June 9, 2020 / 7:39 AM / a month ago

UPDATE 1-Turkey agrees Euroclear deal for wider access to local bond market

(Adds euroclear statement, finance minister comment)

ISTANBUL, June 9 (Reuters) - Turkey's Treasury said on Tuesday that it had reached a deal with the international central securities depository Euroclear Bank to enable greater investor access to local government bond market.

The agreement, which follows a sharp fall in non-resident holdings of Turkish government bonds, increases international investor access to Turkish lira, euro, dollar and gold denominated local government debt issues, the treasury said.

Euroclear Bank said that with the agreement Turkey was launching a euroclearable link and could benefit from access to wider liquidity pools while also reducing overall volatility of borrowing costs.

Turkish Finance Minister Berat Albayrak said the agreement marked a milestone in Turkish capital markets and was important for continued development of the country's debt market.

"By making our TL, USD, EUR and gold denominated domestic borrowings entirely 'Euroclearable' we have further aligned our capital market framework with the globally recognized standards," Albayrak said.

Non-resident holdings of local government bonds dropped to $7.1 billion at the end of May from $14.8 billion at the end of 2019. (Writing by Ezgi Erkoyun Editing by Dominic Evans)

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