The lira headed for its biggest gain in two weeks and Turkey’s bond yields dropped as the central bank sold dollars for a sixth day and on speculation the U.S. Federal Reserve will hold back from cutting monetary stimulus.
Turkey’s lira weakened the most in more than a year and bank stocks plunged as Prime Minister Recep Tayyip Erdogan warned demonstrators and lashed out against financial speculators for seeking to profit from protests against his government.
Bondholders in Turkey’s biggest brewer are signaling that protesters who’ve taken over Istanbul’s Taksim Square face disappointment as Prime Minister Recep Tayyip Erdogan indicated he won’t cede to their demands.
Turkish bonds surged and the lira touched an 11-month low after a bigger-than-forecast cut to interest rates preceded a decision by Moody’s Investors Service to raise the nation’s credit rating to investment grade.
Prime Minister Recep Tayyip Erdogan , who won a third term in office pledging to rewrite Turkey’s constitution and continue its economic growth, may have to seek alliances with the main Kurdish party in order to move forward with a new national charter, Inan Demir , chief economist at Finansbank AS, said today in a telephone interview.
Economists are split on whether Turkish monetary policy is looser or tighter after central bank Governor Erdem Basci cut one of his three interest rates while saying he’d use an experimental tool to manage liquidity.
Turkish central bank Governor Erdem Basci’s unexpectedly hawkish turn yesterday sent government note yields up by the most in almost two weeks even as he cut the benchmark interest rate for the first time in 16 months.