Lira Strengthens to One-Week High Before Turkey Central Bank Rate Decision

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  • Posted on April 21, 2011


    Turkey’s lira rallied to the highest in almost a week against the dollar as better-than- expected profit at U.S. companies boosted risk appetite and before a meeting where the central bank may keep rates on hold.

    The lira strengthened 0.3 percent to 1.5154 per dollar at 11:09 a.m. in Istanbul. Yields on two-year benchmark debt dropped five basis points, or 0.05 percentage point, to 8.57 percent, the RBS Istanbul benchmark bond index showed. The ISE National 100 Index (XU100) advanced 0.2 percent to 68,161.29.

    Apple Inc.’s earnings more than doubled, signaling consumer demand is intact and boosting the global economic outlook. The central bank’s Monetary Policy Committee will hold the one-week repo rate at 6.25 percent, according to all 11 economists surveyed by Bloomberg. The bank will announce its decision at 2 p.m. in Ankara today.

    “I am still bullish on lira and target 1.45 in two months,” Benoit Anne, head of global emerging markets strategy at Societe Generale SA, France’s second-largest bank, said by e- mail from London.

    Central banks from Thailand to Brazil have lifted interest rates this week, while the U.S. Federal Reserve is forecast to maintain stimulus amid prospects for a weak recovery in the world’s largest economy.

    Turkey’s central bank will raise the benchmark interest rate to 6.75 percent in the final quarter of 2011, according to the average estimate of seven banks surveyed by Bloomberg. The lira’s forecasted total return of 4.3 percent against the dollar in the third quarter will be second only to a 5.6 percent advance in Peru’s sol among 22 emerging-market currencies ranked by Bloomberg.

    “Our big call is that we are going to see more tightening by the central bank over the next few months,” Benoit said. “We have 100 basis points of hikes earmarked for this year, including a 50 basis-point hike in June.”

    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

    Bloomberg/AC