The lira weakened and bonds fell for a second day as Spanish sovereign bonds declined, outweighing Turkey’s positive unemployment and consumer confidence data.
The currency slipped 0.1 percent to 1.7993 per dollar at 5:16 p.m., depreciating for a second day, paring its year-to- date gain to 5 percent. The yield on two-year benchmark debt rose for a second day, up two basis points, or 0.02 percentage point, to 9.42 percent.
Turkey’s unemployment rate retreated to 10.2 percent in January, compared with 11.9 percent a year ago, according to the statistics office in Ankara. Consumer confidence in the country rose for a fifth month in March, the longest streak of gains since June 2010. Ten-year Spanish bond yields climbed to a four- month high ahead of a debt auction tomorrow, while commodities fell and emerging-market stocks slipped on concern the European debt crisis may worsen.
“We can’t isolate ourselves from problems in Europe and it is affecting us like everyone else,” Tunc Obuter, head of trading at Garanti Investment in Istanbul, said in e-mailed comments.
The lira performed better than the ruble, zloty, forint and koruna today after the central bank refrained from lending at the lowest funding rate of 5.75 percent for a fourth day in its one-week repo auctions.
“We are decoupled positively because of our stronger fundamentals,” said Obuter.
Turkey’s central bank varies the funding rate on a daily basis, maintaining borrowing cost within a 5.75 percent to 11.5 percent interest-rate corridor introduced last year. It has refrained from lending at the lowest rate since April 11, a day after the lira weakened to its three-week low at 1.8177.
The current-account deficit in Turkey is about 10 percent of gross domestic product, the most among 60 major economies tracked by the International Monetary Fund. The country’s inflation rate is 10.4 percent, which is more than twice the bank’s target for this year.
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