AGL 37.89 Decreased By ▼ -0.26 (-0.68%)
AIRLINK 124.10 Increased By ▲ 2.59 (2.13%)
BOP 5.67 Decreased By ▼ -0.18 (-3.08%)
CNERGY 3.75 No Change ▼ 0.00 (0%)
DCL 8.55 Increased By ▲ 0.15 (1.79%)
DFML 40.48 Decreased By ▼ -0.41 (-1%)
DGKC 87.10 Increased By ▲ 2.50 (2.96%)
FCCL 33.98 Increased By ▲ 1.28 (3.91%)
FFBL 66.01 Increased By ▲ 0.51 (0.78%)
FFL 10.20 Increased By ▲ 0.15 (1.49%)
HUBC 104.45 Increased By ▲ 0.65 (0.63%)
HUMNL 13.45 Increased By ▲ 0.20 (1.51%)
KEL 4.78 Increased By ▲ 0.35 (7.9%)
KOSM 6.84 Decreased By ▼ -0.25 (-3.53%)
MLCF 38.84 Increased By ▲ 1.34 (3.57%)
NBP 60.35 Increased By ▲ 0.10 (0.17%)
OGDC 179.65 Increased By ▲ 7.40 (4.3%)
PAEL 24.97 Increased By ▲ 0.17 (0.69%)
PIBTL 5.71 Increased By ▲ 0.01 (0.18%)
PPL 153.00 Increased By ▲ 11.31 (7.98%)
PRL 22.79 Increased By ▲ 0.07 (0.31%)
PTC 14.91 Increased By ▲ 0.17 (1.15%)
SEARL 66.85 Increased By ▲ 2.29 (3.55%)
TELE 7.01 Decreased By ▼ -0.13 (-1.82%)
TOMCL 35.70 Increased By ▲ 0.20 (0.56%)
TPLP 7.32 Increased By ▲ 0.03 (0.41%)
TREET 13.99 Decreased By ▼ -0.21 (-1.48%)
TRG 50.95 Decreased By ▼ -0.80 (-1.55%)
UNITY 26.40 Decreased By ▼ -0.20 (-0.75%)
WTL 1.23 Increased By ▲ 0.01 (0.82%)
BR100 9,717 Increased By 233.5 (2.46%)
BR30 29,237 Increased By 866.2 (3.05%)
KSE100 90,860 Increased By 1893.1 (2.13%)
KSE30 28,458 Increased By 630.4 (2.27%)

Turkey's long-suffering lira got a reprieve on Friday after the US Federal Reserve left interest rates unchanged, but political uncertainty and a grim outlook for growth meant the gains were likely to be short-lived. A rate increase might have increased the chances that Turkey's central bank would also tighten at its meeting next week, something political pressure has kept it from doing.
"If the Fed had hiked rates yesterday, one of the uncertainties would have been gone, giving room to the central bank for a rate corridor tightening on September 22," said Pinar Uslu, a banking strategist at ING. Turkey's central bank is scheduled to hold its monthly monetary policy committee (MPC) meeting next Tuesday. All 16 economists polled by Reuters have said they expect the bank to keep rates unchanged.
The Fed's decision helped emerging currencies considered vulnerable to higher US rates, such as the lira. Higher US rates would make some dollar-denominated assets more attractive, prompting investors to sell emerging market currencies to buy dollars. The lira was at 2.9830 to the dollar at 1419 GMT, firmer from its close of 3.0120 overnight. The dollar has strengthened about 28 percent against the lira so far this year. The main BIST 100 share index was little changed at 74,967.49.
Fitch ratings agency, in a pre-scheduled ratings review left its Turkey rating at BBB- and its outlook "stable" on Friday, but noted that the country's political outlook had deteriorated. The agency cited political uncertainty resulting from a June 7 election and the breakdown of the Kurdish peace process as reasons for the deterioration. Confidence in Turkey has been hurt by political uncertainty after the AK Party founded by President Tayyip Erdogan failed to secure a single-party majority in a June election. Turkey now faces a November 1 snap election.
Sentiment has also been hit by fighting between security forces and militants of the Kurdistan Workers Party since the collapse of a ceasefire in July. In an interview late on Thursday, former President Abdullah Gul cited the decline in foreign investor confidence as one of the problems facing Turkey. "This tension and stress of today continuing is very costly for Turkey," Gul said. "For Turkey to grow, others need to invest in Turkey. And that is (only possible) when confidence and stability are expected, when the law really increases confidence."

Copyright Reuters, 2015

Comments

Comments are closed.