عربي English Türkçe اردو فارسى
Logo
Latest News
Business

Turkish Lira Hits Record Low on Geopolitical Concerns

Turkey’s lira touched a record low against the dollar. (Getty Images)
Turkey’s lira touched a record low against the dollar. (Getty Images)
TT
TT

Turkish Lira Hits Record Low on Geopolitical Concerns

Turkey’s lira touched a record low against the dollar. (Getty Images)
Turkey’s lira touched a record low against the dollar. (Getty Images)

Turkey’s lira touched a record low against the dollar on Wednesday, hit by investor unease over possible US sanctions, fraught ties with the European Union and the ongoing Caucasus conflict.

The currency has lost 24% of its value this year on worries over the central bank’s depleted forex reserves, costly interventions in the currency market, and geopolitical issues.

The lira hit a record low of 7.8850 against the US currency, weakening from a close of 7.8050 on Wednesday. By 1232 GMT it stood at 7.8800.

Concerns over possible US sanctions resurfaced after Bloomberg reported on Tuesday that Ankara would begin testing the Russian S-400 missile defense system.

Tensions with the EU, meanwhile, appeared to rise after President Recep Tayyip Erdogan said on Tuesday decisions at an EU summit last week over disputes including maritime claims in the eastern Mediterranean had been insufficient to resolve disagreements.

Erdogan and a Turkish Cypriot leader also announced the partial reopening of a Cypriot resort abandoned since the 1974 invasion by Turkey. This drew condemnation from Greece and the Greek Cypriot government.

“The EU-related concerns over geopolitical tensions decreased in recent days due to a move towards dialogue. But as of this week, an increase in tensions in both Azerbaijan and the EU can be observed,” a banker said.

Fighting between Azerbaijan and Armenian forces in Nagorno-Karabakh is at its most intense in 25 years. Ankara’s backing for Baku has set Turkey apart from other big nations, alarming NATO allies who seek a ceasefire.

Investors were also assessing the Treasury’s first eurobond issue since February. Despite the tensions and financial market turbulence, Turkey sold a $2.5 billion 5-year eurobond on Tuesday that gave buyers 6.4% interest.

Demand was three times the amount it borrowed, the Treasury said. Turkey has borrowed $6.5 billion from international markets this year, it said, out of a planned $9 billion.

Turkey's dollar-denominated bonds weakened, with the April and February issues both losing more than 1 cent on the dollar, their biggest daily fall in two weeks, Tradeweb data showed.

Five-year Turkey credit default swaps rose to 511 basis points, up 9 basis points from Tuesday's close, according to IHS Markit.

Most Viewed

 
 
Business

IMF: Egypt Absorbs Economic Shocks of War

A man walks past a traditional sidewalk kiosk in Cairo on September 18, 2026 (AFP)
A man walks past a traditional sidewalk kiosk in Cairo on September 18, 2026 (AFP)
TT
TT

IMF: Egypt Absorbs Economic Shocks of War

A man walks past a traditional sidewalk kiosk in Cairo on September 18, 2026 (AFP)
A man walks past a traditional sidewalk kiosk in Cairo on September 18, 2026 (AFP)

Egypt has weathered one of the region's largest recent economic shocks without a broader downturn, benefiting from improved international reserves, exchange rate flexibility, and a swift policy response.

However, the economy’s ability to remain resilient will continue to depend on addressing chronic weaknesses, including high public debt, large financing needs, the banking sector’s elevated exposure to the government, and the expanding role of the state in economic activity.

The findings were published in a country focus prepared by Amine Mati, IMF’s mission chief for Egypt, and Yevgeniya Korniyenko, a senior economist at the IMF’s Middle East and Central Asia Department.

Entitled ‘Resilience Under Pressure: Egypt's Economy Defied Expectations,’ the two economists found that policy reforms undertaken under the IMF-supported program had strengthened growth, put inflation on a downward path, and helped rebuild international reserves and improve banks’ foreign asset positions.

Also, the IMF’s latest assessments indicate that gross financing needs are expected to remain around 40% of GDP in the near term and decline only gradually to below 30% by 2030. More broadly, the state footprint in the economy remains excessively high.

Economy Absorbs Shocks

According to the IMF, Egypt entered the latest period of regional conflict in a stronger macroeconomic position than during previous episodes of external stress.

The Fund said policy reforms undertaken under its-supported program had strengthened growth, put inflation on a downward path, and helped rebuild international reserves and improve banks’ foreign asset positions.

Also, the Fund noted that financial markets reacted sharply.

“Nonresident holdings of local-currency government debt fell from $39.1 billion in February to $22.2 billion in early April, while the Egyptian pound depreciated by about 14–17%,” it wrote.

As pressures eased, portfolio inflows resumed, non-resident holdings returned to near pre-conflict levels, and the pound recovered much of its initial losses.

The IMF linked this performance to the fact that exchange rate flexibility absorbed external pressures, while energy price adjustments in the wake of higher international oil prices, spending restraint, and expanded targeted support helped preserve policy discipline.

Non-Stop Growth

In its country focus, the IMF found that the financial shock in Egypt did not spill over into a broader economic downturn.

“Growth remained strong, reaching 5.0% in the third quarter of FY2025/26, while tourism stayed resilient, remittances surged to record highs, and Suez Canal activity continued its gradual recovery following some temporary disruption amid the regional turmoil,” it wrote.

Also, fiscal pressures were contained through revenue mobilization and expenditure restraint.

As for inflation, it rose in response to the currency depreciation and energy price adjustments, but the increase proved less severe than expected, although the path back to the inflation target was pushed back by a year.

Crucially, the IMF said, international reserves remained comfortably above adequate levels despite initial capital outflows, reflecting exchange rate flexibility in absorbing external pressures—a key difference from past episodes.

Gross Financing Needs Still High

The latest shock demonstrated Egypt’s improved resilience, but significant vulnerabilities remain, the IMF found.

It said public debt and gross financing needs are still high, financing relies heavily on short maturities, and banks’ exposure to the government remains elevated.

The fund warned that these vulnerabilities—particularly amid heightened global uncertainty—leave Egypt exposed to shifts in global financing conditions and renewed external shocks, while reinforcing the sovereign-bank nexus and increasing the risk of fiscal dominance.

Large government financing needs can also crowd out private sector credit and investment, it said.

The report found that reducing public debt and high gross financing needs will require stronger debt management, with a shift toward longer-term, market-based financing, a broader investor base, and deeper domestic debt markets to reduce refinancing risks and strengthen debt sustainability.

Most importantly, it said, “more decisive implementation of the State Ownership Policy and divestment program, stronger governance of state-owned enterprises, and greater competition will be critical to reducing the state’s footprint and creating the conditions for stronger private sector led growth.”

Business

Ban on US Diesel Exports Would Hurt, Not Help Fuel Markets, Analysts Say

Gas and diesel prices are displayed at a Mobil station, Tuesday, Sept. 22, 2026, in Los Angeles. (AP Photo/Richard Vogel)
Gas and diesel prices are displayed at a Mobil station, Tuesday, Sept. 22, 2026, in Los Angeles. (AP Photo/Richard Vogel)
TT
TT

Ban on US Diesel Exports Would Hurt, Not Help Fuel Markets, Analysts Say

Gas and diesel prices are displayed at a Mobil station, Tuesday, Sept. 22, 2026, in Los Angeles. (AP Photo/Richard Vogel)
Gas and diesel prices are displayed at a Mobil station, Tuesday, Sept. 22, 2026, in Los Angeles. (AP Photo/Richard Vogel)

US President Donald Trump on Tuesday said he backed the idea of a diesel export ban as a way to lower prices that have hit record highs due to a global supply shortage. But analysts and market watchers warn that such a measure would do little to ease high energy prices, and could worsen supply and economic disruptions around the globe, Reuters said.

Trump's comments come as average US diesel prices have jumped to a record $6.5107 a gallon, according to AAA. Diesel is critical to the global economy because it powers transportation, farm equipment and the machinery used to make and move goods.

Shortages in the fuel can lead to price spikes that stoke inflation by raising the cost of moving everything from groceries and consumer goods to industrial materials — already a major pain point for Trump and Republicans headed into the November midterm elections.

WHY ‌ARE DIESEL PRICES HIGH?

Diesel ‌prices have surged amid supply disruptions from Ukrainian strikes on Russia's refineries and the US-Iran ‌war, which ⁠has disrupted or ⁠halted trade along major routes including the Strait of Hormuz. The US is a major exporter of diesel, and countries have increasingly turned to it amid disruptions abroad.

The US exported a record 1.6 million barrels per day of diesel in August, up from about 1 million bpd in February before the war began. Top buyers include Brazil, Chile, Mexico, Peru, Morocco, France and the United Kingdom, according to Kpler.

US on-road diesel inventories have fallen to 96.97 million barrels, nearly 13% under the seasonal average for the previous five years. The drop in inventories comes even as refiners in the US are running at about 97% of capacity.

HOW WOULD A BAN IMPACT THE MARKET?

Major trade groups, including ⁠the American Petroleum Institute, oppose a ban on diesel exports.

"Restricting US diesel exports would wreak ‌havoc on fuel markets at home and abroad, destabilize refinery operations and deepen a global ‌refining crisis already putting upward pressure on US prices. Gulf Coast refineries produce more diesel than the region consumes, while geography and infrastructure constraints prevent ‌that surplus from simply being redirected to every US market that needs it," the API said in a statement.

A ban ‌on diesel exports would push up prices of diesel globally, while pushing down prices in the United States and hurting US refining margins, analysts warned.

"Initially, a diesel ban would send global prices skyrocketing... A ban could raise world prices by as much as 100%, given the fuel’s low price elasticity of demand," said energy economist Philip Verleger.

Any ban would likely push refineries to cut the amount of crude they process. If US refineries cut ‌runs, it would also lower the amount of gasoline and other products produced and push up prices for those fuels, analysts and traders said.

"Banning exports of diesel would drive refiners ⁠to cut runs because the physical ⁠market they can access would be cut, and no market participant in any market sells product at a loss. While an export ban might have a very short-term impact that lowers price, it would not be long-lived...," said Kenneth Medlock III, a fellow in Energy and Resource Economics at the Baker Institute for Public Policy.

WHAT ARE THE POLITICAL AND GEOPOLITICAL IMPLICATIONS?

Some Republican Senate candidates in the most competitive races for the November 3 elections called for administration to implement the export ban to try to alleviate high costs for Americans.

“It is more of political soundings than actual reality,” said Jim Mitchell, director of oil trading analytics at consultancy Wood Mackenzie.

While a diesel export ban could, in theory, lower prices in the United States, it would not ease tightness in Europe, which is structurally short diesel and relies heavily on supplies from the US Gulf Coast.

"That would seem pretty damaging to some key US allies," Mitchell said.

"A ban on US diesel exports, even if temporary, would have the same long-term effect as President (Richard) Nixon’s soybean embargo: the world would no longer view the United States as a dependable source," Verleger said. In 1973 Nixon imposed a temporary soybean embargo that angered importers including Japan and, some analysts say, led to greater dependence on Brazil for the commodity.

Business

Oil Prices Fall after Trump Hails 'Good' Talks with Iran

FILE PHOTO: A small tanker sails near an oil refinery, in the Keihin Industrial Zone in Kawasaki, south of Tokyo, Japan March 17, 2026. REUTERS/Issei Kato/File Photo
FILE PHOTO: A small tanker sails near an oil refinery, in the Keihin Industrial Zone in Kawasaki, south of Tokyo, Japan March 17, 2026. REUTERS/Issei Kato/File Photo
TT
TT

Oil Prices Fall after Trump Hails 'Good' Talks with Iran

FILE PHOTO: A small tanker sails near an oil refinery, in the Keihin Industrial Zone in Kawasaki, south of Tokyo, Japan March 17, 2026. REUTERS/Issei Kato/File Photo
FILE PHOTO: A small tanker sails near an oil refinery, in the Keihin Industrial Zone in Kawasaki, south of Tokyo, Japan March 17, 2026. REUTERS/Issei Kato/File Photo

Oil prices fell on Wednesday after President Donald Trump said US and Iranian representatives had met for "very good" talks at the United Nations.

The international benchmark, Brent crude, and main US contract, West Texas Intermediate, dipped to $98.91 and $89.93 per barrel respectively in early Asian trade -- well below the symbolic $100 mark they have smashed repeatedly since the Middle Eat war broke out in February, AFP reported.

The three-hour meeting was "very good", "very productive" and "they have another one scheduled in the very near future", Trump told reporters as he met Ukrainian President Volodymyr Zelensky.

Trump's announcement came just hours after he delivered a bellicose address to the UN in which he said he faced a "big decision" on whether to make a deal with Iran or "annihilate the Islamic Republic and do it quickly".

Nearly seven months after US-Israeli strikes on Tehran triggered the conflict, the foes remain at an impasse, with Iran keeping the Strait of Hormuz closed and the United States persisting with a counter-blockade of Iranian ports.

"The three-hour US-Iran meeting matters because it shifts the market from pure escalation pricing toward a genuine diplomatic process, even if a final deal still looks distant," said Stephen Innes at Quintex Intel.

Trump has pledged that oil would come down "as soon as" the United States wins the war.

The dip in oil prices came as the world's biggest crude exporter Saudi Arabia reportedly rebooted operations along its East-West Pipeline -- a crucial oil export route shut down by the conflict rocking the Middle East.

Riyadh said this month that drones launched from Iraq had forced the closure of the pipeline, which it had increasingly used to bypass the lockdown of the Strait of Hormuz by Iran.

The kingdom is aiming to resume exports later this week, Bloomberg quoted a source as saying.