Bloomberg News

Lira Falls For Second Day Before Central Bank Rates Meeting

October 20, 2011

Oct. 20 (Bloomberg) -- The lira weakened for a second day as Europe’s debt worries dented appetite for riskier emerging market assets and before the central bank’s meeting on interest rates.

The lira slid 0.2 percent 1.8726 per dollar at 9:09 a.m., extending its losses this year to 17.6 percent, making the currency the second worst-performer among emerging currencies after South African rand.

A French-German split over Europe’s rescue strategy emerged as finance ministers prepare to meet in Brussels tomorrow under pressure to craft a solution to the region’s debt crisis. Luxembourg Prime Minister Jean-Claude Juncker, who chairs the group of euro-area finance ministers, indicated an impromptu meeting of European leaders in Frankfurt last night failed to resolve differences. “We are still meeting,” he said as he departed.

“It is likely that continued delays to progress in the Eurozone will see further upside for the dollar against the lira although a less dovish statement from the central bank today could generate a relief rally in the lira,” Johannesburg-based Tradition Analytics said in an e-mailed report to clients.

The central bank will probably hold the one-week repo rate at a historic low of 5.75 percent, according to all 14 economists surveyed by Bloomberg. The bank will announce its decision at 2 p.m. in Ankara today.

--Editor: Mark Bentley

To contact the reporter on this story: Selcuk Gokoluk in Istanbul at

To contact the editor responsible for this story: Gavin Serkin at

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