ECONOMY

Rate cut boosts Turkish markets, stocks and bonds

ISTANBUL – Turkish markets firmed yesterday as investors welcomed the resignation of a government minister and a central bank overnight lending rate cut fed through to the bond market. Average bond yields on the busiest debt paper maturing on March 6, 2002 fell more than two percentage points to 83.08 percent, while the lira firmed to 1,414,000 to the dollar on the central bank-brokered spot market, from Tuesday’s close of 1,422,000. The fall in the dollar and the resignation of Housing Minister (Koray) Aydin had a positive effect. Additionally, the market response to the rate cut came in today, said a securities official at a private bank. The central bank on Tuesday cut overnight money rates to 59 percent from 60 percent, partly in a move to drive down borrowing costs for the treasury on a heavy domestic debt load, a legacy of financial crises in November and February. Shares on the main Istanbul index rose 0.33 percent to 9,630.41, with many eyes on interest rates. I think the fact that there is buying in the bond market has helped keep the share index up, said Murat Arkarakas of Ege Portfolio Management.