Bloomberg News

Turkish Yields Fall for 4th Day on Cheaper Central Bank Funding

June 05, 2012

Yields on two-year Turkish benchmark debt fell for a fourth day after the central bank provided funding at its cheaper rate for the first time in four days.

Yields on two-year benchmark debt declined two basis points, or 0.02 percentage point, to 9.23 percent at the 5 p.m. close in Istanbul, at the lowest level since March 9.

The central bank provided funding at its lowest rate of 5.75 percent, lending 3 billion liras ($1.6 billion) in one-week repurchase agreements, its first so-called “normal” day after withholding lending at that rate for the previous three days, which are termed “exceptional” days. Emerging-market stocks rose, with a benchmark index climbing from a six-month low, amid speculation global policy makers will take steps to bolster economic growth.

“The return to normal days by the central bank and increased risk appetite in the globe are helping bonds,” Erkin Isik, a fixed-income strategist at Turk Ekonomi Bankasi AS, said in e-mailed comments.

The lira strengthened 0.2 percent at 1.8480 per dollar, taking this year’s gains to 2.3 percent, the second-best performance among emerging-market currencies after the Colombian peso.

“Today’s rise is meaningful after yesterday’s inflation data,” Murat Yardimci, head of trading at ING Bank AS, said in e-mailed comments.

Inflation slowed the most in almost a decade, with the rate falling to 8.3 percent in May from 11.1 percent in April, the biggest decrease since January 2003, the statistics office in Ankara said yesterday.

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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