July 11, 2018 / 11:33 AM / a year ago

Turkey dollar bonds fall, yield spreads rises

LONDON, July 11 (Reuters) - Turkish sovereign dollar bonds extended their falls on Wednesday in the wake of President Tayyip Erdogan’s moves to cement his power and with data showing the current account deficit widened more than expected in May adding to the pressure.

Longer-dated dollar-denominated bonds fell over 1 cent according to Tradeweb data, with the March 2036 issue down 1.1 cents to 91.7 cents in the dollar, the lowest level since mid-June. The February 2045 issue also fell 1.1 cents to 86.4 cents.

The average yield spread paid by Turkish dollar bonds over U.S. Treasuries on the JPMorgan EMBI Global Diversified index rose by 8 basis points (bps) to 434 bps, the highest since June 20.

Erdogan appointed his son-on-law as finance minister on Monday evening, rattling investors who are concerned about double-digit inflation and imbalances in the economy.

Reporting by Claire Milhench, editing by Karin Strohecker

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