Basci Breakeven Rates Show Inflation Targets Beyond Reach: Turkey Credit
By Steve Bryant - Mar 1, 2012 5:00 PM ET
Bondholders are losing confidence in central bank Governor Erdem Basci’s ability to meet his target of cutting the highest inflation rate among major economies in half.
While Basci says consumer price gains will slow to 5.1 percent by the end of 2013, investors raised projections to 6.9 percent from 6.5 percent on Feb. 21 as the central bank lifted borrowing costs for a second time this year, based on the gap between fixed-rate bonds and those paying returns tied to inflation known as the breakeven rate. Bets on rising consumer costs made Turkey’s inflation-linked bonds the best performers after Italy this month, according to data compiled by Bank of America Merrill Lynch.
More:Basci Breakeven Rates Show Inflation Targets Beyond Reach: Turkey Credit - Bloomberg
