- Currency climbs to highest level vs dollar since Jan. 5
- Stocks rise for fifth day in longest rally since September
Turkey’s lira advanced to a three-week high and stocks gained with bonds amid speculation global monetary stimulus will help boost capital inflows as the U.S. keeps interest rates on hold.
The currency rose 1 percent to 2.9731 against the dollar as of 7:10 p.m. in Istanbul, paring this year’s drop to 1.9 percent. Stocks advanced for fifth day in the longest rally since September after the Federal Reserve said on Wednesday it’s “closely monitoring” developments from China to Europe for any adverse impact on the U.S. economy.
While the Fed’s comments has led futures traders to predict a less than one-in-five chance rates will rise in the next two months, the European Central Bank signaled last week it may reassess its unprecedented bond-buying in March. The Bank of Japan is set to review policy on Friday. Global stimulus boost demand for riskier assets in countries like Turkey, which relies on international capital to finance the widest current-account deficit among the Group of 20 nations.
“Lira assets are joining their emerging-market peers in celebrating a more dovish Federal Reserve,” Gulsen Ayaz, a director of institutional equity sales at Deniz Yatirim in Istanbul. “The longevity of the positive sentiment depends a lot on the next moves from the Bank of Japan and the European Central Bank in the coming period.”
The Borsa Istanbul 100 Index rose 0.5 percent to the highest close since Jan. 13, led by Turkiye Garanti Bankasi AS, the nation’s largest listed lender, and Haci Omer Sabanci Holding A.S. The MSCI Emerging Markets Index gained 0.9 percent.
The yield on two-year government bonds fell 9 basis points to 11.10 percent.
The lira tumbled 20 percent in the past 12 months as foreign investors sold a net $10.6 billion of Turkish stocks and bonds in the year ended Jan. 22, according to data compiled by Bloomberg.