Turkish bond yields dropped to their lowest level in three weeks as the prospect of an interest rate cut fuelled confidence among investors.

Meanwhile Turkish shares surged on Friday after strong first quarter results were posted by several companies, including lender Akbank and insurance firm Anadolu Sigorta.

Erkan Dernek, a market strategist at Odeabank, told Reuters that the increased likelihood of a central bank interest rate cut had boosted Turkish equities and overall business sentiment.

"First quarter results, especially of banks, have supported the positive sentiment while (central bank governor Erdem) Basci's comments regarding potential rate cuts have also been equity positive," he said.

Basci sparked the rally on Wednesday when he said he would consider cutting borrowing costs if the country's risk premium decline sticks and inflation outlooks improves.

Turkey's central bank has been under political pressure from the country's Prime Minister Recap Tayyip Erdogan whose AKParty prevailed in local elections at the start of the month. He has spoken out against the bank's decision to increase rates in January, as the bank moved to protect the Turkish lira.

The PM called on Basci to cut rates in early April while Turkey's economy minister said inflation was not very important on April 30.

Despite the political pressure, Basci has reiterated that the central bank's independence is not under threat.