* Lira weaker as companies demand dollars
* Yields slightly up on profit taking, shares flat
* Markets neutral to PM Erdogan's comment on rates (Adds fresh quotes, inflation/export data, PM's comments)
ISTANBUL, March 1 (Reuters) - The Turkish lira extended losses on Thursday due to strong demand for dollars from local companies and bond prices fell on profit taking after data gave mixed signals on inflation.
By 1747 GMT, the lira stood at 1.7555 versus the dollar, weaker than 1.7460 in late trade on Wednesday.
The Turkish currency had firmed below 1.7400 versus the greenback on Wednesday after a dip in oil prices eased worries about Turkey's current account deficit and the European Central Bank's offer of half-a-trillion euros of cheap loans to banks boosted global risk appetite.
"The lira underperformed its peers today due to local companies' dollar buying. The euro's fall also contributed to its weakness," said the head of forex at one bank.
Turkish companies need to buy dollars to pay their import bills.
"As long as the central bank continues to signal further monetary easing, the lira will continue to decouple negatively from its peers," he added.
Turkey's central bank cut its lending rate by 100 basis points to 11.5 percent this month and increased lira liquidity through one-month repo auctions.
Against its euro-dollar basket the lira stood at 2.0468, compared with 2.0397 in late trade on Tuesday.
Turkey's exports jumped 10.4 percent year-on-year in February to $11.16 billion, the Turkish Exporters Assembly (TIM) said on Thursday.
"We continue to see a similar export performance persisting throughout the year. We continue to estimate that Turkey's exports will reach $155 billion in 2012," wrote Ozgur Altug, chief economist at BGC Partners. Turkish exports totalled $135 billion in 2011.
The strong export performance, at a time when Turkey's main trading partners in Europe looked to be heading into recession, was due to diversification to other markets, analysts said.
Retail prices in Turkey's largest city Istanbul rose 0.84 percent month-on-month in February, while wholesale prices declined 0.17 percent, the Istanbul Chamber of Commerce said on Thursday.
"While the relatively mild monthly change in food prices seems to be encouraging, we observe relatively sizeable increases in housing prices ... and a sharp increase in transportation," Ozgur Altug said, adding that the data provided mixed signals about February inflation.
Turkey's inflation stood at 10.6 percent in January, more than double the central bank's year-end target of 5 percent.
The yield on Turkey's two-year benchmark bond closed at 9.23 percent, up from a previous close of 9.13 percent, mainly because of profit taking on bonds after the European liquidity operation. Bond prices move inversely to yields.
The main Istanbul stock index closed virtually unchanged at 60,725.88 points, outperforming a 0.4 percent drop in the MSCI emerging markets index.
Turkish markets shrugged off comments by Prime Minister Tayyip Erdogan that interest rates were at a high level and they must decline. (Writing by Seltem Iyigun; Editing by Susan Fenton)