Feb. 24 (Bloomberg) -- The lira was the biggest-losing emerging-market currency against the dollar and yields rose the most in six weeks as rising oil prices revived concern on the current account deficit.
The Turkish currency declined 0.5 percent to 1.7677 per dollar at 5:28 p.m. in Istanbul, the worst performance among emerging-market currencies today. Yields on the two-year benchmark bonds climbed 13 basis points, or 0.13 percentage point, to 9.18 percent, rising the most since Jan. 10.
“Turkey’s local rates market has come under severe pressure, simply because whenever oil prices become a major market focus, you can be sure that lira assets are going to be hammered,” Benoit Anne, chief strategist at Societe Generale in London, said in e-mailed comments.
Oil climbed for a seventh day, the longest streak of advances since January 2010, as escalating tension with Iran threatens supplies and on signs of a global economic recovery.
“The main reason why the lira has decoupled appears that rising oil prices reignited concern on the current account deficit,” Tufan Comert, a strategist at Garanti Securities in Istanbul, said in a note.
Turkey depends on imports for nearly all of its energy requirements, paying $54 billion last year, 22 percent of its total import bill, the State Statistics Institute website shows.
The country’s current account deficit narrowed in the last two months of 2012 after a credit-fueled boom led to a surge in imports that pushed the 12-month trade gap to a record $78.6 billion in October. The deficit is still about 10 percent of gross domestic product.
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