Turkish lira eases, bonds up as industrial output dips

ISTANBUL, Oct 9 (Reuters) - The Turkish lira was slightlyweaker and bond yields inched down on Tuesday as a surprise fallin August industrial output and a cut in official growthforecasts suggested the central bank will keep monetary policyloose for longer.

Turkish industrial production fell 1.5 percent year-on-yearin August, data from the Turkish Statistics Institute showed onTuesday, confounding a Reuters poll forecast for a 2.5 percentrise.

Turkey's government meanwhile cut its growth forecast for2012 on Tuesday to 3.2 percent from 4 percent, and its 2013projection to 4 percent from 5 percent.

By 1451 GMT, the lira had weakened to 1.8180 against thedollar , from 1.8115 late on Monday. Against itseuro-dollar basket , the lira eased to 2.0814,from 2.0802.

The central bank cut its overnight lending rate by 150 basispoints to 10 percent in September and hinted it could furtherease to support a slowing economy.

The yield on Turkey's two-year benchmark bond

closed at 7.63 percent, slightly down fromMonday's close at 7.68 percent.

Turkey's main share index closed up 0.93 percent68,062 points, outperforming a 0.01 percent fall in the emergingmarkets index . Buying in shares accelerated as theindex avoided a fall to below 67,500 points, which is animportant technical level, analysts said.

(Writing by Seltem Iyigun; Editing by Catherine Evans)

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


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