Already a Bloomberg.com user?
Sign in with the same account.
Feb. 2 (Bloomberg) -- The lira weakened for the first time in three days as traders took profits after the currency recorded its biggest gain this year yesterday and importers began buying dollars.
The lira depreciated 0.2 percent to 1.7585 at 5:20 p.m. in Istanbul, paring its rise this year to 7.5 percent. The currency strengthened 1.2 percent yesterday, its biggest increase this year.
“We’re seeing importers on bid again and also some profit- taking,” Eren Yardimci, an emerging-market currency trader at UBS AG in Zurich, said in e-mailed comments.
The lira fell 18 percent against the dollar last year, the biggest decline among global currencies, after the country’s current-account deficit widened to a record as imports surged. The currency has strengthened this year as promises for more liquidity from global central banks increased capital flows to emerging markets and alleviated investors’ concerns that Turkey may struggle to finance its deficit.
Continued inflows into emerging markets will result in a stronger lira, though the currency remains “fundamentally under pressure,” according to a report by Renaissance Capital analyst Natasha Zagvozdina today. The Russian investment bank sees the lira falling to 1.85 per dollar by year-end, the report said.
Inflation in Turkey was 10.5 percent in December, the highest in three years. The current-account deficit declined to $8.1 billion in January from $8.7 billion in December. It remains higher compared with November when the reading came in at $7.5 billion.
Yields on benchmark two-year Turkish bonds rose three basis points, or 0.03 percentage point, to 9.37 percent.
--Editors: Ash Kumar, Linda Shen
-0- Feb/02/2012 09:48 GMT
-0- Feb/02/2012 09:55 GMT
To contact the reporter on this story: Benjamin Harvey in Istanbul at firstname.lastname@example.org
To contact the editor responsible for this story: Gavin Serkin at email@example.com -0- Feb/02/2012 09:13 GMT