Turkish lira, shares rise on CB’s promise

The Turkish lira firmed on Wednesday to close to a 2-1/2 month high, underpinned by the central bank’s (CB) promise to keep monetary policy tight and a manufacturing survey that showed growth slowing to more manageable levels.The lira traded at 1.7708 versus the dollar compared with 1.7720 in late trade on Tuesday. The lira touched its strongest level since mid-November at 1.7673 a day earlier after the central bank raised its forecast for inflation at the end of 2012 to 6.5 per cent from a previous 5.2 per cent.“Despite the lira weakening after the market’s close on Tuesday due to deterioration of global sentiment, it still remains strong as the central bank said it would keep tight and flexible monetary policy for a while,” said Erdinc Mogol, manager of treasury marketing unit at Akbank. “The lira is trading stronger than its emerging peers as investors are now convinced that the central bank’ wouldn’t allow a further depreciation of the currency,” Mogol added. Against its euro-dollar currency basket, the lira stood at 2.0459, stronger compared with 2.0494 in late trade on Tuesday.A central bank policy mix that has used a wide range of instruments has been aimed at capping a surge in the current account deficit and preventing the economy from overheating.