Turkey’s central bank tightened access to credit in a bid to contain exchange-rate volatility and curb inflation, which it said may stay above its target for “some time.”
Turkey’s industrial output unexpectedly dropped in August, the first annual decline this year, on falls in the clothing and refined petroleum industries.
Turkish bonds yields fell for a seventh day, declining almost 2 percentage points this year, to a record low on expectation of continued loose monetary policy by the central bank next year.
Turkish bond yields fell for a seventh day, the longest stretch of declines since July 2009, on speculation the central bank will keep interest rates at a record low. Stocks advanced for an eighth day.
Turkish inflation slowed more than expected in April to the lowest level in two years, boosting expectations of looser monetary policy and sending bond yields to new record lows.
Slowing loan growth may have contributed to the Turkish central bank’s surprise decision to resume funding at its lowest rate today, EFG Istanbul Securities chief economist Haluk Burumcekci said.
Turkey’s economy expanded 5.5 percent in the third quarter from a year earlier, prolonging a boom that has helped the government reduce borrowing and approach investment-grade credit ratings.
Turkey’s central bank raised the overnight lending rate and dropped a reference to reducing its benchmark rate in future, boosting the lira.
Turkish inflation accelerated in April for the fifth month in six, a pickup the central bank says will fade by the end of the year.
Turkish bond yields dropped for a third day as Prime Minister Recep Tayyip Erdogan said interest rates of about 6 percent are too high.
"We think this supports central bank loosening."
- Haluk Burumcekci on May 03, 2013