Istanbul - Arabstoday
The Turkish lira gained slightly on Friday as the central bank tightened liquidity again in its battle to support the currency, while bond yields steadied ahead of debt auctions next week. By 0824 GMT, the lira had strengthened to 1.7941 to the dollar from 1.7956 late on Thursday. Against its euro-dollar basket the lira firmed to 2.0786, from 2.0806. Despite tighter and costlier liquidity over the past week, bond yields remained virtually unchanged while shares were rangebound. The central bank held another expensive intraday repo auction on Friday, its third this week, in place of the usual one-week repo auctions at a cheap fixed rate of 5.75 per cent. In intraday repo auctions, banks borrow from the central bank at a much higher rate, typically above 10 per cent. On on Friday banks borrowed at 10.80 per cent in the auction. The central bank also announced it sharply cut its minimum one-week maturity daily repo funding between April 13-26 to just 1 billion lira, from a previous 6 billion lira, another sign of its willingness to tighten liquidity and shore up the lira. “The central bank’s liquidity tightening helps the lira, together with the euro’s strengthening,” said Tufan Comert, a strategist at Garanti Securities.