Turkish lira rises sharply against US dollar

ANKARA

The Turkish lira has rebounded against the dollar on Friday as traders shrugged of the effects of the interest rate increase by the U.S. Federal Reserve on Wednesday.

In early morning trading Friday, the lira rebounded from about 2.954 to as high as 2.920 to the U.S. currency.

The Turkish lira seems to be holding at the 2.92 level, although on Wednesday night it rose as high as 2.91.

Meanwhile, the euro and the Japanese yen both dropped sharply lower against the U.S. dollar.

"We are looking at a more stable year in terms of currency volatility," commented Bora Tamer Yilmaz, an economist with Ziraat Securities in a note published Wednesday.

Analysts at the Swiss bank Dukascopy said that the lira has continued a bullish trend since the beginning of December, and that the currency could soon test the 2.90 level.

"Turkey has been showing upside growth surprises from third-quarter data and PMIs [Purchasing Managers Index] have been either steady or improving," Nomura credit strategist Tim Ash said in a note published Monday. Ash praises Turkey's solid fundamentals, its stable fiscal policy and declining currency account deficit.