Turkey’s central bank delivered another significant interest rate hike on Thursday, a reflection of the urgency among officials to counter rampant inflation and win back the trust of markets.
The Monetary Policy Committee led by governor Hafize Gaye Erkan raised the benchmark rate to 30 per cent from 25 per cent, in line with the forecasts of most economists surveyed by Bloomberg.
The lira and Turkish bank stocks reversed gains after the announcement.
In a statement accompanying the decision, the MPC said it’s “determined to establish the disinflation course in 2024”, reiterating that “monetary tightening will be further strengthened as much as needed in a timely and gradual manner until a significant improvement in the inflation outlook is achieved”.
A fourth-straight increase intensifies a tightening cycle that began after President Recep Tayyip Erdogan’s re-election in May. It’s kicked into higher gear as his new team of technocrats tries to woo investors who’ve shunned Turkey after years of erratic and unconventional policies knocked the economy off balance.
The latest decision follows Mr Erdogan’s apparent endorsement of monetary tightening this month, despite his long-held beliefs that ultra-low rates could curb inflation. Finance Minister Mehmet Simsek told investors in New York that tackling inflation is Turkey’s “number one priority”.
The central bank can’t let up, with inflation now running at almost 60 per cent and set to accelerate further in the months ahead. Initially criticised for timid rate increases after Ms Erkan‘s appointment in June, policymakers have upped their pace starting with last month’s decision to hike by 750 basis points that exceeded most forecasts.
“As the strong course of domestic demand and the stickiness of services inflation persist, the increase in oil prices and the ongoing deterioration in inflation expectations pose additional upside risks to inflation,” the MPC said.
“Increasing domestic and foreign demand for Turkish lira-denominated assets” is among factors that “will contribute significantly to price stability”, it said.
“We expect the central bank to pause its rate hikes in the first quarter of 2024, ahead of local elections scheduled for March,” Bloomberg economist Selva Bahar Baziki said.
“Further rate increases are likely to follow the vote. This double wave tightening-cycle will likely mean even higher price gains in 2024 (we expect a peak of 70 per cent) and see the central bank then going higher for longer to anchor inflation expectations and tame price gains.”
Mr Erdogan’s new vision has been a tough sell abroad, however, because of his track record of prioritising economic growth and ousting three consecutive central bank governors for not being dovish enough.
The lira is still down almost 31 per cent against the dollar this year, one of the worst performers among its peers in emerging markets.
The inflation outlook has recently grown more dire, with monthly price growth leaping higher by over 9 percentage points in July and August. A survey conducted by the central bank found analysts expect inflation at close to 70 per cent at the end of this year, higher than the government’s estimate of 65 per cent.
How to watch Ireland v Pakistan in UAE
When: The one-off Test starts on Friday, May 11
What time: Each day’s play is scheduled to start at 2pm UAE time.
TV: The match will be broadcast on OSN Sports Cricket HD. Subscribers to the channel can also stream the action live on OSN Play.
Ferrari 12Cilindri specs
Engine: naturally aspirated 6.5-liter V12
Power: 819hp
Torque: 678Nm at 7,250rpm
Price: From Dh1,700,000
Available: Now
Founders: Ines Mena, Claudia Ribas, Simona Agolini, Nourhan Hassan and Therese Hundt
Date started: January 2017, app launched November 2017
Based: Dubai, UAE
Sector: Private/Retail/Leisure
Number of Employees: 18 employees, including full-time and flexible workers
Funding stage and size: Seed round completed Q4 2019 - $1m raised
Funders: Oman Technology Fund, 500 Startups, Vision Ventures, Seedstars, Mindshift Capital, Delta Partners Ventures, with support from the OQAL Angel Investor Network and UAE Business Angels
KILLING OF QASSEM SULEIMANI
Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
Global state-owned investor ranking by size
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China
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UAE
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Japan
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Norway
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Canada
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Singapore
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South Korea
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Specs
Engine: 51.5kW electric motor
Range: 400km
Power: 134bhp
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Brief scores:
Juventus 3
Dybala 6', Bonucci 17', Ronaldo 63'
Frosinone 0
MATCH INFO
Liverpool v Manchester City, Sunday, 8.30pm UAE
The biog
Favourite hobby: I love to sing but I don’t get to sing as much nowadays sadly.
Favourite book: Anything by Sidney Sheldon.
Favourite movie: The Exorcist 2. It is a big thing in our family to sit around together and watch horror movies, I love watching them.
Favourite holiday destination: The favourite place I have been to is Florence, it is a beautiful city. My dream though has always been to visit Cyprus, I really want to go there.
Who is Allegra Stratton?
- Previously worked at The Guardian, BBC’s Newsnight programme and ITV News
- Took up a public relations role for Chancellor Rishi Sunak in April 2020
- In October 2020 she was hired to lead No 10’s planned daily televised press briefings
- The idea was later scrapped and she was appointed spokeswoman for Cop26
- Ms Stratton, 41, is married to James Forsyth, the political editor of The Spectator
- She has strong connections to the Conservative establishment
- Mr Sunak served as best man at her 2011 wedding to Mr Forsyth
Essentials
The flights
Etihad and Emirates fly direct from the UAE to Delhi from about Dh950 return including taxes.
The hotels
Double rooms at Tijara Fort-Palace cost from 6,670 rupees (Dh377), including breakfast.
Doubles at Fort Bishangarh cost from 29,030 rupees (Dh1,641), including breakfast. Doubles at Narendra Bhawan cost from 15,360 rupees (Dh869). Doubles at Chanoud Garh cost from 19,840 rupees (Dh1,122), full board. Doubles at Fort Begu cost from 10,000 rupees (Dh565), including breakfast.
The tours
Amar Grover travelled with Wild Frontiers. A tailor-made, nine-day itinerary via New Delhi, with one night in Tijara and two nights in each of the remaining properties, including car/driver, costs from £1,445 (Dh6,968) per person.
Killing of Qassem Suleimani
OPTA'S PREDICTED TABLE
1. Liverpool 101 points
2. Manchester City 80
3. Leicester 67
4. Chelsea 63
5. Manchester United 61
6. Tottenham 58
7. Wolves 56
8. Arsenal 56
9. Sheffield United 55
10. Everton 50
11. Burnley 49
12. Crystal Palace 49
13. Newcastle 46
14. Southampton 44
15. West Ham 39
16. Brighton 37
17. Watford 36
18. Bournemouth 36
19. Aston Villa 32
20. Norwich City 29
Lexus LX700h specs
Engine: 3.4-litre twin-turbo V6 plus supplementary electric motor
Power: 464hp at 5,200rpm
Torque: 790Nm from 2,000-3,600rpm
Transmission: 10-speed auto
Fuel consumption: 11.7L/100km
On sale: Now
Price: From Dh590,000
BELGIUM%20SQUAD
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UAE currency: the story behind the money in your pockets
EMERGENCY PHONE NUMBERS
Estijaba – 8001717 – number to call to request coronavirus testing
Ministry of Health and Prevention – 80011111
Dubai Health Authority – 800342 – The number to book a free video or voice consultation with a doctor or connect to a local health centre
Emirates airline – 600555555
Etihad Airways – 600555666
Ambulance – 998
Knowledge and Human Development Authority – 8005432 ext. 4 for Covid-19 queries
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
The five pillars of Islam
1. Fasting
2. Prayer
3. Hajj
4. Shahada
5. Zakat
Tearful appearance
Chancellor Rachel Reeves set markets on edge as she appeared visibly distraught in parliament on Wednesday.
Legislative setbacks for the government have blown a new hole in the budgetary calculations at a time when the deficit is stubbornly large and the economy is struggling to grow.
She appeared with Keir Starmer on Thursday and the pair embraced, but he had failed to give her his backing as she cried a day earlier.
A spokesman said her upset demeanour was due to a personal matter.
Dubai Rugby Sevens
November 30, December 1-2
International Vets
Christina Noble Children’s Foundation fixtures
Thursday, November 30:
10.20am, Pitch 3, v 100 World Legends Project
1.20pm, Pitch 4, v Malta Marauders
Friday, December 1:
9am, Pitch 4, v SBA Pirates
The Abu Dhabi Awards explained:
What are the awards? They honour anyone who has made a contribution to life in Abu Dhabi.
Are they open to only Emiratis? The awards are open to anyone, regardless of age or nationality, living anywhere in the world.
When do nominations close? The process concludes on December 31.
How do I nominate someone? Through the website.
When is the ceremony? The awards event will take place early next year.
More from Neighbourhood Watch:
UAE currency: the story behind the money in your pockets
