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Turkish central bank publishes interest rate decision, talks about the future through



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© Reuters. – released interest rate decision after several days of anticipation amid inflation recorded a few days ago, which came amid expectations.

The Turkish central bank has kept interest rates unchanged at 14%.

Turkish Federal Report

Geopolitical risks

Negative risks to global and regional economic activity are alive and well, leading to increased uncertainty. Growing uncertainties in global food security, along with trade sanctions, higher commodity prices, and in some sectors, especially basic food and energy, and higher transportation costs, are driving up the prices of manufacturers and consumers internationally.

Inflation expectations and the effects of higher global inflation on international financial markets are being closely watched, although central banks in developed countries view that inflation will take longer than expected due to higher energy prices and the mismatch between supply and demand.

Becomes even stronger

In this context, capacity utilization levels and other key indicators indicate that domestic economic activity remains strong, with the positive impact of gradually increasing external demand, despite regional differences.

As the role of fixed components in the formation of growth increases, the risks arising from energy prices persist in the current account balance, and it is important that the current account balance is always at a constant level for price stability.

Precautionary policy

The Board considers that the growth rate of loans, including long-term investment loans in the Turkish lira, and the meeting of financial resources approached with economic activity in line with their purpose are important for financial stability.

In this context, the Council will continue to implement the macro-Prudential Policy, which has been strengthened with further action.

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The cost of energy increases from the temporary effects of geopolitical developments, the absence of economics, and the strong negative supply shocks caused by rising global energy, food and agricultural prices.

The Council expects that with the measures taken to achieve sustainable prices and financial stability, the key effects of inflation will disappear and the process of reducing inflation will begin by re-establishing an environment of world peace.

In this context, the Board has decided to maintain a policy ratio that is consistent with the fact that in order to institutionalize price stability, the CBRT continues to review the comprehensive policy framework that promotes a permanent and strengthened lira on all policy instruments. The collateral and liquidity policy, with its ratings completed and implemented.

All tools

In line with the main objective of price stability, the Turkish central bank will continue to use all its tools resolutely within the framework of the lira strategy until strong signs of a permanent decline in inflation and a medium-term target emerge. 5%

The bank said the stabilization to be achieved at public price levels, the reduction of state risk premiums, the continuation of reverse currency exchange and the increase in foreign exchange reserves would positively affect macroeconomic stability and financial stability. Permanent reduction in financial costs.

Thus, a conducive environment for sustainable investment, productivity and employment development in a healthy and sustainable manner will be created and the Board will continue to take its decisions within a transparent, predictable and data-based framework.

Accordingly, the Monetary Policy Committee decided to keep the repurchase auction rate, i.e. the policy rate, at 14 per cent for one week.

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Lira now

At this juncture, it is trading at its lowest level in 5 months, crossing the 16 pound / dollar mark for the first time since the last cut on December 21, 2021.

The Turkish lira fell 0.5% to 16.46 lira / dollar, down 1.5% on Wednesday.

On the other hand, in light of the expectations of investors in the mid-term, the Turkish lira is trading at 980 lira / g, while gold has risen within the range of 80 lira per gram from the beginning. Month.


Official figures show that the consumer price index in Turkey rose by 70% in April compared to the same month last year, reaching its highest level in two decades.

On a monthly basis, prices rose, according to data from the Turkish Statistics Institute, while the consumer price index rose 7.25% in April compared to the previous month.

The Turkish lira fell sharply, peaking in December 2021, as President Recep Tayyip Erdogan prioritized exports over monetary stability after introducing a policy of lowering interest rates.

Erdogan described interest rates as the root of all evil, and used an unusual policy to reduce rates, including interference in the foreign exchange market.

The Turkish president has changed the leadership of the country’s central bank three times in the past two years, and the Turkish central bank has cut interest rates from 19 percent to 14 percent from September to December 2021.

The Turkish lira fell to its lowest level since December 21, when it fell below 18 lira / dollar.

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European shares fall for fifth straight day, real estate shares fall, Reuters



European shares fall for fifth straight day, real estate shares fall, Reuters
© Reuters. Electronic screens show stock trading activity on the German DAX index at the Frankfurt Stock Exchange on Wednesday. Photo: Reuters.

(Reuters) – European stocks fell for a fifth straight day on Wednesday as negative reports from brokerages on property owners in Britain hurt real estate stocks, while recent moves weighed on shares of Dutch insurers and Swiss bank UBS. .

The European index fell 0.2 percent, closing at its lowest level in six months.

The European real estate sector index fell 2 percent.

Land Securities, British Land and Derwent London shares fell between 3.4 percent and 4.3 percent.

Overall, market sentiment remained pessimistic with investors on the likelihood of major central banks keeping interest rates high for longer, and a slump in China’s real estate sector added to negative sentiment.

The STOXX 600 index appeared to be on track for its first quarterly loss in four years, while the German index turned out to be the worst performer at the regional level.

Meanwhile, shares of Dutch insurers took a hit after court rulings raised the prospect of huge damage claims in a long-running battle over investment-linked products.

NN shares fell 18.8 percent, while ASR shares fell 14.2 percent.

Shares of UBS Bank fell about three percent after the U.S. Justice Department stepped up scrutiny of cases of suspected noncompliance with rules that helped clients from Russia avoid sanctions.

H&M shares, on the other hand, rose 3.4 percent after the world’s second-largest clothing retailer reported a slightly larger-than-expected increase in its quarterly profit, supported by cost cuts.

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(Prepared by Rehab Ala for Arabic Bulletin)

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Saudi Aramco to enter into new acquisition deal in China



Saudi Aramco to enter into new acquisition deal in China

Saudi Aramco continues its strategy of expanding petrochemical investments as part of a plan to convert 4 million barrels of oil per day into chemical products.

The Saudi oil giant has made China one of the most important markets it aims to expand into by entering into partnership or acquisition deals in the oil refining and petrochemical sector.

In this context, Saudi Aramco, one of the world’s leading integrated companies in the field of energy and petrochemicals, and Jiangsu Eastern Xinghong Company Limited (Eastern Xinghong), on Wednesday, September 27 (2023), signed a framework cooperation agreement to enter. In advising on potential acquisitions.

Acquisition Agreement Targets – Step Report Seen by Special Energy Platform – Acquisition of 10% strategic stake in Jiangsu Xinghong Petrochemical Industry Group Co., Ltd. (Jinghong Petrochemical), a wholly-owned subsidiary of East Jinggang, the deal is subject to necessary assessments and approvals.

Big investments

Xinghong Petrochemical Company owns and operates an integrated refining and petrochemical complex with a production capacity of 320 million barrels per day, as well as a methanol-to-olefins and derivatives complex.

Through its wholly-owned subsidiaries, it also has a facility for the production of refined terephthalic acid, and its facilities are located in the Petrochemical Industrial Park in Jiangsu Province.

An Aramco employee walks near an oil tank at the Ras Dhanura oil refinery – photo from Reuters

Under the framework cooperation agreement, Saudi Aramco intends to supply crude oil and other raw materials to Shenghong Petrochemical Company. Saudi Oil Company and Shenghong Petrochemical Company intend to cooperate on a major expansion project, subject to the results of consultations between the two countries. Conclusion of parties and binding final agreements.

The new deal comes two months after Saudi Aramco closed a deal to buy a 10% stake in Rongsheng Petrochemical Co. for 24.6 billion Chinese yuan (3.4 billion US dollars).

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The deal includes the export of 480,000 barrels per day of Arabian crude oil to the largest integrated refining and petrochemical complex in China owned by Zhejiang Petroleum and Petrochemical Co., Ltd., a subsidiary of Rongsheng.

Energy security in China

Mohammed Yahya Al-Qahdani, Saudi Arabia’s head of refining, chemicals and marketing, said, “Through our partnership with East China Sea, we look forward to providing Aramco with the reliable energy needed for growth, development and the long-term sustainability of China’s energy security.

He added: “The signing of the structural cooperation agreement with Saudi Aramco is an important step in our strategy in the field of refining, chemicals and marketing, which aims to increase the company’s ability to convert Arab crude oil into chemicals. Our vision to expand into the Chinese market, one of the world’s leading markets in the energy sector, is to “make China We consider ourselves an important partner today and for decades to come.”

Eastern Singhong, listed on the Shenzhen Stock Exchange, is one of the leading integrated companies in the energy and chemical industry and is keen to adopt advanced technologies in its new businesses in the energy and materials sectors.

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Dollar hits 10-month high as interest rates linger, via Reuters



Dollar hits 10-month high as interest rates linger, via Reuters
© Reuters. One hundred US dollar bills in Seoul, a photo from the Reuters archive.

SINGAPORE (Reuters) – The dollar hit a 10-month high as the U.S. continues to dominate at long-term highs.

In recent trading, the euro fell 0.14 percent to $1.05575, its lowest level in six months at $1.05555. The euro is heading for a quarterly loss of more than three percent, its worst quarterly performance in a year.

It fell 0.09 percent to $1.2146 after touching a six-month low of $1.2141 on Wednesday. Sterling is heading for a quarterly loss of more than four percent.

It hit a ten-month low of 106.30.

The rise in earnings led to a fall in the yen, which rose slightly to 149.03 yen against the dollar after falling to an 11-month low of 149.185 on Tuesday.

Some experts believe a breach of the 150 yen threshold could force Japanese authorities to intervene to support the currency, as they did last year.

The Australian dollar was down 0.20 percent at $0.6385.

The New Zealand dollar was down 0.23 percent at $0.5931.

(Prepared by Marwa Salam for Arabic Bulletin – Editing by Marwa Gharib)

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