Turkish stocks slid for a second day as investors speculated the central bank would continue to raise reserve requirements in its bid to limit loan expansion.
The Istanbul Stock Exchange Main 100 index dropped 1.8 percent to 75,898.69 at the close in Istanbul today, its lowest level since Dec. 6. Banks led the decline, with Turkiye Garanti Bankasi AS losing 3.8 percent, Akbank TAS falling 2.3 percent, Turkiye Is Bankasi AS plummeting 4.1 percent and Turkiye Vakiflar Bankasi TAO slipping 2.3 percent. The 16-member banking index retreated 3.2 percent.
The central bank in Ankara raised foreign-exchange and lira reserve requirements for lenders on Feb. 19, citing an increase in loan growth. The government will continue to take steps to restrict expansion in loans as it seeks to limit lending growth to 15 percent this year, Deputy Prime Minister Ali Babacan said in televised comments from Istanbul today.
“It looks like the central bank will continue raising reserve requirements,” Gizem Oztok Altinsac, an economist at Garanti Securities in Istanbul, said in a phone interview today. “This limits equity gains, while triggering selling.”
Loan growth was above the government’s target at 19 percent in the year to Feb. 8, according to data on the state statistics agency’s website.
The decline extended losses on the Istanbul Stock Exchange to 3 percent this year, down from a jump of 11 percent over year-to-Jan. 24.