* Turkish PM moots Facebook, YouTube ban amid leaked
* EMs unsettled by lack of progress in resolving Ukrainian
* Turkish Airlines posts 41 pct decline in y-o-y net profit
By Dasha Afanasieva
ISTANBUL, March 7 The Turkish lira slipped on
Friday, rattled by Prime Minister Tayyip Erdogan's comments on
website bans being an option amid attacks from his political
foes and as the Ukrainian crisis continued to weigh on emerging
Late on Thursday, Erdogan said Turkey could ban Facebook
and YouTube after local elections on March 30, saying
they have been abused by his political enemies with a series of
voice recordings posted on the Internet purportedly revealing
graft in his inner circle.
A series of public challenges to the ruling AK Party have
emerged since the launch of a corruption probe on Dec. 17,
exposing a deep rift between Erdogan and former ally, U.S.-based
cleric Fethullah Gulen and rattling investors.
"We can attribute the lira's negative differentiation to
the politics, namely the prime minister's remarks from last
night which is seen to indicate that political tension will
remain elevated even after the local elections," said Gokce
Celik, analyst at Finansbank.
The political crisis in Ukraine capped gains in emerging
markets after Russian President Vladimir Putin said Moscow and
Washington were still far apart on the situation in Turkey's
"With vulnerabilities such as large external balances and
political risks, Turkish assets tend to react more negatively
when emerging market sentiment deteriorates," Celik said.
The lira slipped to 2.1890 against the dollar by
0935 GMT from 2.1825 late on Thursday. The 10-year benchmark
bond yield rose to 10.6 percent from 10.54
percent on Thursday.
The main Istanbul share index was up 0.18 percent
at 64,119.97 points, underperforming the wider emerging markets
index, which rose 0.17 percent.
The biggest drag on the index came from flag carrier Turkish
Airlines which posted a net profit of 683 million
lira ($313 million) in 2013, down 41 percent from a year earlier
and sharply below an average forecast of 947 million lira in a
Meanwhile airports operator TAV Havalimanlari Holding
got a boost after saying it will bid for the tender
of Dalaman Airport operating rights on Friday.
In addition, investors were cautious ahead of the U.S. non
farm payrolls report (1330 GMT), which was forecast to show an
increase of around 149,000 in February, according to a Reuters
survey of economists, up from the weather-depressed gains of
113,000 in January and 75,000 in December.
Jobs data from the world's biggest economy is eyed closely
by emerging markets for any clues on the pace of Federal Reserve
tapering. Turkey is vulnerable to cuts in asset buying because
of its gaping current account deficit, which is financed through
cheap capital inflows.
Last month Fed chair Janet Yellen made it clear she would
not make any abrupt changes to U.S. monetary policy, saying the
central bank was on track to keep reducing its stimulus even
though the labour market recovery was far from complete.
"The importance of the non farm payroll, on its own, has
diminished since the tapering actually started, but it is still
a closely watched indicator," Celik said.