Turkey lira crashes to historic low on security, inflation

Turkish lira banknotes are seen in this photo illustration. (REUTERS File Photo)
Updated 03 January 2017
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Turkey lira crashes to historic low on security, inflation

ISTANBUL, Turkey: Turkey’s embattled currency the lira on Tuesday crashed to a new historic low against the US dollar due to higher than expected inflation figures and security worries after the Istanbul nightclub attack.
The lira was trading at 3.59 to the greenback, a loss in value of 1.38 percent on the day. Earlier it crashed through the 3.6 lira ceiling, the first time in history it has been this weak against the dollar.
The currency was battered by a surprisingly sharp uptick in December inflation which fueled expectations of rate rises in January.
Prices rose 8.5 percent in December from the same month the year earlier and also by 8.5 percent for the year as a whole. Prices rose 1.64 percent from November, much more than expected by analysts.
Meanwhile, the attack claimed by the Daesh extremist group on an Istanbul club on New Year’s night that killed 39 people also pressured the currency.
It was the latest in a string of attacks in Turkey in recent months that have battered the crucial tourism sector and harmed investment.
The lira has now lost 24 percent in value over the last six months against the dollar. Over the last two years it has now lost 53 percent in value, having traded at 2.34 to the dollar at the start of 2015.


OPEC rift deepens as Iran walks out of key meeting in Vienna

Updated 59 min 21 sec ago
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OPEC rift deepens as Iran walks out of key meeting in Vienna

VIENNA: Iran's oil minister walked out of a key meeting with OPEC peers on Thursday, as a rift deepened with regional rival Saudi over its push to ramp up the cartel's oil output.
"I do not think we can reach an agreement," Bijan Namdar Zanganeh told reporters at his Vienna hotel after storming out of talks with a group of ministers on the eve of a crucial OPEC meet.
The talks were meant to lay the groundwork for Friday's gathering of the 14-nation Organization of Petroleum Exporting Countries (OPEC), when the cartel will discuss easing a supply-cut deal with 10 partner countries that has cleared a global oil supply glut and pushed crude prices to multi-year highs.
The output curbs have been in place since January 2017 but Saudi Arabia, backed by non-member Russia, is now pushing to raise production again in order to meet growing demand in the second half of 2018.
But the proposal has run into resistance from Iran, Iraq and Venezuela, who would struggle to immediately raise output and fear losing market share and revenues if other countries open the spigots.
Iran is particularly vocal about its objections as it braces for the impact of fresh US sanctions on its oil exports after President Donald Trump quit the international nuclear agreement.
But Riyadh, which cheered Washington's exit from the nuclear pact, is under pressure from Trump to boost output in order to lower oil prices ahead of November's midterm elections.
Saudi Energy Minister Khalid al-Falih had earlier signalled a compromise could be in the works.
He acknowledged that a big production hike might be "politically unacceptable" to some OPEC countries and said it was important to be "sensitive" to those concerns.
The 24 nations in the pact, known as OPEC+, initially agreed to trim production by 1.8 million barrels a day but they have actually been keeping more than two million bpd off the market.
Observers believe a face-saving deal could be brokered if members simply stopped over-complying with the current pact, and agreed to stick to the original reduction quotas -- which would bring several hundred thousand more barrels to the market each day.
But that is easier said than done since much of the shortfall has come from Venezuela, where an economic crisis has savaged the nation's petroleum production.
Output has also plummeted in Libya, where fighting between rival factions has damaged key oil infrastructure.