Turkish Stocks Rise to Record After Central Bank Cuts Inflation Forecast
Governor of the Central Bank of Turkey Durmus Yilmaz. Photographer: Dieter Nagl/Bloomberg
Turkish stocks rose to a record after the central bank lowered its forecast for inflation this year, raising speculation the central bank will delay rate increases.
The main ISE National 100 index increased 846.39, or 1.4 percent, to 60,354.07 at 11:25 a.m. in Istanbul, the highest level since at least January 1990, according to data compiled by Bloomberg. Turkiye Garanti Bankasi AS and Akbank TAS led gains.
Turkey’s central bank revised its forecast for year-end inflation to 7.5 percent from the 8.4 percent it predicted in April, Governor Durmus Yilmaz said at a news conference in Ankara today. The central bank foresees at “limited rise” in the benchmark interest rate next year, Yilmaz said.
“Lower inflation means the central bank won’t raise interest rates, and banks will benefit from it this year,” said Altug Dag, a trader at EFG Istanbul Securities. “Improved bank earnings expectations are also adding to gains.”
The lira was little changed at 1.5141 per dollar. Bonds rose, sending the yields on Turkey’s two-year benchmark bonds down four basis points to 8.16 percent, according to an ABN Amro Holding NV index.
Turkish banks are expected to report second-quarter results by an Aug. 13 deadline. Garanti is expected to earn 910 million liras in the second quarter, according to the average of eight estimates in a Bloomberg survey. Garanti reported a second- quarter profit of 765.1 million liras last year.
To contact the reporter on this story: Seda Sezer in Istanbul at ssezer2@bloomberg.net
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