Turkish bond yields headed for the biggest jump in more than a week and default swaps rose after Turkey fired into Syrian territory in retaliation to shelling by its neighbor Wednesday that killed five people.
Concern that Turkey’s 720,000-strong military will be dragged into a conflict led yields on two-year benchmark debt four basis points, or 0.04 percentage point, higher to 7.61 percent at the close in Istanbul, the most since Sept. 26. Credit default swaps advanced for the first time in six days by three basis points to 153, data shows.
The parliament voted by 320 to 129 after a three-and-a-half-hour debate in favor of a one-year mandate for the government to order military operations outside Turkey, according to the assembly’s press office.
“The whole picture is unpleasant and must be monitored very carefully,” Suha Yaygin, deputy head of emerging markets at Toronto Dominion Bank in London, said in emailed comments.
A version of this article appeared in the print edition of The Daily Star on October 06, 2012, on page 4.