Lira Falls After Turkey’s Output Grows at Slowest Pace This Year

The lira weakened against the dollar and the euro after Turkey’s industrial production grew at the weakest pace this year, missing analyst estimates.

The currency depreciated as output climbed 1.4 percent from a year earlier, lagging the 3.3 percent median estimate of three analysts in a Bloomberg survey. Industrial production fell 0.9% in March from the previous month after adjusting for work days and seasonality, the statistics agency said in a statement today from Ankara.

“The perception that the central bank will maintain its interest rate cuts will strengthen after the less-than-expected data,” Tufan Comert, a strategist at Garanti Securities in Istanbul, wrote in an e-mailed note.

The lira depreciated as much as 0.1 percent to 1.7979 per dollar, extending its loss this month to 0.3 percent. The currency traded at 1.7960 per dollar at 12:01 p.m. in Istanbul. It sank 0.3 percent against the euro to 2.3565.

Turkey’s central bank cut its one-week repo rate by 50 basis points to a record 5 percent on April 16 and also lowered the overnight interest rates. The Monetary Policy Committee is scheduled to meet on May 16.

Yields on two-year benchmark notes were unchanged at 5.12 percent, 10 basis points above a record-low on a closing basis of 5.02 percent reached on May 2.

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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