The Turkish lira tumbled to a record low after the central bank cut borrowing costs for a third straight month, a move that risks further undermining price stability while eroding what little confidence investors had in the nation’s policymakers.
The lira fell as much as 6 per cent to 11.3118 against the dollar, the biggest decline in eight months. Officials cut the one-week repo rate by 100 basis points to 15 per cent, in line with the median estimate in a Bloomberg survey, and said they would consider ending the easing cycle next month.
It comes as consumer inflation accelerated to almost 20 per cent in October, a level last seen following a currency crisis three years ago.
Under pressure from President Recep Tayyip Erdogan, the central bank has lowered interest rates by 400 basis points since September, driving the currency’s real yield well below zero.
The move contrasts with a tightening drive across some of Turkey’s major peers in emerging markets. South Africa raised its benchmark interest rate for the first time in three years on Thursday, while Mexico increased policy rates last week.
“The decision to cut rates is politically motivated even with their December forward guidance,” said Saed Abukarsh, chief portfolio manager at Ark Capital Management Dubai. “Confidence in any form of central bank credibility has left the door.”
Easier policy in Turkey leaves the lira vulnerable to further gains in the US dollar as speculation grows that the Federal Reserve may tighten policy sooner than anticipated.
The greenback rose to the strongest level in more than a year against a basket of peers this week, piling pressure on riskier emerging-market currencies that have benefited from exceptionally loose policy in the developed world.
The lira has lost about a third of its value against the dollar since December and is poised for a ninth straight yearly loss. It has weakened more than 20 per cent since the central bank started cutting rates in September, the biggest decline in emerging markets.
“This move of the lira is insane yet totally predictable,” said Win Thin, global head of currency strategy at New York-based Brown Brothers Harriman. “When you’re doing worse than the Argentine peso, that’s quite a statement.”
Before the decision, the chairman of Tusiad, Turkey’s biggest business group, said the central bank shouldn’t forget its main target of controlling inflation.
This reflects mounting concerns that extended currency weakness risks destabilising the economy, which sits on $446 billion of gross external debt, central bank data show.
Turkish companies and the government have to repay $13bn in foreign-currency debt in the final two months of the year. More than half — $8bn — is set to mature in November, the biggest amount due over the next 10 months, the latest available data show.
Turkey’s benchmark BIST 100 Index jumped after the decision to trade as much as 3 per cent higher. The yield on 10-year government bonds rose as much as 57 basis points, the biggest increase since September.
DUBAI WORLD CUP CARNIVAL CARD
6.30pm Handicap US$135,000 (Turf) 2,410m
7.05pm UAE 1000 Guineas Listed $250,000 (Dirt) 1,600m
7.40pm Dubai Dash Listed $175,000 (T) 1,000m
8.15pm Al Bastakiya Trial Conditions $100,000 (D) 1.900m
8.50pm Al Fahidi Fort Group Two $250,000 (T) 1,400m
9.25pm Handicap $135,000 (D) 2,000m
The National selections
6.30pm: Gifts Of Gold
7.05pm Final Song
7.40pm Equilateral
8.15pm Dark Of Night
8.50pm Mythical Magic
9.25pm Franz Kafka
Racecard
6.35pm: American Business Council – Maiden (PA) Dh80,000 (Dirt) 1,600m
7.10pm: British Business Group – Maiden (TB) Dh82,500 (D) 1,200m
7.45pm: CCI France UAE – Handicap (TB) Dh87,500 (D) 1,400m
8.20pm: Czech Business Council – Rated Conditions (TB) Dh105,000 (D) 1,400m
8.55pm: Netherlands Business Council – Rated Conditions (TB) Dh95,000 (D) 1,600m
9.30pm: Indian Business and Professional Council – Handicap (TB) Dh95,000 (D) 1,200m
UAE currency: the story behind the money in your pockets
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.
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Europe’s rearming plan
- Suspend strict budget rules to allow member countries to step up defence spending
- Create new "instrument" providing €150 billion of loans to member countries for defence investment
- Use the existing EU budget to direct more funds towards defence-related investment
- Engage the bloc's European Investment Bank to drop limits on lending to defence firms
- Create a savings and investments union to help companies access capital
UAE currency: the story behind the money in your pockets
more from Janine di Giovanni
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UAE currency: the story behind the money in your pockets
Bookshops: A Reader's History by Jorge Carrión (translated from the Spanish by Peter Bush),
Biblioasis
THE CLOWN OF GAZA
Director: Abdulrahman Sabbah
Starring: Alaa Meqdad
Rating: 4/5
Most sought after workplace benefits in the UAE
- Flexible work arrangements
- Pension support
- Mental well-being assistance
- Insurance coverage for optical, dental, alternative medicine, cancer screening
- Financial well-being incentives
Conflict, drought, famine
Estimates of the number of deaths caused by the famine range from 400,000 to 1 million, according to a document prepared for the UK House of Lords in 2024.
It has been claimed that the policies of the Ethiopian government, which took control after deposing Emperor Haile Selassie in a military-led revolution in 1974, contributed to the scale of the famine.
Dr Miriam Bradley, senior lecturer in humanitarian studies at the University of Manchester, has argued that, by the early 1980s, “several government policies combined to cause, rather than prevent, a famine which lasted from 1983 to 1985. Mengistu’s government imposed Stalinist-model agricultural policies involving forced collectivisation and villagisation [relocation of communities into planned villages].
The West became aware of the catastrophe through a series of BBC News reports by journalist Michael Buerk in October 1984 describing a “biblical famine” and containing graphic images of thousands of people, including children, facing starvation.
Band Aid
Bob Geldof, singer with the Irish rock group The Boomtown Rats, formed Band Aid in response to the horrific images shown in the news broadcasts.
With Midge Ure of the band Ultravox, he wrote the hit charity single Do They Know it’s Christmas in December 1984, featuring a string of high-profile musicians.
Following the single’s success, the idea to stage a rock concert evolved.
Live Aid was a series of simultaneous concerts that took place at Wembley Stadium in London, John F Kennedy Stadium in Philadelphia, the US, and at various other venues across the world.
The combined event was broadcast to an estimated worldwide audience of 1.5 billion.
David Haye record
Total fights: 32
Wins: 28
Wins by KO: 26
Losses: 4
Test
Director: S Sashikanth
Cast: Nayanthara, Siddharth, Meera Jasmine, R Madhavan
Star rating: 2/5
Torbal Rayeh Wa Jayeh
Starring: Ali El Ghoureir, Khalil El Roumeithy, Mostafa Abo Seria
Stars: 3
UAE currency: the story behind the money in your pockets
TO A LAND UNKNOWN
Director: Mahdi Fleifel
Starring: Mahmoud Bakri, Aram Sabbah, Mohammad Alsurafa
Rating: 4.5/5
Specs
Engine: Duel electric motors
Power: 659hp
Torque: 1075Nm
On sale: Available for pre-order now
Price: On request
The%20specs
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2.0
Director: S Shankar
Producer: Lyca Productions; presented by Dharma Films
Cast: Rajnikanth, Akshay Kumar, Amy Jackson, Sudhanshu Pandey
Rating: 3.5/5 stars
Key recommendations
- Fewer criminals put behind bars and more to serve sentences in the community, with short sentences scrapped and many inmates released earlier.
- Greater use of curfews and exclusion zones to deliver tougher supervision than ever on criminals.
- Explore wider powers for judges to punish offenders by blocking them from attending football matches, banning them from driving or travelling abroad through an expansion of ‘ancillary orders’.
- More Intensive Supervision Courts to tackle the root causes of crime such as alcohol and drug abuse – forcing repeat offenders to take part in tough treatment programmes or face prison.
Specs
Engine: 3.0L twin-turbo V6
Gearbox: 10-speed automatic
Power: 405hp at 5,500rpm
Torque: 562Nm at 3,000rpm
Fuel economy, combined: 11.2L/100km
Price: From Dh292,845 (Reserve); from Dh320,145 (Presidential)
On sale: Now
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Diablo%20IV
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