ISTANBUL (Reuters) – Turkish markets slid further yesterday as a sharp rise in the current account deficit compounded worries about a spat between the government and the powerful military over education reform. The lira hit a fresh 2004 low of 1,500,000 to the dollar on the interbank market after the central bank said the deficit rose to $2.066 billion in February, against a market forecast of $1.532 billion and a January figure of $783 million. The currency had ended Thursday around 1,476,000 to the dollar in Friday-dated trade, itself a new low for the year. The main share index closed 3.53 percent down at 17,001.97, extending Thursday’s 3.6 percent slide. Yields on the most active October 5, 2005 papers rose to 26.25 percent from 25.77 percent late on Thursday, and Turkish Eurobonds also weakened. The lira has dropped by around 15 percent against the dollar in the past month on a series of domestic worries and a broader pullback from emerging markets. Turkish stocks have shed more than 12 percent in the past two weeks. Local markets had been jittery all day over strains between the government and the military on a draft law to ease restrictions on students entering university from vocational schools for future Muslim clerics. «Exchange rates at this level cannot be indicative,» said one bank treasury manager in Istanbul. «They might stay at this level on Monday, but there could be a recovery if there is a positive statement about the High Education Board law.» Soothing comments yesterday by Justice Minister Cemil Cicek that the government was fully committed to secularism did little to stem the market fall. Traders said strong US job figures, raising expectations of a US interest rate hike, also aided the lira’s slide. Analysts said there seemed little to support the markets next week despite Parliament’s approval yesterday evening of a package of constitutional amendments widely seen as crucial to the country’s hopes of starting European Union entry talks. The vote came after the market close.