Turkish house sales tumble 25% year-on-year in January

Lira weakens after central bank move on lira reserves

ISTANBUL, Feb 18, (RTRS): Turkish house sales plunged 24.8 percent year-on-year in January to 72,937 properties, data from the Turkish Statistical Institute showed on Monday.

In December, house sales had increased 2.9 percent from a year earlier, with sales last year as a whole dipping 2.4 percent.

Meanwhile, the Turkish lira eased nearly 1 percent on Monday after a central bank decision to lower lira reserve requirements, which triggered concerns that it may augur an easing in monetary policy.

The lira lost nearly 30 percent of its value against the dollar last year, partly on concerns about political pressure on the central bank (CBRT) to ease policy, but has rebounded partially from record lows which it hit in August.

At 0830 GMT, the lira stood at 5.3120, weakening from a close of 5.27

on Friday.

On Saturday, the bank said lira reserve ratios were cut by 100 basis points for deposits and participation funds with maturities up to one year and for other liabilities with maturities up to, and including, three years.

“It’s hardly enough to make a significant impact in terms of liquidity but could be quite damaging in terms of undermining

the perception that it is hawkish and in rebuilding the CBRT’s lost credibility, said Timothy Ash of BlueBay Asset Management.

The move is expected to release 3.3 billion lira ($624 million) and $2.3 billion of liquidity in the banking system, bankers said on Monday.

Governor Murat Cetinkaya said on Thursday the bank may take measures to

ease liquidity, but that should not be read as a change in the tight monetary policy that it will keep until it sees a clear inflation decline.

Separately on Friday, Standard and Poor’s affirmed Turkey’s sovereign ratings with a stable outlook, adding that the ratings could be lowered if it sees an increased likelihood of a systemic distress in the banking system.