ISTANBUL, Sept 16 (Reuters) - Turkey's lira saw its biggest
one-day gain in almost three years on Monday on optimism about
the outlook for the budget deficit and as fears of an aggressive
tapering of U.S. stimulus and an imminent military strike on
neighbouring Syria receded.
The lira firmed to below 2 to the dollar for the
first time in almost three weeks, trading at 1.9950 by 1504 GMT
from 2.0301 late on Friday, its biggest one-day gain since
October 2010, according to Reuters data.
The yield on the 10-year bond fell to 9.5
percent from 9.79 percent at Friday's close.
Stocks also put in a strong performance, with the main share
index closing up 3.66 percent at 74,258.55 points,
outperforming a 1.54 percent rise on the broader emerging market
Finance Minister Mehmet Simsek said the budget deficit would
come in below the 34 billion lira ($16.8 billion) currently
forecast by the government, supported by privatisation receipts
and a pick-up in domestic demand.
The withdrawal of Lawrence Summers from the race to head the
U.S. Federal Reserve also lifted sentiment.
Summers had been seen as less wedded to policies such as
quantitative easing and more likely to scale it back quicker,
drying up the cheap liquidity that has flooded emerging markets
such as Turkey.
The positive sentiment fuelled expectations that Turkey's
central bank would leave interest rates on hold when its
monetary policy committee meets on Tuesday.
The bank said it would also hold a minimum $180 million
forex-selling auction on Tuesday.
(Reporting by Dasha Afanasieva; Editing by Nick Tattersall)
Keywords: MARKETS TURKEY/
(Dasha.Afanasieva@thomsonreuters.com)(+90 212 350 7051)(Reuters Messaging: Dasha.Afanasieva.firstname.lastname@example.org)
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