The Turkish lira gained while the country’s stocks and bonds advanced on reports that Turkish captives detained by insurgents in the Iraqi city of Mosul will be released, ending speculation that the nation will be pulled into Iraq’s turmoil.
The lira advanced 0.5 percent to 2.1067 a dollar at the close of trading in Istanbul. The lira also got boosted by data that showed that the country’s current-account deficit shrunk over 40 percent from the year ago after exports rose. The current account gap contracted to $4.79 billion, exceeding the economists’ forecast of a shortfall of $4.9 billion in a Bloomberg survey.
The lira declined by 15 percent in the year through April, making it the worst performing emerging market currency in Europe, Middle East and Africa region.
“There is no official announcement but the market is trying to trade positively due to the expectation that the detainees in Mosul will be released,” said Murat Yardimci, the head of trading at ING Bank AS.
Turkey exported goods worth $12 billion to Iraq in 2013, making it the second biggest exporter to the Middle Eastern country after Germany, according to data compiled by the Ankara-based statistics office
The Borsa Istanbul 100 Index rose 1 percent after declining by as much as 1.5 percent earlier. Yields on 2-year government notes plunged 20 basis points to stand at 8.25 percent.
Al-Qaeda-linked militants took hostage Turkish diplomats in Mosul on Wednesday, triggering a 3.3 percent decline in the stocks and pushed the lira into its steepest decline since January. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.
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