Turkey’s Bonds Climb After November Inflation Unexpectedly Slows

Turkish bond rose, with yields falling for the first time in three days after inflation unexpectedly slowed in November.

Yields on two-year benchmark notes slipped as much as 11 basis points, 0.11 percentage point, and traded one basis point lower at 9.12 percent at 2:11 p.m. in Istanbul. The lira was little changed at 2.0392 against the dollar, after depreciating 1 percent yesterday, the most in a month.

Turkey’s annualized inflation rate slid to 7.32 percent, from 7.71 percent in October, the Ankara-based Statistics Office said. Consumer-price growth was forecast to climb 7.8 percent, according to the median of eight estimates in a Bloomberg survey of economists.

“The headline print looks good, especially following the significantly high October print,” Tevfik Aksoy, the chief emerging-markets economist at Morgan Stanley for central and eastern Europe, Middle East and Africa in London, said in an e-mailed note today.

Inflation will probably remain above the central bank’s year-end forecast of 6.8 percent due to a weakening lira and higher food prices, the bank said on Nov. 26. It is set to slow to 7.6 percent by the end of 2013, according to the median estimate in Bloomberg survey of 33 economists from Nov. 22-27.

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