Turkey’s battered lira tumbles again over outlook fears

The currency was trading at 6.2 to the dollar, a loss of 3.1 percent on the day. (AFP)
Updated 27 August 2018
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Turkey’s battered lira tumbles again over outlook fears

  • The lira has lost just under a third in value against the dollar over the last month
  • The central bank is unwilling to raise interest rates in the face of stringent opposition from President Recep Tayyip Erdogan

ISTANBUL: The Turkish lira on Monday lost over three percent in value against the dollar as the same concerns that have propelled the embattled currency to record lows failed to dissipate after a summer break.
The lira has lost just under a third in value against the dollar over the last month, as anxiety over the coherence of domestic economic policy coupled with sanctions announced by the United States generated market panic.
The currency was trading at 6.2 to the dollar, a loss of 3.1 percent on the day. It lost similar ground against the euro to trade at 7.2.
Turkish markets reopened on Monday after a week off for public holidays and the coming week will be crucial for the lira as European markets become more active after the summer break.
Analysts said that the same factors that at one point drove the lira above 7 to the dollar for the first time in history remain in place.
The government has yet to convince markets with a comprehensive economic strategy to fight inflation of almost 16 percent and a widening current account deficit.
The central bank is unwilling to raise interest rates in the face of stringent opposition from President Recep Tayyip Erdogan, raising concerns over its independence.
And the crisis with the United States is far from being resolved. Turkey is still holding American pastor Andrew Brunson under house arrest, one of the key factors behind the troubled ties between Ankara and Washington.
Jameel Ahmad, global head of currency strategy and market research at FXTM, predicted the lira would “remain under pressure for some time as the same structural concerns that terrified traders away from Turkish assets still remain unchanged.”
Market sentiment was further clouded by economists at JPMorgan Chase slashing their growth forecast for Turkey in 2019 to just 1.1 percent.
Treasury and Finance Minister Berat Albayrak, who is Erdogan’s son-in-law and his top pointman on the economy, was meanwhile holding talks in Paris with French counterpart Bruno Le Maire, his office said.


Saudi Aramco discussing investments in India’s Reliance Industries

Updated 47 min 27 sec ago
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Saudi Aramco discussing investments in India’s Reliance Industries

  • World's biggest oil company targets petrochemicals
  • India is a top investment priority for Saudi Arabia

NEW DELHI: Saudi Aramco’s CEO Amin Nassar said on Wednesday that the company is in talks with India’s Reliance Industries for possible investments and is seeking other opportunities in the country.
Saudi Aramco signed an agreement in April with a consortium of state-owned Indian refiners to participate in a $44 billion refinery project on the country’s west coast.
“We are looking at additional investment in India so we are in discussions with other companies as well, including Reliance and others,” Nasser said in a panel discussion in New Delhi.
“We are looking at it. We are not limited to that investment which is the mega refinery,” Nasser said, referring to the west coast project, which would process 1.2 million bpd of crude and produce 18 million tons per year of petrochemicals.
Nasser is part of the entourage traveling with Saudi Arabia’s Crown Prince Mohammed bin Salman, who is in India for a one-day visit.
Reliance Industries, controlled by Asia’s richest man Mukesh Ambani, is India’s biggest refining and petrochemicals company and runs a 1.4 million barrels per day (bpd) refinery in western India. It plans to expand the capacity to 2 million bpd by 2030, according to plans shared with the Indian government.
Saudi Arabia, the world’s biggest crude oil exporter, is keen to expand further into oil refining and petrochemicals.
India would provide a fast growing market for oil and fuels and is already a steady buyer of Saudi oil.
“India is an investment priority for Saudi Aramco. India takes from us almost 800,000 barrels a day and by 2040 India’s total consumption will be around 8.2 million barrels per day,” Nasser said.
India is currently world’s third-biggest crude oil consumer with demand of 4.7 million bpd, according to government figures.
However, Aramco is already facing delays for the refinery project, planned for the western state of Maharashtra, as thousands of farmers have refused to surrender land for it.
Reuters reported on Tuesday the Maharashtra government is looking to move the refinery location.
Yousef Al-Benyan, the chief executive officer for SABIC, the Saudi Arabia-based petrochemical company that is the fourth largest in the world, was also on the panel. He said SABIC wants to expand its business and presence in India.