Turkey Lira Gains Most Since June in Rebound From Drop YesterdayYe Xie
Turkey’s lira rose the most in a month as easing concern over the crises in the Middle East and Ukraine spurred demand for higher-yielding currencies.
The lira gained 0.8 percent, the most since June 18, to 2.124 per dollar as of 3:55 p.m. in New York. It recouped part of yesterday’s 1 percent drop, a slump triggered in part by the central bank’s move to cut interest rates at a policy meeting.
Higher-yielding emerging-market currencies rallied as investors refocused on global economic growth after the downing of a Malaysian jet in Ukraine yesterday and the start of Israel’s ground operation in Gaza sparked risk aversion. Turkey’s central bank cut two of its three main interest rates yesterday, in line with economists’ estimates.
“Risk-off sentiment” in the currency market is “short-lived,” analysts led by Ulrich Leuchtmann at Commerzbank AG wrote in a note today.
Turkish central bankers led by Governor Erdem Basci lowered their benchmark repurchase and overnight borrowing rates by 50 basis points yesterday to 8.25 percent and 7.5 percent, respectively. The bank maintained its overnight lending rate at 12 percent. All three decisions match the median estimates in separate Bloomberg surveys.