عربي English Türkçe اردو فارسى
Logo
Latest News
Business

Turkish Lira Dips, Business Group Chief Questions Policy

A money changer holds Turkish lira and US dollar banknotes at a currency exchange office in Ankara, Turkey December 16, 2021. (Reuters)
A money changer holds Turkish lira and US dollar banknotes at a currency exchange office in Ankara, Turkey December 16, 2021. (Reuters)
TT
TT

Turkish Lira Dips, Business Group Chief Questions Policy

A money changer holds Turkish lira and US dollar banknotes at a currency exchange office in Ankara, Turkey December 16, 2021. (Reuters)
A money changer holds Turkish lira and US dollar banknotes at a currency exchange office in Ankara, Turkey December 16, 2021. (Reuters)

Turkey's lira slipped as much as 1.7% on Thursday, and has shed some 22% in the last nine trading sessions, on persisting investor concerns about a surge in inflation to a 19-year high after a series of unorthodox interest rate cuts.

The currency weakened to 13.89 against the dollar, before trimming its losses to 13.745 by 0800 GMT. Last year it slumped 44% in its worst year since President Recep Tayyip Erdogan's AK Party came to power in 2002.

Simone Kaslowski, chairman of Turkey's leading TUSIAD business association, said on Wednesday evening the leap in annual inflation to 36.1% clearly showed the need to reconsider the policy steps Turkey has taken.

"If these are the right steps, why is inflation so high?" he was cited as telling an economic panel by news website T24.

Market interest rates were rising despite the central bank rate cuts and dollarization was continuing to increase, he said, questioning whether Turkey was "missing the big picture as we turn to short-term temporary solutions".

"Time is precious. As a country, the cost of using this time more properly is even higher now than before."

Finance Minister Nureddin Nebati said on Wednesday the government would now prioritize the fight against inflation, but added that it had abandoned "orthodox policies" and was charting its own course.

Bond purchases/strong>

Two analysts said the central bank purchased government debt on Wednesday for the first time in more than a year, buying 300 million lira of bonds maturing in 2027 and 2028 and bringing yields down from highs reached earlier this week.

Turkey's benchmark 10-year bond yield fell to 22.63% on Wednesday from 23.11% a day earlier. In its yearly policy text last year, the central bank said it may resort to government bond purchases as a part of its open market operations.

Erdogan unveiled a deposit-protection scheme in late December to encourage savers to convert deposits from foreign currency to lira and support the currency after it hit a record low of 18.4. Economists predict inflation will rise further this year and a series of large administered price rises - including for utilities and wages - illustrated the inflationary pressures.

Urged on by Erdogan in his bid to boost economic growth through higher production and exports, the central bank has lowered its policy rate by 500 basis points to 14% since September.

Most Viewed

 
 
Business

Türkiye Cuts Key Interest Rate to 36%, First Cut in Months

Central Bank of Türkiye (Official Website)
Central Bank of Türkiye (Official Website)
TT
TT

Türkiye Cuts Key Interest Rate to 36%, First Cut in Months

Central Bank of Türkiye (Official Website)
Central Bank of Türkiye (Official Website)

Türkiye's central bank cut its key interest rate on Thursday to 36 percent in the first cut in nine months, pointing to a recent slowdown in inflation.

At a policy meeting, the bank "decided to reduce the policy interest rate ... from 37 percent to 36 percent," it said in a statement.

It was the first cut since January when the bank cut the key rate from 38 to 37 percent, a rate which it held until Thursday's meeting.

"Despite monthly fluctuations, recent inflation figures and leading indicators confirm the downward trend," a bank statement said.

"Data on economic activity and the limited impact of supply shocks on domestic prices suggest that the weak trend in domestic demand continues," it added.

However, ongoing geopolitical tensions were keeping energy prices high, which could push inflation higher, it warned, saying the effects of such geopolitical developments "are being closely monitored".

Türkiye's annual inflation rate eased to 29.7 percent in September from 31.5 percent in August - the first time it had fallen below 30 percent in nearly five years, official figures showed.

At the time, Finance Minister Mehmet Simsek said it was at its lowest level since November 2021. "Disinflation is spreading across the board, excluding transportation," he wrote on X.

The official figures are disputed by the ENAG group of independent economists that publishes its own data, which said its figures showed year-on-year inflation stood at 46.6 percent in September.

 

 

 

 

Business

Saudi Stock Market Drops 2.3% to Lowest Close Since 2021

A person stands in front of a screen showing falling stock prices (Reuters)
A person stands in front of a screen showing falling stock prices (Reuters)
TT
TT

Saudi Stock Market Drops 2.3% to Lowest Close Since 2021

A person stands in front of a screen showing falling stock prices (Reuters)
A person stands in front of a screen showing falling stock prices (Reuters)

Saudi Arabia's benchmark stock index ended Thursday's session down 2.3 percent, shedding 231 points to close at 9,696, its lowest closing level since 2021, with total trading turnover reaching approximately SAR 4.9 billion.

The Tadawul All Share Index (TASI) fluctuated between an intraday low of 9,640 points and a high of 9,888 points.

Thursday's decline brought the index's weekly losses to more than 400 points, or 4.1 percent, marking its eighth consecutive week of declines.

Most stocks fell during the session, led by Saudi National Bank, which dropped more than 5 percent to SAR 34.62, with approximately 9 million shares traded.

Saudi Aramco and Al Rajhi Bank each declined 1 percent, closing at SAR 25.40 and SAR 59.80, respectively, while Maaden fell 5 percent to SAR 55.90.

Shares of Retal, Al Yamamah Steel, East Pipes, Jahez, Gulf Training and Saudi Steel Pipe ended the session with losses ranging from 5 to 9 percent.

Meanwhile, Electrical Industries, Abo Moati, Umm Al-Qura Cement, Saleh Al-Rashed, Wafrah, Saudi Vitrified Clay Pipe and Watani Iron Steel each fell 10 percent.

On the upside, Al-Etihad rose 10 percent to SAR 6.16, followed by JAZADCO with gains exceeding 9 percent. Shares of Al Arabia, UCIC and Saudi Kayan advanced between 1 and 3 percent.

Business

Barclays Bank to Cut about 5,000 Jobs amid AI Drive

Barclays says the job cuts are due to AI efficiencies. Paul ELLIS / AFP/File
Barclays says the job cuts are due to AI efficiencies. Paul ELLIS / AFP/File
TT
TT

Barclays Bank to Cut about 5,000 Jobs amid AI Drive

Barclays says the job cuts are due to AI efficiencies. Paul ELLIS / AFP/File
Barclays says the job cuts are due to AI efficiencies. Paul ELLIS / AFP/File

British bank Barclays announced Thursday plans to cut around 5,000 jobs, or roughly five percent of its global workforce, by the end of 2026 in an AI efficiency drive.

The announcement came alongside an earnings update that showed Barclays' net profit grew 13 percent in the third quarter, fueled by surging income across its equities division, said AFP.

Barclays said in an earnings presentation that it was implementing "organizational simplification and technology change efficiency driven by AI".

"About 60 percent of the job losses relate to support functions, including fewer developers as AI makes our people more productive," it added.

The bank's profit after tax grew to £1.65 billion ($2.2 billion) in the third quarter from £1.46 billion in the July-September period a year earlier.

Barclays chief executive C. S. Venkatakrishnan noted "ongoing momentum of... operational and financial performance" and said the investment bank division "delivered strong equities performance".

Revenue from equities jumped 47 percent year-on-year, while total group income for the quarter climbed three percent to £7.37 billion.

Barclays' share price was up slightly following the news updates.

The AI "announcement comes as the company failed to match expectations with its third-quarter performance -- with the unveiling of a healthy share buyback failing to entirely ease investors' disappointment", noted AJ Bell investment director Russ Mould.

"Across the wider group, costs went up and Barclays shareholders are also having to contend with two major clouds over the business.

"The first being a widely expected increase in tax on the sector in next week's (UK) budget and the other being a reported probe into possible misrepresentation of risks in its private credit portfolio."