The lira retreated for a second day, heading for its lowest level in almost seven weeks, after current-account deficit for January remained unchanged over a year ago, missing estimates.
The lira depreciated 0.6 percent to 1.7977 per dollar as of 5:01 p.m. in Istanbul, the weakest level since Jan. 25 on a closing basis, paring year-to-date gains to 5.2 percent. Yields (BENCH) on the two-year benchmark debt climbed 14 basis points, or 0.14 percentage point, to 9.32 percent, according to a Turk Ekonomi Bankasi AS (TEBNK) index of the securities showed.
The deficit was $6 billion, the central bank in Ankara said today, lagging the $5.5-billion median estimate of six economists surveyed by Bloomberg. Turkey’s current-account gap is the highest in the world at 10.3 percent of the gross domestic product among 60 major economies tracked by the International Monetary Fund. The lira fell 18 percent last year to its record low against the dollar in the biggest decline worldwide as the country’s deficit widened and inflation surged to a three-year high of 10.5 percent.
The gap “underscores Turkey’s vulnerability via the energy price channel,” Tim Ash, London-based head of emerging markets research at Royal Bank of Scotland Plc, said in a report to clients e-mailed today. Turkey paid $54 billion for energy imports last year, which is 22 percent of its total import bill, according to the statistics office website.
Crude for April delivery increased to $109.77 per barrel on Feb. 24, the most since May, on account of rising geo-political tensions in the Middle East. The commodity has since retreated, trading $106.18 per barrel in electronic trading in New York today, down 1.1 percent.
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