Turkey’s central bank delivered a surprise interest rate increase on Thursday, tightening the monetary policy further as the regulator fights to curb inflation that rose to 70 per cent in last year.
The Monetary Policy Committee, led by newly appointed governor Fatih Karahan, increased its benchmark rate to 50 per cent, from 45 per cent, the committee said.
"The committee has also decided to adjust the monetary policy operational framework by setting the central bank overnight borrowing and lending rates 300 basis points below and above the one-week repo auction rate, respectively," it said.
A rise in benchmark rate is a departure from the continuation of the transition to more investor-friendly, orthodox economic policies started by former governor Hafize Gaye Erkan.
In February, Ms Erkan abruptly resigned and President Recep Tayyip Erdogan promoted deputy governor Mr Karahan.
Mr Karahan, who took charge of the top regulatory job just two months ago, in his first public engagements, said getting inflation under control was his top priority and that the central bank was ready to act. However, he kept the rates steady at 45 per cent last month, pausing increases for first time in eight months.
He vowed to increase rates further if inflation surged.
Turkey is facing chronic inflation following years of Mr Erdogan's unorthodox policies. He installed a new economic team to stabilise the economy and control consumer prices last year. Turkey's central bank said in December that it expects inflation to rise to as high as 75 per cent in May, before dipping to about 36 per cent by the end of this year.
The Turkish lira is also the worst performer among emerging market currencies tracked by Bloomberg this month, with a loss of about 3.6 per cent against the dollar.
It’s down almost 9 per cent in the year to date. As local elections approach, the bigger worry is a repeat of its slump after last year’s presidential vote, when it dropped as much as 7 per cent in a single day, according to Bloomberg data.
"The decisiveness regarding tight monetary stance will bring down the underlying trend of monthly inflation through moderation in domestic demand, real appreciation in Turkish lira, and improvement in inflation expectations. Consequently, disinflation will be established in the second half of 2024," the committee said.
Meanwhile, Fitch Ratings earlier this month upgraded Turkey’s credit rating on stronger fiscal policies and reduced financial risks.
Turkey’s ratings were upgraded one notch to B+ from B with a positive outlook, the rating agency said.
“The upgrade reflects increased confidence in the durability and effectiveness of policies implemented since the pivot in June 2023, including greater-than-expected front-loading of monetary policy tightening, in reducing macroeconomic and external vulnerabilities,” Fitch said at the time.
“Inflation expectations have eased and external liquidity risks have moderated, reflected by more favourable external financing conditions, higher reserves and a narrowing current account deficit.”
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UAE%20medallists%20at%20Asian%20Games%202023
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Cricket World Cup League Two
Oman, UAE, Namibia
Al Amerat, Muscat
Results
Oman beat UAE by five wickets
UAE beat Namibia by eight runs
Fixtures
Wednesday January 8 –Oman v Namibia
Thursday January 9 – Oman v UAE
Saturday January 11 – UAE v Namibia
Sunday January 12 – Oman v Namibia
Gully Boy
Director: Zoya Akhtar
Producer: Excel Entertainment & Tiger Baby
Cast: Ranveer Singh, Alia Bhatt, Kalki Koechlin, Siddhant Chaturvedi
Rating: 4/5 stars
UAE%20set%20for%20Scotland%20series
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more from Janine di Giovanni
Profile
Company name: Jaib
Started: January 2018
Co-founders: Fouad Jeryes and Sinan Taifour
Based: Jordan
Sector: FinTech
Total transactions: over $800,000 since January, 2018
Investors in Jaib's mother company Alpha Apps: Aramex and 500 Startups
Dust and sand storms compared
Sand storm
- Particle size: Larger, heavier sand grains
- Visibility: Often dramatic with thick "walls" of sand
- Duration: Short-lived, typically localised
- Travel distance: Limited
- Source: Open desert areas with strong winds
Dust storm
- Particle size: Much finer, lightweight particles
- Visibility: Hazy skies but less intense
- Duration: Can linger for days
- Travel distance: Long-range, up to thousands of kilometres
- Source: Can be carried from distant regions
UAE currency: the story behind the money in your pockets
PREMIER LEAGUE RESULTS
Bournemouth 1 Manchester City 2
Watford 0 Brighton and Hove Albion 0
Newcastle United 3 West Ham United 0
Huddersfield Town 0 Southampton 0
Crystal Palace 0 Swansea City 2
Manchester United 2 Leicester City 0
West Bromwich Albion 1 Stoke City 1
Chelsea 2 Everton 0
Tottenham Hotspur 1 Burnley 1
Liverpool 4 Arsenal 0
AL%20BOOM
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DMZ facts
- The DMZ was created as a buffer after the 1950-53 Korean War.
- It runs 248 kilometers across the Korean Peninsula and is 4km wide.
- The zone is jointly overseen by the US-led United Nations Command and North Korea.
- It is littered with an estimated 2 million mines, tank traps, razor wire fences and guard posts.
- Donald Trump and Kim Jong-Un met at a building in Panmunjom, where an armistice was signed to stop the Korean War.
- Panmunjom is 52km north of the Korean capital Seoul and 147km south of Pyongyang, North Korea’s capital.
- Former US president Bill Clinton visited Panmunjom in 1993, while Ronald Reagan visited the DMZ in 1983, George W. Bush in 2002 and Barack Obama visited a nearby military camp in 2012.
- Mr Trump planned to visit in November 2017, but heavy fog that prevented his helicopter from landing.
COMPANY%20PROFILE
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Moonfall
Director: Rolan Emmerich
Stars: Patrick Wilson, Halle Berry
Rating: 3/5
The specs
Engine: 1.5-litre 4-cyl turbo
Power: 194hp at 5,600rpm
Torque: 275Nm from 2,000-4,000rpm
Transmission: 6-speed auto
Price: from Dh155,000
On sale: now
The biog
Simon Nadim has completed 7,000 dives.
The hardest dive in the UAE is the German U-boat 110m down off the Fujairah coast.
As a child, he loved the documentaries of Jacques Cousteau
He also led a team that discovered the long-lost portion of the Ines oil tanker.
If you are interested in diving, he runs the XR Hub Dive Centre in Fujairah
Global Fungi Facts
• Scientists estimate there could be as many as 3 million fungal species globally
• Only about 160,000 have been officially described leaving around 90% undiscovered
• Fungi account for roughly 90% of Earth's unknown biodiversity
• Forest fungi help tackle climate change, absorbing up to 36% of global fossil fuel emissions annually and storing around 5 billion tonnes of carbon in the planet's topsoil
MATCH INFO
Uefa Champions League, last 16, first leg
Ajax v Real Madrid, midnight (Thursday), BeIN Sports
How to help
Send “thenational” to the following numbers or call the hotline on: 0502955999
2289 – Dh10
2252 – Dh 50
6025 – Dh20
6027 – Dh 100
6026 – Dh 200
Changing visa rules
For decades the UAE has granted two and three year visas to foreign workers, tied to their current employer. Now that's changing.
Last year, the UAE cabinet also approved providing 10-year visas to foreigners with investments in the UAE of at least Dh10 million, if non-real estate assets account for at least 60 per cent of the total. Investors can bring their spouses and children into the country.
It also approved five-year residency to owners of UAE real estate worth at least 5 million dirhams.
The government also said that leading academics, medical doctors, scientists, engineers and star students would be eligible for similar long-term visas, without the need for financial investments in the country.
The first batch - 20 finalists for the Mohammed bin Rashid Medal for Scientific Distinction.- were awarded in January and more are expected to follow.
TECH%20SPECS%3A%20APPLE%20WATCH%20SERIES%208
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