Turkish Yields Fall for Second Day After Record Repo Lending

Oct. 28 (Bloomberg) -- Turkish bond yields dropped for a second day after the central bank lent a record high 25 billion liras in a one-week repo auction at its benchmark rate of 5.75 percent.

Yields on two-year debt fell 14 basis points, or 0.14 percentage points, to 9.76 percent, a Turk Ekonomi Bankasi index of the securities showed. Yields rose 33 basis points in the week, advancing for a third week.

The central bank today offered banks 25 billion ($14.3 billion) liras in one-week repo funding at the benchmark rate of 5.75 percent. The bank also offered 11 billion liras today at 12 percent annual rate to largest banks through an overnight facility.

“The market was in need of 35 billion liras liquidity today and the bank provided 25 billion liras in one-week repo,” Yagiz Oral, a trader at Denizbank AS in Istanbul, said by telephone. “About 6 billion to 7 billion liras of the liquidity demand stems from end-October tax payments.”

The lira declined 0.2 percent to 1.7514 per dollar, weakening for the first day in six, paring this week’s advances to 4.7 percent, the biggest gain among more than 20 emerging market currencies tracked by Bloomberg after Chilean peso.

Markets in Istanbul closed at 12:30 p.m. today for a public holiday.

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

To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net