Bloomberg News

Lira Drops Fourth Day After S&P Downgrade Warning for Europe

December 07, 2011

Dec. 6 (Bloomberg) -- The Turkish lira depreciated for a fourth day and headed for its weakest level in a week after Standard & Poor’s said it may downgrade credit ratings of 15 euro nations.

The lira slid 0.4 percent to 1.8398 at 9:08 a.m. in Istanbul, bringing this year’s losses to 16 percent, the second worst performance among more than 20 emerging market currencies tracked by Bloomberg.

Standard & Poor’s put Germany, France and 13 other euro- area nations on review for a downgrade yesterday, saying “continuing disagreements among European policy makers on how to tackle” the region’s debt crisis risk damaging their financial stability.

“The S&P decision affected the Turkish lira adversely in the morning hours,” Fatih Keresteci, a strategist at HSBC Bank AS in Istanbul, wrote in a note to clients.

The Treasury will offer new fixed-rate lira bonds due in December 2013 in an auction today as part of its plan to borrow 1 billion liras ($543 million), against a domestic debt service of 1.1 billion liras this month, according to its website.

--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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