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Turkey Yields Fall to Lowest in One Month Before ECB Meeting

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Sept. 6 (Bloomberg) -- Turkish bond yields fell to the lowest level in a month as investors speculated European Central Bank President Mario Draghi will unveil measures that can stem the region’s debt crisis.

Yields on two-year benchmark debt retreated four basis points, or 0.04 percentage point, to 7.56 percent at 11:48 a.m. in Istanbul, declining for a third day to the lowest level since Aug. 7. The lira weakened less than 0.1 percent to 1.8191.

Draghi favors unlimited purchases of government debt that will be sterilized to assuage concerns about printing money, two central bank officials briefed on the plan said. He will speak at a press briefing after the ECB’s Governing Council decides on interest rates and his plan that aims to lower borrowing costs in indebted countries and prevent a breakup of the euro.

The decline in Turkish yields “stems from the positive climate about the bond-buying plans ECB is expected to announce today,” Tunca Alp, head of trading at Sekerbank AS in Istanbul, said in e-mailed comments.

The European Union countries buy 34.3 percent of Turkish exports, according to data published by the state statistics agency on Aug. 31.

Turkey’s central bank offered to lend 2 billion liras ($1.09 billion) at its lowest 5.75 percent policy rate today, the same amount of funding provided a week earlier in the one-week repurchase agreements auction.

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

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