Loose economic policy has helped Turkey and its related exchange traded fund (ETF). Thanks to a round of efforts aimed at reviving its economy, the Turkey ETF was one of last week’s top performers.

The Turkish Central Bank cut its benchmark overnight borrowing to a record 7.75% low last  Tuesday, and further cuts will be necessary if no signs of a robust economic recovery occur, reports Nevzat Devranoglu for Forbes.

The yield on the benchmark bond hit a fresh low of around 9.6%. However, interest rate expectations have been lowered to about 6.5%-6.75%.

Turkey’s market index has been driven up by the help of the banking sector, which make up around 40% of the market. Bank earnings have been bolstered by a series of rate cuts that has reduced interest on customers’ deposits as lending rates remain high.

The Turkish economy shrank 13.8% in the first quarter year-over-year, as tax revenue receded because of a 23% fall in industrial production and rising unemployment, writes Joe Parkinson for The Wall Street Journal. Turkey’s GDP is projected to drop 10% this year.

Economists think Turkey may not need to ask for assistance from the IMF after a successful round of government bond auctions. Another sign of optimism for the Turkish economy came as Germany and France, the two largest export markets for Turkey in the eurozone, have returned to growth.

• iShares MSCI Turkey Invest Mkt Index (TUR): up 83.9% year-to-date

For more information on Turkey, visit our Turkey category.

Max Chen contributed to this article.

Tags: Eastern Europe, Emerging Europe, Global ETFs, Middle East, TUR, Turkey