,” Fatih Keresteci, a strategist at HSBC Holdings Plc in Istanbul, said in an e-mailed report to clients. “A figure like yesterday’s may drive the lira’s rate against the dollar to 1.85 and a low figure may cause lira depreciation.”

The lira hit a record low of 1.9096 per dollar on Oct. 4, forcing the Ankara-based central bank to increase its dollar sales, as the current-account deficit and worsening European debt crisis hurt investor confidence in Turkey’s financial stability.

--Editors: Mark Bentley

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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