Nouriel Roubini is no clearer on whether Turkey’s central bank will cut borrowing costs tomorrow than economists or traders after a drop in the lira prompted investors to pare bets for a reduction in interest rates.
Turkish bond yields surged and stocks slumped after Prime Minister Recep Tayyip Erdogan failed to calm investor concern as anti-government protesters demonstrated for the seventh day. The lira depreciated.
The ruble surged the most in almost 22 months against the euro and climbed to a one-year high versus its target basket on the first day of 2011 trading amid speculation local investors are repatriating funds on concern Europe’s debt crisis will worsen.
Russia’s economy grew at the weakest pace since 2009 in the first quarter as the euro area’s longest recession hurt demand for commodity exports and investment at companies including OAO Gazprom cooled.
Foreign-exchange reserves at Turkey’s central bank surpassed $100 billion, the highest on record, helping policy makers limit swings in the currency and serving to underpin the world’s biggest bond rally.