GeriGündem Turmoil’s effect likely to increase in Turkish markets
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Turmoil’s effect likely to increase in Turkish markets

Turmoil’s effect likely to increase in Turkish markets
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The Turkish lira had the biggest weekly decline against the dollar in more than two months after the Constitutional Court's verdict on Thursday to annul the headscarf bill fueled the expectation of the ruling AKP might be banned.

Later the positive global trend helped Turkish financial markets recover from the early losses on Friday. The negative employement data from the U.S., however, has deteroiated the sentiment in the global markets and this expected to continue on Monday as well.              

Another effect, which is likely to put more pressure on Turkish markets, is the record high oil prices. Crude oil hit 139 dollars a barrel on Friday.

The lira fell to a two-week low on Friday after Turkey's Constitutional Court annuled the bill lifting the headscarf ban in universities, saying it violated the secularism principles of the Constitution.   

The lira fell 2 percent, the most since the week ending March 28, to 1.2426 per dollar. It earlier dropped to 1.2452 per dollar, the lowest level since May 27. Turkish government bonds fell, pushing yields to over 20 percent to an 18-month high.

Some analysts say lira's fall is limited. "I think the downside to the lira is limited because it has already depreciated a lot against the trade- weighted currency basket and because high interest rates provide support," Serhan Cevik, an economist at Nomura International Plc in London, quoted as saying by Bloomberg on Saturday. Turkey's 15.75 percent main rate is tied for the highest in Europe with Serbia.

Even the interest rates supported lira against dollar and limited the negative effect of the U.S. unemployement rate surging oil price, the markets are expected to open in a downtrend on Monday. The unemployement rate in the U.S. hit 5.5 percent, highest in 22 years.

Crude oil surged more than $10 a barrel to an all-time high $139.12 on Friday as the dollar weakened after the U.S. unemployment rate grew the most in two decades and Morgan Stanley said prices may reach $150 within a month.


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