Turkish Yields Drop to Month Low as Central Bank Provides Funds

Turkish benchmark yields fell to the lowest in almost a month as the lira’s appreciation prompted the central bank to increase the funds it provides to lenders.

Yields on two-year benchmark bonds declined 13 basis points, or 0.13 percentage points, to 5.82 percent at the 5:00 p.m. close in Istanbul, the lowest level since March 12. The lira sank 0.2 percent to 1.7872 a dollar in its first depreciation in five days. The currency has advanced 1.1 percent in the past month.

The central bank provided 2 billion liras ($1.1 billion), twice as much as last week, in its one-week repurchase auction today at the 5.50 percent benchmark interest rate. The funds available to lenders increased to 16.3 billion liras today from 13.5 billion liras yesterday, according to central bank data.

“It seems that there is a change of stance by the central bank because of the currency’s appreciation,” Erkin Isik, a fixed-income strategist at Turk Ekonomi Bankasi AS (TEBNK), wrote in e- mailed comments. “The central bank has made the liquidity more abundant.”

The central bank’s Monetary Policy Committee will convene on April 16 to determine interest rates.

Turkey sold its longest-dated dollar bonds in two years yesterday, raising $1.5 billion from 30-year notes at a yield of 4.95 percent, according to data compiled by Bloomberg. Turkey received investor orders for about three times the amount sold from 28 countries and is paying its lowest coupon ever for 30- year dollar debt, the Treasury said in a statement today.

To contact the reporter on this story: Selcuk Gokoluk in Istanbul at sgokoluk@bloomberg.net

To contact the editor responsible for this story: Claudia Maedler at cmaedler@bloomberg.net

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