Bloomberg News

Lira Heads for One-Month Low After Bank Doesn’t Offer Dollars

November 23, 2011

Nov. 23 (Bloomberg) -- The lira headed for its lowest level in more than one month after the central bank didn’t sell dollars in daily auctions for a second day.

The lira depreciated 0.7 percent to 1.8637 per dollar at 12:15 p.m. in Istanbul, heading for its lowest level since Oct. 19. Yields on two-year lira-denominated debt increased two basis points, or 0.02 percentage point, to 10.54 percent, a Turk Ekonomi Bankasi AS index of the securities showed.

The Ankara-based central bank didn’t hold an auction to sell dollars for liras for a second day after it has sold about $9 billion since it embarked on dollar sale auctions on Aug. 5, including a direct intervention, to bolster the lira and control inflation.

“The central bank doesn’t want to spend its reserves and it sees that the lira’s negative performance is caused by external factors,” Burcin Metin, chief currency trader at ING Bank AS in Istanbul, said in e-mailed comments.

The Turkish central bank’s foreign currency reserves rose $3.4 billion to $87.2 billion in the week ending Nov. 11, according to data on its website.

The bank is expected to keep the benchmark one-week repo rate unchanged at 5.75 percent at a meeting of its Monetary Policy Committee, according to all eight economists in a Bloomberg survey. The central bank publishes its decision on rates and a summary of the Monetary Policy Committee’s views at 2 p.m. in Ankara.

--Editor: Aydan Eksin

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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