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Türkiye: New Central Bank Chief Pledges to Maintain Tight Policy

A man walks amid apartment buildings of the Maltepe district, Istanbul, Turkey, 03 April 2023. (Issued 05 February 2024) EPA/ERDEM SAHIN
A man walks amid apartment buildings of the Maltepe district, Istanbul, Turkey, 03 April 2023. (Issued 05 February 2024) EPA/ERDEM SAHIN
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Türkiye: New Central Bank Chief Pledges to Maintain Tight Policy

A man walks amid apartment buildings of the Maltepe district, Istanbul, Turkey, 03 April 2023. (Issued 05 February 2024) EPA/ERDEM SAHIN
A man walks amid apartment buildings of the Maltepe district, Istanbul, Turkey, 03 April 2023. (Issued 05 February 2024) EPA/ERDEM SAHIN

The new head of Türkiye's central bank said on Thursday the bank will maintain its tight policy stance until inflation drops to target, as it held its year-end consumer price forecast at 36% despite some expectations it would need to rise.
Presenting a quarterly inflation report in Ankara, Fatih Karahan, appointed to the post less than a week ago, said the central bank will reassess its current policy level if there is a significant deterioration in the outlook.
"We are determined to maintain the necessary monetary tightness until inflation falls to levels consistent with our target," said Karahan, who was named governor on Saturday, having been a deputy governor since July.
Turkey's inflation rate climbed to an annual 64.9% last month, having risen 6.7% on a monthly basis.
On Thursday the bank held its inflation forecasts out to end-2026, when it is seen falling to 9%. "Rapid disinflation" will begin after May of this year, Reuters quoted Karahan as saying.
The presentation came after the surprise resignation last Friday of former bank governor Hafize Gaye Erkan, who cited the need to protect her family from what she called a media smear campaign.
The first woman to run the bank, Erkan had aggressively hiked interest rates to 45% from 8.5% since June to cool inflation, orchestrating a dramatic U-turn away from years of easy money in the face of soaring prices under President Recep Tayyip Erdogan.
Karahan, a former Federal Reserve Bank of New York economist, was one of a few deputies on Türkiye's monetary policy committee who played an important role designing the current tightening cycle.
His first in-person comments as chief reinforced the expectation he will remain hawkish.
"Economic indicators since the previous inflation report period confirm that the monetary policy is on the right track," he said. "We will decisively continue our work to ensure disinflation."

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Revenue Growth, Improved Operational Efficiency Boost Profitability of Saudi Telecom Companies

A man monitors the movement of stocks on the Saudi Tadawul index. (AFP)
A man monitors the movement of stocks on the Saudi Tadawul index. (AFP)
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Revenue Growth, Improved Operational Efficiency Boost Profitability of Saudi Telecom Companies

A man monitors the movement of stocks on the Saudi Tadawul index. (AFP)
A man monitors the movement of stocks on the Saudi Tadawul index. (AFP)

Telecommunications companies listed on the Saudi Stock Exchange (Tadawul) achieved a 12.46 percent growth in their net profits, which reached SAR 4.07 billion ($1.09 billion) during the second quarter of 2024, compared to SAR 3.62 billion ($965 million) during the same period last year.

They also recorded a 4.76 percent growth in revenues during the same quarter, after achieving sales worth more than SAR 26.18 billion ($7 billion), compared to SAR 24.99 billion ($6.66 billion) in the same quarter of 2023.

The growth in the revenues and net profitability is the result of several factors, including the increase in sales volume and revenues, especially in the business sector and fifth generation services, as well as the decrease in operating expenses and the focus on improving operational efficiency, controlling costs, and moving towards investment in infrastructure.

The sector comprises four companies, three of which conclude their fiscal year in December: Saudi Telecom Company (STC), Mobily, and Zain Saudi Arabia. The fiscal year of Etihad Atheeb Telecommunications Company (GO) ends on March 31.

According to its financial results announced on Tadawul, Etihad Etisalat Company (Mobily) achieved a 33 percent growth rate of profits, bringing its profits to SAR 661 million by the end of the second quarter of 2024, compared to SAR 497 million during the same period in 2023. The company also achieved a 4.59 percent growth in revenues to reach SAR 4.47 billion, compared to SAR 4.27 billion in the same quarter of last year.

The Saudi Telecom Company achieved the highest net profits among the sector’s companies, at about SAR 3.304 billion in the second quarter of 2024, compared to SAR 3.008 billion in the same quarter of 2023. The company registered a growth of 4.52 percent in revenues.

On the other hand, the revenues of the Saudi Mobile Telecommunications Company (Zain Saudi Arabia) increased by about 6.69 percent, as it recorded SAR 2.55 billion during the second quarter of 2024, compared to SAR 2.39 billion in the same period last year.

Commenting on the quarterly results of the sector’s companies, and the varying net profits, the head of asset management at Rassanah Capital, Thamer Al-Saeed, told Asharq Al-Awsat that the Saudi Telecom Company remains the sector leader in terms of customer base expansion.

He also noted the continued efforts of Mobily and Zain to offer many diverse products and other services.

Financial advisor at the Arab Trader Mohammed Al-Maymouni said the financial results of telecom sector companies have maintained a steady growth, up to 12 percent, adding that Mobily witnessed strong progress compared to the rest of the companies, despite the great competition which affected its revenues.

He added that Zain was moving at a good pace and its revenues have improved during the second quarter of 2024. However, its profits were affected by an increase in the financing cost by SAR 26.5 million riyals and a rise in interest, while net income declined significantly compared to the previous year, during which the company made exceptional returns.