Turkish finance minister says does not see big risk to economy

Turkish lira banknotes are pictured at a currency exchange office in Istanbul, Turkey August 13, 2018. (File/Reuters)
Updated 29 August 2018
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Turkish finance minister says does not see big risk to economy

  • Turkish Finance Minister Berat Albayrak said he does not see a big risk to the country’s economy or financial system
  • He does not see a big risk because Turkey’s net public debt and household debt are very low and its financial system is very strong

ISTANBUL: Turkish Finance Minister Berat Albayrak does not expect a big risk to the economy or financial system, he was quoted as saying on Wednesday, amid what investors say is a widening crisis caused by a sell-off in the lira.
The lira has lost around 40 percent of its value this year, driving up the cost of fuel and food and heightening concern about an economic downturn and risks to banks. The currency has been weakened by worries about President Tayyip Erdogan's grip on monetary policy and worsening rift with the United States.
Ratings agency Moody's on Tuesday sounded more alarm about Turkish banks, downgrading 20 financial institutions and citing the increased risk of a deterioration in funding.
However, the newspaper Hurriyet quoted Albayrak, who is Erdogan's son-in-law, as saying he did not see a major threat to the economy.
"We do not see a big risk about Turkey's economy or financial system," he told reporters on his flight back from Paris earlier this week, according to Hurriyet.
There were no risks because Turkey's net public debt and household debt are low and its financial system is strong, Albayrak said.
Albayrak has signalled that Turkey wants to mend its ties with the European Union as it faces what he said are moves by the United States that threaten the global economy. He and Erdogan have also emphasised that Turkey would aim to trade in local currencies rather than use the dollar.
The newspaper also quoted him as saying that steps would be taken to prevent foreign currencies from being used for real estate and shopping-mall store rents and sales.
Retailers in Turkey's malls, which often pay their rent in dollars, have also said their businesses were suffering due to the ailing lira.


Oil rises after US Navy destroys Iranian drone

Updated 19 July 2019
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Oil rises after US Navy destroys Iranian drone

  • The International Energy Agency is revising its 2019 global oil demand growth forecast to 1.1 million barrels per day
  • Speculators have exited options positions that could have provided exposure to higher prices in the next several years

TOKYO: Oil prices rose more than 1 percent on Friday after the US Navy destroyed an Iranian drone in the Strait of Hormuz, a major chokepoint for global crude flows, again raising tensions in the Middle East.
Brent crude futures were up 82 cents, or 1.3 percent, at $62.75 by 0100 GMT. They closed down 2.7 percent on Thursday, falling for a fourth day.
West Texas Intermediate crude futures firmed 61 cents, or 1.1 percent, at 55.91. They fell 2.6 percent in the previous session.
The United States said on Thursday that a US Navy ship had “destroyed” an Iranian drone in the Strait of Hormuz after the aircraft threatened the vessel, but Iran said it had no information about losing a drone.
The move comes after Britain pledged to defend its shipping interests in the region, while US Central Command chief General Kenneth McKenzie said the United States would work “aggressively” to enable free passage after recent attacks on oil tankers in the Gulf.
Still, the longer-term outlook for oil has grown increasingly bearish.
The International Energy Agency (IEA) is reducing its 2019 oil demand forecast due to a slowing global economy amid a US-China trade spat, its executive director said on Thursday.
The IEA is revising its 2019 global oil demand growth forecast to 1.1 million barrels per day (bpd) and may cut it again if the global economy and especially China shows further weakness, Fatih Birol said.
“China is experiencing its slowest economic growth in the last three decades, so are some of the advanced economies ... if the global economy performs even poorer than we assume, then we may even look at our numbers once again in the next months to come,” Birol told Reuters in an interview.
Last year, the IEA predicted that 2019 oil demand would grow by 1.5 million bpd but had already cut the growth forecast to 1.2 million bpd in June this year.
Speculators have exited options positions that could have provided exposure to higher prices in the next several years, market participants said on Thursday.
US offshore oil and gas production has continued to return to service since Hurricane Barry passed through the Gulf of Mexico last week, triggering platform evacuations and output cuts.
Royal Dutch Shell, a top Gulf producer, said Wednesday it had resumed about 80 percent of its average daily production in the region.