Bloomberg News

Lira Rises to Month-High as Trade Deficit Falls for Eighth Month

July 31, 2012

The lira appreciated for a fifth day to the strongest in more than a month after Turkey’s trade deficit declined for an eighth consecutive month, signaling a lower current-account gap. Bonds rose.

The currency gained 0.5 percent to 1.7933 per dollar at 5:06 p.m. in Istanbul, the highest on an intraday basis since June 21. Yields on two-year benchmark bonds fell 15 basis points, or 0.15 percentage point, to 7.62 percent, the lowest since January 2011.

Turkey’s trade deficit declined to $7.2 billion from $10.2 billion a year ago, the statistics office in Ankara said on its website today. The median estimate of six economists surveyed by Bloomberg was for a shortfall of $7.9 billion. A record current- account gap last year spurred the world’s biggest currency decline, sending the lira 18 percent lower against the dollar.

“This figure indicates a very low current-account deficit around $3.7 billion in June,” Gizem Oztok Altinsac, an economist at Garanti Investment in Istanbul, said in an e-mailed note. “This is positive for the Turkish lira.”

The current-account shortfall shrank to 8.5 percent of GDP in May, or $67 billion, from $77 billion in December.

To contact the reporters 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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