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RTRS:Turkish assets steady as cbank raises dollar sales
 
Nov 11 (Reuters) - Turkish assets held steady on Monday, supported by additional monetary tightening from the Turkish central bank that helped offset increased expectations that the U.S. Federal Reserve may soon begin scaling back its stimulus.

Turkey is susceptible to any tightening in global liquidity conditions because it relies on capital inflows to finance its large current account deficit.

The Turkish central bank will implement additional monetary tightening for two days starting on Monday in support of the lira, raising the minimum forex-selling auction amount to $160 million from $100 million.

Market expectations of Fed tapering - scaling back of its $85 billion monthly stimulus scheme - have increased after better-than-expected U.S. jobs data last Friday suggested October's partial government shutdown did not make a large dent in the world's largest economy.

A delay in Fed tapering has given Turkey's central bank breathing room and allowed it to avoid interest rate hikes to support the lira in favour of less orthodox dollar sales and repo cancellations.

The lira firmed to 2.03356 to the dollar by 0909 GMT from nine-week lows of 2.0480 late on Friday.

"We think the Central Bank of Turkey will stick to its current stance and is unlikely to tighten liquidity further from here," said Erkin Isik, a strategist at TEB-BNP Paribas.

"The market will likely wait for (the Federal Reserve's Ben) Bernanke and (Janet) Yellen for any further clues on Fed policy and remain on the sidelines for now."

Turkey's 10-year benchmark bond yield was virtually unchanged at 9.10 percent, with low volume due to a holiday in the United States.

The main Istanbul share index was up 0.12 percent at 74,034.88 points, outperforming the broader emerging markets index, which fell 0.02 percent. (Reporting by Seda Sezer; Editing by Gareth Jones)
Source