100 Turkish Lira. Mohammed Elshamy - Anadolu
The Turkish lira pushed higher against the dollar for a second day as investors waited for the government to announce its annual economic road-map on Thursday.
The battered currency has stabilized after the central bank hiked rates last week, with investors now looking for signs of further policy action. Treasury and Finance Minister Berat Albayrak will present the plan at a press conference at 11 a.m. in Istanbul, state-run Anadolu Agency reported.
The three-year program -- which includes forecasts for key economic indicators such as inflation, growth, budget and current account deficits -- carries extra weight for markets this year. Investors will be looking for authorities to commit to tighter fiscal policy, and any plan to shore up the country’s banks.
"Front and center has to be evidence the government gets the challenges in the banks,” said Timothy Ash, a strategist at BlueBay Asset Management in London. "The urgent need from the authorities is to be open about the problem, and through innovative solutions like a bad bank, help banks clean up their balance sheets.”
The currency gained 0.6 percent to 6.2134 per dollar as of 10:50 a.m. in Istanbul. It has slipped almost 1 percent this week after rallying last Thursday when the monetary authority jacked up the one-week repo rate by 625 basis points to 24 percent.
Months of runaway growth has compounded a 40 percent slide in the Turkish lira this year, fueling double-digit inflation and piling pressure on companies that have borrowed heavily in foreign currency. The rout is also raising concern over a build-up of bad loans at the nation’s lenders.
The government will unveil measures to help banks tackle the problem and propose transferring non-performing loans to a state-designated entity, people with knowledge of the matter said.
