Turkish lira firms, bond yields up after energy price hikes

ISTANBUL, Oct 1 (Reuters) - The Turkish lira firmed and bond yields inched up on Monday after a hike in natural gas and electricity prices raised expectations of higher inflation.

State energy company Botas said on Sunday that natural gas prices for consumers would rise by 9.8 percent due to increasing global energy costs.

Turkey's energy market watchdog EPDK said on Monday that electricity prices would rise for industry by 4 percent and for households by 9.8 percent.

The yield on Turkey's two-year benchmark bond

closed at 7.60 percent, up from 7.56 percent late on Friday.

Gizem Oztok Altinsac, economist at Garanti Securities, estimated the energy price hikes would add 0.45 basis points to inflation.

National inflation figures for September will be released on Wednesday. Annual inflation in August was about 9 percent, declining from above 11 percent in April. The central bank's inflation target is 5 percent for 2012 and 2013.

The lira firmed against the dollar to 1.7911 from 1.7969 late on Friday and against its euro-dollar basket

to 2.0517 from 2.0533.

The main share index closed 0.54 percent up at 66,754 points, slightly outperforming a rise of 0.33 percent in the MSCI emerging markets index .

(Writing by Seltem Iyigun; Editing by Nick Tattersall)

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