Turkish currency benefits from rise in production
Posted by meb at January 9th, 2008
The Turkish lira climbs to to a six-and-a-half year high against US dollar, partly due to Turkey’s industrial output increase. This is the 22md consecutive rise, according to the statistical institure, and it owes much to a surge in exports.
Turkish industrial production rose 7.7 percent in November, the 22nd consecutive increase, driven by record levels of exports. The pace of industrial growth has slowed from a revised 8.3 percent in October, the Turkish Statistical Institute (TÜİK) in Ankara said on its Web site yesterday. Output was expected to increase 4.6 percent, according to the median estimate from 11 economists polled by Bloomberg. Turkish sales abroad jumped to $11.3 billion in November, the most in a single month and a 30 percent increase over the same month one year earlier. Exports grew 26 percent in the 11 months leading up to November, helping to maintain Turkish economic growth after droughts cut farm production. “Manufacturing for export is a major factor driving production,” said Pelin Yenigün, economist for lender Garanti Bank in Istanbul. “We think growth in the fourth quarter will be stronger than the third; we forecast a full-year gross domestic product (GDP) growth of 4.5 percent,” Yenigün said. GDP growth slowed to 1.5 percent in the third quarter of this year, the lowest rate in more than five years, from 4.1 percent three months earlier and 6.9 percent in the first quarter. Almost 60 percent of Turkey’s exports go to Europe. The economy of the 13 countries that share the euro grew an annual 2.6 percent in the third quarter, up from 2.5 percent in the previous period.
Turkish currency rises
Meanwhile, the Turkish lira (YTL) climbed to a six-and-a-half year high against the U.S. dollar as industrial production increased more than analysts expected and rising stocks signaled investors are switching to higher-yielding emerging-market currencies. The YTL rose against all 17 most active currencies following a TÜİK announcement.
“The industrial production data certainly helps the YTL,” said Jon Harrison, an emerging-market currency strategist at Dresdner Kleinwort in London. “The day is also generally positive for carry-trade currencies. There is favorable risk appetite,” Harrison said. The YTL, the second best-performing emerging-market currency against the dollar last year, rose 0.9 percent to 1.1596 per dollar in early afternoon in Ankara, the highest since June 2001. The Turkish currency also gained 0.9 percent to 1.7055 per euro. “The YTL is one of the currencies we would identify as attractive for investment this year because of structural convergence and high carry, with interest rates likely to remain high,” said Harrison, who expects the YTL to remain near current levels in the next months.
source: Bloomberg – ANKARA / WARSAW
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