Turkish bond yields and interest rates fall to record low

Turkish bond yields fell to the lowest level on record on speculation and the Central Bank cut interest rates an additional 50 basis points.  A third day of bond gains pushed the average yield down as much as 22 basis points 9.85 percent, the lowest level since ABN Amro Holding’s index began in 2004.  Economists expect the Turkish Central Bank to reduce the key rate by another 50 basis points on Aug. 18 as the economy faces its deepest recession in more than two decades.  Stocks have rallied as report showed the German and French economies unexpectedly grew in the second quarter and the Federal Reserve said a U.S. recovery is under way.

The Central Bank is looking to continue to cut interest rates to sustain the current pace and sweep of economic recovery. The Central Bank judges the risk of inflation as minimal over the next several months, and many economists expect further interest rate cuts enroute to a 7 percent target.

Source: Hurriyet Daily

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