Turkish Lira Weakens After Local Companies Purchase Dollars
Turkish lira, the worst-performing currency this year, weakened as local companies drove demand for the dollar even as the central bank sold three times the $50 million target it announced two days ago for daily auctions.
The currency depreciated 0.1 percent to 1.9017 per dollar as of 4 p.m. in Istanbul, falling for the second time in two days. The lira has weakened 19 percent this year, making it the worst-performing among more than 20 emerging-market currencies tracked by Bloomberg.
Turkey’s central bank said it plans to sell $50 million a day in its daily dollar auctions unless there are “exceptional” circumstances. The plan, effective yesterday, will continue until the next monetary policy committee meeting in January. The bank sold $150 million today versus bids for $263 million.
“The lira is today performing worse than other emerging markets and we are seeing dollar buying from a local corporation,” Burcin Metin, chief currency trader at ING Bank AS in Istanbul, said today.
Yields on the two-year benchmark debt declined seven basis points, or 0.07 percentage point, to 10.73 percent, a Royal Bank of Scotland index of the securities showed, the biggest fall in a week.
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