Moody's Investors Service said a downgrade of Turkey's sovereign credit rating will hinge on the policies it takes to reduce risk of a balance of payments crisis amid an escalating standoff with the United States.
The lira rallied on Wednesday after Turkey's banking regulator took measures to shore up the battered currency. It had depreciated nearly 40 per cent against the dollar this year, driven by concerns over President Recep Tayyip Erdogan's macroeconomic policies and his stance against raising interest rates despite high inflation.
"We would likely downgrade Turkey's ratings if we conclude that policymaking is unlikely to be able to prevent a further deterioration in Turkey's external position, leading to a sustained rise in the risk of a balance of payments crisis," Mathias Angonin, sovereign analyst at Moody's, told The National.
In June, credit rating agency Moody's said it would place Turkey's credit rating on review for a downgrade, citing the uncertainty around the future direction of its macroeconomic policies. This came after it had cut its rating by one notch in March to Ba2, two levels below investment grade. During this week, the lira slumped to record lows, after the US imposed sanctions on Turkey for jailing an American pastor. The currency plunge raised concerns of a banking crisis and rekindled long-running worries about economic mismanagement.
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Turkey escalates US feud by increasing tariffs on products
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Turkey slapped tariffs ranging from 60 to 140 per cent on some American goods in retaliation to the US moves, upping the stakes in a feud with the Nato ally on Wednesday. The taxed imports include alcohol, cars and tobacco, in retaliation to tariffs imposed by President Donald Trump last week on Turkish metals exports.
The new round of tariffs followed President Erdogan's call on Tuesday to boycott US electronic products and earlier urging Turks to sell their dollars and euros to prop up the lira.
Turkey's economic crisis has deeper roots beyond the market reaction triggered by rising tensions with the US. High inflation, a large current account deficit and a sizable external funding requirement are among the major factors behind the crisis, according to analysts.
"Worsening relations with the US, the unresponsiveness of policy (including the central bank’s) and fears of the politicisation of economic decision-making have exacerbated the situation," Monica Malik, chief economist at Abu Dhabi Commercial Bank, said in a report.
"We expect that Turkey will have to introduce deep fiscal and monetary tightening to stabilise the Turkish lira, which in turn will dampen economic activity further."
Markets have called on Turkey to increase its interest rate to help reduce high inflation levels, but President Erdogan's aversion to interest rates has been clear, calling them "the mother of all evil."
Turkey's banking watchdog on Wednesday limited the amount of currency swap transactions that banks can participate in by half. The move by the Banking Regulation and Supervision Agency, or BDDK as
it is known, is aimed at deterring short-selling of the currency.
However, investors are calling for more aggressive measures that will demonstrate the central bank's independence from the president by raising borrowing costs substantially.
"In the absence of aggressive central bank actions, however, the lira will continue to drop and net capital outflows will continue, " Andy Birch, principal economist at IHS Markit, said. "Without net capital inflows, reserves will fall farther, eventually undermining Turkey's ability to finance its current-account deficit, forcing a more substantial correction of the imbalance in the latter portions of 2018 and into 2019."
UAE currency: the story behind the money in your pockets
The low down
Producers: Uniglobe Entertainment & Vision Films
Director: Namrata Singh Gujral
Cast: Rajkummar Rao, Nargis Fakhri, Bo Derek, Candy Clark
Rating: 2/5
ENGLAND SQUAD
Eoin Morgan (captain), Moeen Ali, Jonny Bairstow, Sam Billings, Jos Buttler, Tom Curran, Alex Hales, Liam Plunkett, Adil Rashid, Joe Root, Jason Roy, Ben Stokes, David Willey, Chris Woakes, Mark Wood
SHALASH%20THE%20IRAQI
%3Cp%3EAuthor%3A%20Shalash%3Cbr%3ETranslator%3A%20Luke%20Leafgren%3Cbr%3EPages%3A%20352%3Cbr%3EPublisher%3A%20And%20Other%20Stories%3C%2Fp%3E%0A
Farasan Boat: 128km Away from Anchorage
Director: Mowaffaq Alobaid
Stars: Abdulaziz Almadhi, Mohammed Al Akkasi, Ali Al Suhaibani
Rating: 4/5
if you go
Getting there
Etihad (Etihad.com), Emirates (emirates.com) and Air France (www.airfrance.com) fly to Paris’ Charles de Gaulle Airport, from Abu Dhabi and Dubai respectively. Return flights cost from around Dh3,785. It takes about 40 minutes to get from Paris to Compiègne by train, with return tickets costing €19. The Glade of the Armistice is 6.6km east of the railway station.
Staying there
On a handsome, tree-lined street near the Chateau’s park, La Parenthèse du Rond Royal (laparenthesedurondroyal.com) offers spacious b&b accommodation with thoughtful design touches. Lots of natural woods, old fashioned travelling trunks as decoration and multi-nozzle showers are part of the look, while there are free bikes for those who want to cycle to the glade. Prices start at €120 a night.
More information: musee-armistice-14-18.fr ; compiegne-tourisme.fr; uk.france.fr
Dhadak 2
Director: Shazia Iqbal
Starring: Siddhant Chaturvedi, Triptii Dimri
Rating: 1/5
The specs
Engine: 3.5-litre twin-turbo V6
Power: 380hp at 5,800rpm
Torque: 530Nm at 1,300-4,500rpm
Transmission: Eight-speed auto
Price: From Dh299,000 ($81,415)
On sale: Now
The five pillars of Islam
Mohammed bin Zayed Majlis
Mohammed bin Zayed Majlis
More from Neighbourhood Watch:
Killing of Qassem Suleimani
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Specs
%3Cp%3E%3Cstrong%3EEngine%3A%3C%2Fstrong%3E%201.5-litre%20turbo%204-cylinder%20%2F%202.0%20turbo%204-cylinder%20(S3)%0D%3Cbr%3E%3Cstrong%3EPower%3A%3C%2Fstrong%3E%20148bhp%20%2F%20328bhp%20(S3)%0D%3Cbr%3E%3Cstrong%3ETorque%3A%3C%2Fstrong%3E%20250Nm%20%2F%20420Nm%20(S3)%0D%3Cbr%3E%3Cstrong%3EOn%20sale%3A%3C%2Fstrong%3E%20December%0D%3Cbr%3E%3Cstrong%3EPrice%3A%3C%2Fstrong%3E%20TBA%0D%3C%2Fp%3E%0A
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
Volvo ES90 Specs
Engine: Electric single motor (96kW), twin motor (106kW) and twin motor performance (106kW)
Power: 333hp, 449hp, 680hp
Torque: 480Nm, 670Nm, 870Nm
On sale: Later in 2025 or early 2026, depending on region
Price: Exact regional pricing TBA
The National Archives, Abu Dhabi
Founded over 50 years ago, the National Archives collects valuable historical material relating to the UAE, and is the oldest and richest archive relating to the Arabian Gulf.
Much of the material can be viewed on line at the Arabian Gulf Digital Archive - https://www.agda.ae/en
'The Sky is Everywhere'
Director:Josephine Decker
Stars:Grace Kaufman, Pico Alexander, Jacques Colimon
Rating:2/5
The specs
Engine: 3.9-litre twin-turbo V8
Power: 620hp from 5,750-7,500rpm
Torque: 760Nm from 3,000-5,750rpm
Transmission: Eight-speed dual-clutch auto
On sale: Now
Price: From Dh1.05 million ($286,000)
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
Dubai Bling season three
Cast: Loujain Adada, Zeina Khoury, Farhana Bodi, Ebraheem Al Samadi, Mona Kattan, and couples Safa & Fahad Siddiqui and DJ Bliss & Danya Mohammed
Rating: 1/5
COMPANY%20PROFILE
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The specs
Engine: 4.0-litre flat-six
Torque: 450Nm at 6,100rpm
Transmission: 7-speed PDK auto or 6-speed manual
Fuel economy, combined: 13.8L/100km
On sale: Available to order now
Developer: Ubisoft Montreal / Ubisoft Toronto
Publisher: Ubisoft
Platforms: Playstation 4, Xbox One, Windows
Release Date: April 10
Types of bank fraud
1) Phishing
Fraudsters send an unsolicited email that appears to be from a financial institution or online retailer. The hoax email requests that you provide sensitive information, often by clicking on to a link leading to a fake website.
2) Smishing
The SMS equivalent of phishing. Fraudsters falsify the telephone number through “text spoofing,” so that it appears to be a genuine text from the bank.
3) Vishing
The telephone equivalent of phishing and smishing. Fraudsters may pose as bank staff, police or government officials. They may persuade the consumer to transfer money or divulge personal information.
4) SIM swap
Fraudsters duplicate the SIM of your mobile number without your knowledge or authorisation, allowing them to conduct financial transactions with your bank.
5) Identity theft
Someone illegally obtains your confidential information, through various ways, such as theft of your wallet, bank and utility bill statements, computer intrusion and social networks.
6) Prize scams
Fraudsters claiming to be authorised representatives from well-known organisations (such as Etisalat, du, Dubai Shopping Festival, Expo2020, Lulu Hypermarket etc) contact victims to tell them they have won a cash prize and request them to share confidential banking details to transfer the prize money.
The specs
Engine: 2.0-litre 4-cyl turbo
Power: 247hp at 6,500rpm
Torque: 370Nm from 1,500-3,500rpm
Transmission: 10-speed auto
Fuel consumption: 7.8L/100km
Price: from Dh94,900
On sale: now
Killing of Qassem Suleimani
Manikarnika: The Queen of Jhansi
Director: Kangana Ranaut, Krish Jagarlamudi
Producer: Zee Studios, Kamal Jain
Cast: Kangana Ranaut, Ankita Lokhande, Danny Denzongpa, Atul Kulkarni
Rating: 2.5/5
GAC GS8 Specs
Engine: 2.0-litre 4cyl turbo
Power: 248hp at 5,200rpm
Torque: 400Nm at 1,750-4,000rpm
Transmission: 8-speed auto
Fuel consumption: 9.1L/100km
On sale: Now
Price: From Dh149,900
