Bloomberg News

Lira Strengthens After Basci Says Currency Will Gain This Year

January 08, 2012

Jan. 6 (Bloomberg) -- The Turkish lira strengthened for the first time in three days after central bank governor Erdem Basci said the currency will gain this year.

The lira climbed 0.4 percent to 1.8733 per dollar at 10:49 a.m. in Istanbul. The currency depreciated to a record low of 1.9224 per dollar Dec. 28, prompting the central bank to sell dollars directly in the market for four consecutive days, the first time since 2001.

Investors in the lira will make a profit in 2012 because the central bank will allow the currency to gain, Basci said in a speech in the western city of Bursa today. There is no reason for the lira to be weak; Turkey can comfortably gather foreign financing, Basci said. The bank’s first priority is keeping inflation low, he said.

“After heavy interventions in the foreign-exchange market Governor Basci’s comments could be perceived as a very strong verbal intervention,” Ozgur Altug, chief economist at BGC Partners in Istanbul, said in a client note. The lira can advance to the range of 1.86 and 1.8650 today, according to Garanti Securities, a securities company.

The bank said it may conduct additional dollar auctions on days in which a tighter monetary policy is deemed necessary. The amount on offer in supplementary auctions will be $50 million, the bank said in an e-mailed statement today.

--Editors: Ash Kumar, Peter Branton

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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