Mobile  |  About us  |  Photos  |  Videos  |  Subscriptions  |  RSS Feeds  |  Today's Paper  |  Classifieds  |  Contact Us
The Daily Star
THURSDAY, 24 APR 2014
09:32 AM Beirut time
Weather    
Beirut
22 °C
Blom Index
BLOM
1,214.01down
Middle East
Follow this story Print RSS Feed ePaper share this
Turkish lira weakens as current account gap widens
Reuters
An advertisement poster with a picture of Turkish Prime Minister Tayyip Erdogan is pictured inside a metro train in Istanbul January 13, 2014. REUTERS/Murad Sezer
An advertisement poster with a picture of Turkish Prime Minister Tayyip Erdogan is pictured inside a metro train in Istanbul January 13, 2014. REUTERS/Murad Sezer
A+ A-

ISTANBUL: Turkey's lira weakened to near record lows on Tuesday after data showed the current account deficit had widened in November.

A corruption inquiry shaking Turkey's government, along with U.S. plans to scale back its massive stimulus programme, have weighed on the lira, knocking it down more than 7 percent since mid-December, when the graft scandal first emerged.

The deficit widened to $3.94 billion in November from $2.89 billion a month earlier, narrower than had been feared but not enough of an improvement to cheer the market.

The lira weakened to 2.1911 against the dollar by 0820 GMT from 2.1800 earlier in the morning.

"I guess this just affirms that the pace of improvement is just not moving fast enough to quickly eradicate concerns over Turkey's key Achilles heel, the current account deficit," said Timothy Ash, head of emerging markets research at Standard Bank.

"The lira looks set to go weaker still until the central bank opts to tighten monetary policy in a more meaningful way."

Turkey depends on cheap capital inflows to finance its current account deficit, running at around 7 percent of GDP, leaving it particularly exposed to any slowdown in inflows triggered by scaling back of the U.S. Fed's bond buying.

Despite the lira's decline, the central bank has so far refused to hike rates, instead opting to tighten monetary policy through cancelling repo auctions and trying to support the currency through dollar sales.

The main Istanbul index was down 1.29 percent at 67,186 points, compared with the main global emerging market index which rose 0.51 percent.

The yield on Turkey's 10-year benchmark bond fell to 10.01 percent from 10.04 percent late on Monday.

 
Home Middle East
 
     
 
Turkey
Advertisement
Comments  

Your feedback is important to us!

We invite all our readers to share with us their views and comments about this article.

Disclaimer: Comments submitted by third parties on this site are the sole responsibility of the individual(s) whose content is submitted. The Daily Star accepts no responsibility for the content of comment(s), including, without limitation, any error, omission or inaccuracy therein. Please note that your email address will NOT appear on the site.

comments powered by Disqus
Story Summary
Turkey's lira weakened to near record lows on Tuesday after data showed the current account deficit had widened in November.

A corruption inquiry shaking Turkey's government, along with U.S. plans to scale back its massive stimulus programme, have weighed on the lira, knocking it down more than 7 percent since mid-December, when the graft scandal first emerged.

The lira weakened to 2.1911 against the dollar by 0820 GMT from 2.1800 earlier in the morning.
Entities
Advertisement


Baabda 2014
Advertisement
Follow us on Facebook Follow us on Twitter Follow us on Linked In Follow us on Google+ Subscribe to our Live Feed
Multimedia
Images  
Pictures of the day
A selection of images from around the world- Wednesday, April 23, 2014
View all view all
Advertisement
Rami G. Khouri
Rami G. Khouri
Israel shows Zionism’s true colors
Michael Young
Michael Young
For Christians, blessed are the dividers
David Ignatius
David Ignatius
An Iran deal is close, but we’re not there yet
View all view all
Advertisement
cartoon
 
Click to View Articles
 
 
News
Business
Opinion
Sports
Culture
Technology
Entertainment
Privacy Policy | Anti-Spamming Policy | Disclaimer | Copyright Notice
© 2014 The Daily Star - All Rights Reserved - Designed and Developed By IDS