July 12, 2018 / 8:37 AM / 4 months ago

Turkey dollar bonds fall after Erdogan interest rate comments

LONDON, July 12 (Reuters) - Turkish sovereign dollar bonds fell across the curve on Thursday after President Tayyip Erdogan’s comments on interest rates rattled investors concerned about how Turkey will tackle its stubbornly high, double-digit inflation.

The 2036 issue was down 0.7 cents to 90.4 cents - its lowest since June 19, according to Tradeweb. The 2034 eurobond lost 0.6 cents to trade at 101.1 cents, a three-week low.

Erdogan told a newspaper that interest rates would fall “in the period ahead”, adding to fears about the direction of monetary policy in a country with an overheating economy.

Erdogan’s son-in-law Berat Albayrak, the new finance minister, said Turkey would take steps to bring down inflation, but also warned that speculation about the central bank’s independence was “unacceptable”. (Reporting by Claire Milhench, editing by Karin Strohecker)

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