ECONOMY

Turkish bourse hits year high on rate cut hopes

ISTANBUL (Reuters) – Turkish shares closed at fresh year highs yesterday, buoyed by positive economic indicators and hopes for a cut in interest rates from the central bank. The main share index rose 2.97 percent to close at 17,742.44 points. Investors said strong Turkish exports and current account data were adding to widespread expectations that a rate cut is imminent. The lira slipped slightly to around 1,433,000 to the dollar on the interbank market from 1,427,000 on Wednesday, but bonds rose a touch. «The macro data is really quite strong and the expectation of a rate cut is keeping the market strong,» said Can Yazgan of Ata Investment in Istanbul. Recent official data has shown Turkey comfortably meeting its budgetary targets under a $16 billion IMF loan program. The finance minister said yesterday the current account deficit was likely to be much smaller than the $7.7 billion officially forecast. Additionally, the International Monetary Fund’s executive board was expected to approve late yesterday – early today in Europe – the next $500 million tranche under Turkey’s loan pact, which is aimed at stabilizing the economy.