NEWS / Foreign Exchange

Turks protest as Gul refuses to drop presidential bid

Hundreds of thousands of people took to the streets of Istanbul to protest the government's nominee for the presidency,a candidate that Turkey's army has threatened to block because of his Islamist roots.

Foreign Minister Abdullah Gul, who came within 10 votes of winning the presidency in a parliamentary ballot April 27, today said he will stand in a second round May 2. Turkish generals, who have led three coups since 1960, warned after the vote they had an ???unshakeable determination??? to defend Turkey's secularism.

???The presidency is secular and will remain secular,???protesters chanted on the streets of Turkey's biggest city today.The police said at least 100,000 had gathered on a central square, while the NTV news channel said hundreds of thousands. A crowd of half a million attended a similar protest in the capital Ankara two weeks ago.

Turkish secularists, led by the military, say Gul and his party may weaken state secularism, established eight decades ago after the Ottoman Empire collapsed. The army's interference may hurt the country's bid to join the European Union, a process that has attracted record foreign investment.

USDTRY bid on this story. Closed 1.3350, first trade 1.3475 paid this morning. High around 1.3700.

China tells banks to set aside more money as reserves

China ordered banks to set aside more money as reserves for the seventh time in 11 months to try to prevent the world's fastest-growing major economy from overheating.

Lenders must put aside 11 % of deposits starting May 15th, up from 10.5 %, the central bank said on its Web site.

Premier Wen Jiabao is trying to stop a flood of cash from an export boom from fueling wasteful investment, inflation and a stock market bubble. China's benchmark share index has rebounded 41 % after the February 27th plunge that sparked a global equities rout.

???The next steps for the central bank are to raise interest rates and allow the yuan to appreciate faster, possibly by widening the trading band,??? said Huang Haizhou, an economist at Barclays Capital in Hong Kong. ???The tightening so far has done little to curb liquidity.???

Each 0.5 percentage point increase in reserve requirements removes about 170 billion yuan from the financial system. Local-currency deposits stood at 35.42 trillion yuan at March 31.

USDJPY opened at 119.49 and was trading between 119.15 and 119.63 in Far East.