Turkish Lira Rises as PKK’s Ocalan Calls for Peace; Bonds GainSelcuk Gokoluk
The lira gained for a second day and bonds snapped their longest losing streak since 2009 after imprisoned Kurdistan Workers’ Party leader Abdullah Ocalan called on militants to quit the armed struggle and leave Turkey.
Ocalan’s call for peace boosts Prime Minister Recep Tayyip Erdogan’s initiative to end the conflict, which has left more than 30,000 people dead and cost hundreds of billions of dollars. His government has engaged in talks with the PKK leader, whose group is classified as a terrorist organization by Turkey, the U.S. and the European Union.
“This is positive and the lira is appreciating,” Burcin Metin, head of currency trading at ING Bank AS in Istanbul, said in e-mailed comments.
The Turkish currency pared this month’s loss to 1 percent, outperforming all major emerging-market currencies in Europe, according to data compiled by Bloomberg. The lira jumped 0.1 percent against the dollar at 1.8160 at 5:04 p.m. in Istanbul. Yields on two-year benchmark bonds reversed an earlier increase of as much as six basis points and closed three basis points lower at 6.15 percent.
“This war has cost the Turks hugely in terms of human life and financial expenditure,” Julian Rimmer, a trader at CF Global Trading UK Ltd in London, said in an e-mailed note. “There’s a big dividend for the Turks here in terms of reducing military expense and perhaps in securing favorable terms to import oil from Northern Iraq, lower their energy deficiency and improve their current-account deficit.”