Türkiye’s Central Bank Hikes Interest Rates Again

FILE - A seller attends a client in a street market at Eminonu commercial area in Istanbul, Turkey, on, June 7, 2023. (AP Photo/Francisco Seco, File)
FILE - A seller attends a client in a street market at Eminonu commercial area in Istanbul, Turkey, on, June 7, 2023. (AP Photo/Francisco Seco, File)
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Türkiye’s Central Bank Hikes Interest Rates Again

FILE - A seller attends a client in a street market at Eminonu commercial area in Istanbul, Turkey, on, June 7, 2023. (AP Photo/Francisco Seco, File)
FILE - A seller attends a client in a street market at Eminonu commercial area in Istanbul, Turkey, on, June 7, 2023. (AP Photo/Francisco Seco, File)

Türkiye’s central bank raised its key interest rate by 5 percentage points Thursday, another large but expected hike that signals a continued push toward more traditional economic policies under President Recep Tayyip Erdogan.

The bank hiked its policy rate to 30%, saying it has kept up the “monetary tightening process” to combat rampant inflation and control price instability. Its statement said inflation in July and August was “above expectations," hitting 58.94% last month.

It takes Türkiye into a more typical economic approach after critics blamed a series of rate cuts set by Erdogan for making a cost-of-living crisis worse. Turkish households were left struggling to afford rent and basic goods as inflation surged.

Erdogan has long argued that lowering interest rates helps fight inflation, a theory that runs contrary to traditional economic thinking. The Turkish central bank started cutting rates in late 2021 under pressure from Erdogan.

Central banks around the world, meanwhile, have been hiking rates to bring consumer price rises under control following the COVID-19 pandemic and Russia’s war in Ukraine. Now, banks from the US Federal Reserve to Bank of England are hitting pause as they near the end of their aggressive increases.
Türkiye has work to do to catch up in its fight against inflation, The Associated Press reported.

After winning reelection in May, Erdogan appointed a new economic team, signaling a return to more conventional policies.

The team includes former Merrill Lynch banker Mehmet Simsek, who returned as finance minister, a post he held until 2018, and Hafize Gaye Erkan who took over as central bank governor.

Before their appointments, the central bank had cut its key interest rate from around 19% in 2021 to 8.5% earlier this year. Erdogan has fired three central bank governors who resisted pressure to cut rates before appointing Erkan’s predecessor in 2021.

Economists say Erdogan’s unorthodox policies exacerbated economic turmoil, leading to currency and cost-of-living crises that have brought hardship to households. Erdogan insists his economic model stimulates growth, exports and employment.

Following Erkan’s appointment, the bank has raised its key rate a series of time: by an aggressive 7.5 percentage points in August, 2.5 percentage points in July and 6.5 percentage points in June.



Fire, Smoke Upend Western Canada’s Summer Tourism Season

 A helicopter works a forest fire outside of Jasper, Alberta, Canada, on Friday July 26, 2024. (Reuters)
A helicopter works a forest fire outside of Jasper, Alberta, Canada, on Friday July 26, 2024. (Reuters)
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Fire, Smoke Upend Western Canada’s Summer Tourism Season

 A helicopter works a forest fire outside of Jasper, Alberta, Canada, on Friday July 26, 2024. (Reuters)
A helicopter works a forest fire outside of Jasper, Alberta, Canada, on Friday July 26, 2024. (Reuters)

Severe wildfire seasons are increasingly hurting western Canada's lucrative tourism industry, with some visitors beginning to avoid the busy late-summer months due to concerns about uncontrolled blazes, smoke-filled skies and road closures.

After a scorching start to July, nearly 600 wildfires are now ablaze across British Columbia and Alberta, including a huge fire that this week devastated the picturesque tourist town of Jasper in the Canadian Rockies.

Dozens of communities, including popular holiday spots in British Columbia's Kootenay region, are under evacuation orders and several highways are closed.

This year's surge in wildfire activity comes after Canada endured its worst-ever year for wildfires in 2023, when more than 15 million hectares (37 million acres) burned, including parts of the city of West Kelowna in the heart of British Columbia's wine region.

Ellen Walker-Matthews, head of the Thompson Okanagan Tourism Association, said the industry was seeing a lot more last-minute travel decisions instead of booking in advance.

"It's a huge blow. July and August are traditionally the busiest months in the region," said Walker-Matthews, adding that while her region has been relatively unscathed by wildfires this summer, some visitors are choosing to avoid interior British Columbia altogether.

The members of the British Columbia Lodging and Campgrounds Association are reporting a 5-15% drop in bookings from a year ago, with the biggest declines coming from the hotter Okanagan and Cariboo regions, said Joss Penny, who heads the association.

"The concern is that this is something we have to live with and we have it every year now," said Penny.

Although wildfires in Canada's forests are natural and common, scientists say drier, hotter conditions fueled by climate change are leading to more volatile and frequent blazes.

'SMOKEY SKIES'

Some events, like the Salmon Arm Roots and Blues Festival, usually held in August, have now been rescheduled to earlier in the summer to avoid what is now seen as peak smoke season. The festival, which was cancelled last year due to nearby wildfires, was this year moved to July to benefit from "less smokey skies."

Wildfires and extreme climatic events are prompting tourists to "change their plans not just temporarily, but permanently," said Elizabeth Halpenny, a tourism researcher and professor at the University of Alberta, noting that seasonal workers in the sector are often the hardest hit as they have few protections during a bad season or amid a cataclysmic fire.

Tourism contributed C$7.2 billion to the British Columbia economy in 2022, and C$9.9 billion to Alberta in 2023, according to the latest government data.

Jasper National Park is one of Canada's premier tourist destinations, with more than 2 million visitors a year flocking to see its pristine mountain landscapes and abundant wildlife, including grizzly bears, moose and elk.

Kelly Torrens, vice-president of product at international tour company Kensington Tours, described western Canada as a bucket-list destination. But the company now has 49 trips that were supposed to pass through Jasper this season in limbo. Six others were forced to evacuate the park when the fire hit.

Parks Canada has cancelled all camping reservations within Jasper National Park until Aug. 6 and with potentially 50% of the town's structures destroyed by fire, the cleanup and rebuild could take years.

Halpenny is among those hedging their bets.

"I've booked a campsite stay in the mountain parks but at the same time, I booked a campsite out on the prairie somewhere and that's my backup plan because I don't want to miss out on my vacation with my family."