The lira, which depreciated following the Central Bank's shift in monetary policy in November 2010, stabilised in early March 2011 and went on to recover some of its value in late March and early April. The lira recovered most noticeably against the US dollar, which weakened against the euro. On April 8th the lira traded at TL1.51:US$1 and TL2.17:EUR1. This compares with strong points of TL1.39:US$1 and TL1.94:EUR1 in early November 2010, when the lira was very strong by historical standards, and weak points of TL1.62:US$1 and TL2.24:EUR1 in the first week of March 2011.

Share prices on the Istanbul Stock Exchange (ISE) stabilised in March, following a bout of weakness at the end of February, and rose further in early April. On March 2nd, the main National-100 index had closed as low as 58,664 points, amid concerns about events in the Middle East, the impact of Central Bank policy on bank profits and a Competition Board investigation into the banks. In the last three weeks of March, however, the index recovered to hover at 63,000-65,000 points-similar to the level which prevailed for much of January and February. The Central Bank's surprise decision to raise banks' reserve requirements further caused the index to shed 1,655 points on March 23rd, when it closed at 63,220 points. At the close on April 19th, it had recovered to 67,742, still below the peak of 71,543 recorded on November 9th 2010.

The yield on the most-traded government bond, maturing in November 2012, has remained well above its level of about 7% in early January 2011. In March it rose to close to 9% following the announced reserve requirement ratio hikes in late March, which were interpreted as a sign of steeper than expected policy rate rises later in the year. The yield subsequently eased to 8.6% in early April following the release of lower than expected March inflation figures-seen as reducing the likelihood of sharp rate rises.

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