Fall in Turkey’s bond yields gained momentum

Increasing worldwide recession concerns and inflationary concerns and expectations that central banks will continue their aggressive monetary policies accelerate the escape from risky assets.

Domestically, interest in the bond market continues with the supportive monetary policy implemented and the measures taken by the economy administration. In this context, the compound interest rate of the 10-year benchmark bond in Turkey continues its downward trend since March.

The compound interest rate of the long-term benchmark bond, which saw 28.56 percent in March, entered a downward trend after this period. The compound interest rate of the 10-year benchmark bond, which closed the 5th month in a row with a decline, saw its lowest level since June 2020 with 11.76 percent today.

The compound interest rate of the short-term benchmark bond decreased from the highest level of the year it saw with 28.28 percent in June, to 13.72 percent today. Thus, the compound interest rate of the short-term benchmark bond hit the lowest level since November 2020.

Looking from the beginning of the year; In Turkey, the compound interest rate of long-term bonds decreased by approximately 13 points and the compound interest rate of short-term benchmark bonds decreased by approximately 10 points.

Analysts stated that in addition to the ongoing risks such as global epidemic and war, inflationary concerns continue, and that bond interests are on the rise worldwide with these developments.

The US 10-year bond yield was 3.35 percent from June 16, and the UK’s 10-year bond yield was 3.11 percent, the highest level since July 2011.

Analysts, who stated that the interest in TL assets in Turkey continued, noted that the decrease in bond rates was effective especially in the Central Bank of the Republic of Turkey’s (CBRT) policy rate cut by 100 basis points in the last meeting and the increasing bond demand of the banking sector with the announced macro prudential measures.




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