Bloomberg News

Lira Gains for Second Day as Exports, PMI Signal Lower Deficit

February 02, 2012

Feb. 1 (Bloomberg) -- The lira strengthened as a fall in a manufacturing gauge and rise in exports signaled cooling domestic demand and a reduction in Turkey’s current-account deficit.

The Turkish currency appreciated 0.4 percent to 1.7704 per dollar as of 11:36 a.m. in Istanbul, advancing for a second day to lift this year’s gain to 6.8 percent. Yields on the benchmark two-year debt were unchanged at 9.44 percent, a Turk Ekonomi Bankasi AS index showed.

Turkey’s manufacturing PMI fell to 51.7 in January from 52.0 in December, according to the HSBC purchasing managers’ index released by Markit Economics. This is the lowest figure since September. Turkish exports in January rose 10 percent from a year earlier to $10.6 billion, Bloomberg HT television said, citing preliminary figures announced by the Turkish Exporters Assembly.

“The picture is consistent with our and the central bank’s assessment that the economy is cooling noticeably,” Tevfik Aksoy, London-based chief economist for the region at Morgan Stanley & Co., said in an e-mailed note.

The lira slumped 18 percent last year in the biggest decline worldwide as the nation’s current-account deficit reached a record 10 percent of the gross domestic product, the highest rate among 60 major economies tracked by the International Monetary Fund. Inflation increased to 10.5 percent in December, the highest in three years.

--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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