Shallow trade in Turkey as lira goes up

ISTANBUL (Reuters) – The lira and Turkish bonds both strengthened yesterday in subdued trading, as investors watched overseas emerging market developments due to lack of market-moving news at home. The lira closed at 1.3300 to the dollar at interbank closing, after touching below that level during the day, compared with Tuesday’s close of 1.3370. The yield on the benchmark January 24, 2007 bond fell to 16.19 percent from a previous 16.28 percent. «There was nothing to speak of. The markets were very quiet and trade was shallow,» one banker said. She added that the markets saw some foreign selling and watched developments in other emerging markets, but there was not much action on them either. Analysts said that an easing dollar against the euro in the European spot market and abundant liquidity in the market, boosted by some Turkish banks’ hefty borrowing deals, backed the lira. Turkish banks have signed for $4.5 billion in borrowing since end-May. The central bank bought a maximum $45 million at its daily dollar purchase auction at an average rate of 1.3317 lira to the dollar. The bank has withdrawn $4.130 billion from the market since resuming the auctions on December 22.

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