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Turkish lira, bonds ease on geopolitical worries, EM sell-off

ISTANBUL, Oct 8 (Reuters) - Turkish lira and bonds eased in thin trade on Monday, with geopolitical risks weighing after bombardments between Syria and Turkish forces in the southeast of the country over the weekend.

Emerging markets were also weakened on Monday after the World Bank cut its growth forecast for the East Asia and Pacific region, including China while a fall in oil prices pushed Russian equities down 1.5 percent.

Sunday was the fifth consecutive day of Turkish retaliatory strikes against incoming bombardments from northern Syria, where President Bashar al-Assad's forces have been battling rebels who control swathes of land near the Turkish border.

By 1508 GMT, the lira weakened to 1.8115 against the dollar

from 1.7946 late on Friday. Against its euro-dollar basket , the lira eased to 2.0802 from 2.0700.

"We see outflows from Turkey due to the tensions with Syria and the sell-off in South Africa's rand. The lira can continue to weaken until 1.83 against the dollar," said Burcin Metin, head of the forex desk at ING Bank.

The yield on the two-year benchmark bond closed at 7.68 percent, from a previous close at 7.57 percent. Traders said the trading was thin due to a U.S. holiday.

Turkey's main share index closed up 0.08 percent at 67,435 points, outperforming a 1.18 percent fall in the emerging markets index .

Turkish markets shrugged off an International Monetary Fund statement saying Turkey was continuing to face some considerable risks given the large current account deficit and the volatile nature of global capital flows in an uncertain external environment.

(Writing by Seltem Iyigun; editing by Ron Askew)

((seltem.iyigun@thomsonreuters.com)(+90 212 350 70 62)(Reuters Messaging: seltem.iyigun.thomsonreuters.com@reuters.net))

Keywords: MARKETS TURKEY/CLOSE