Turkey plans to tap into $6.6 billion reserves

Turkish Treasury and Finance Minister Berat Albayrak attends a news conference in Istanbul, Turkey, on April 10, 2019. (REUTERS/Umit Bektas/File Photo)
Updated 14 May 2019
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Turkey plans to tap into $6.6 billion reserves

  • Turkey’s budget recorded a 36.2 billon lira deficit in the first quarter of 2019
  • Turkey’s economy tipped into recession last year after the lira fell sharply

ANJARA: Turkey is working on legislation to transfer the Turkish Central Bank’s 40 billion lira ($6.6 billion) legal reserves to the government’s budget, three economic officials have told Reuters.

The country’s budget, the sources claimed, are much deeper in deficit than had been expected, prompting the move. It is unclear when a draft law would reach parliament, though one of the sources said it could happen “soon.”

Turkey’s economy tipped into recession last year after the lira fell sharply. The currency is now under pressure partly due to worries over the bank’s depleted foreign exchange reserves, meant to defend against another crisis.

Separate to foreign exchange reserves, “legal reserves” are what the central bank sets aside from profits by law to be used in extraordinary circumstances. At the end of 2018, they stood at 27.6 billion lira, according to the bank’s balance sheet data.

A second source with knowledge of the matter said last year’s “legal reserves” combined with this year’s amounted to the 40-billion lira figure, which was cited by all three people who spoke to Reuters.

“The Turkish Central Bank has around 40 billion lira in legal reserves. The transfer of this amount to the 2019 central administration budget was seen as suitable. This step aims at improving and strengthening the budget,” the second source said.

It remains unclear how much of the reserves would ultimately be transferred and what, if any, new requirements would apply to the bank.

Officials from the bank and the Treasury could not immediately be reached for comment.

The transfer would mark the second recent move by Ankara to tap the bank’s funds to boost its budget. In January, it transferred some 37 billion lira in profits to the Treasury three months earlier than scheduled.

“I do not remember the use of legal reserves before. This method came up to stop further deterioration of the budget,” the first source said.

“There needs to be legislation to transfer the bank’s legal reserves. The new legislation is planned to be presented to parliament soon.”

Turkey’s budget recorded a 36.2 billon lira deficit in the first quarter of 2019, according to Treasury and Finance Ministry data. The deficit is expected to reach 80.6 billion lira by the end of 2019, not taking the possible tranfer into account.


Amazon workers strike as ‘Prime’ shopping frenzy hits

Updated 16 July 2019
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Amazon workers strike as ‘Prime’ shopping frenzy hits

  • The protesters waves signs with messages along the lines of “We’re human, not robots”
  • The strike was part of an ongoing effort to pressure the company on issues including job safety, equal opportunity in the workplace, and concrete action on issues including climate change

SAN FRANCISCO: Amazon workers walked out of a main distribution center in Minnesota on Monday, protesting for improved working conditions during the e-commerce titan’s major “Prime” shopping event.
Amazon workers picketed outside the facility, briefly delaying a few trucks and waving signs with messages along the lines of “We’re human, not robots.”
“We know Prime Day is a big day for Amazon, so we hope this strike will help executives understand how serious we are about wanting real change that will uplift the workers in Amazon’s warehouses,” striker Safiyo Mohamed said in a release.
“We create a lot of wealth for Amazon, but they aren’t treating us with the respect and dignity that we deserve.”
Organizers did not disclose the number of strikers, who said employees picketed for about an hour in intense heat before cutting the protest short due to the onset of heavy rain.
The strike was part of an ongoing effort to pressure the company on issues including job safety, equal opportunity in the workplace, and concrete action on issues including climate change, according to community organization Awood Center.
US Democratic presidential contenders Kamila Harris and Bernie Sanders were among those who expressed support for the strikers on Twitter.
“I stand in solidarity with the courageous Amazon workers engaging in a work stoppage against unconscionable working conditions in their warehouses,” Sanders said in a tweet.
“It is not too much to ask that a company owned by the wealthiest person in the world treat its workers with dignity and respect.”
Amazon employees also went on strike at seven locations in Germany, demanding better wages as the US online retail giant launched its two-day global shopping discount extravaganza called Prime Day.
Amazon had said in advance that the strike would not affect deliveries to customers.
Amazon has consistently defended work conditions, contending it is a leader when it comes to paying workers at least $15 hourly and providing benefits.
The company last week announced plans to offer job training to around one-third of its US workforce to help them gain skills to adapt to new technologies.
Amazon has been hustling to offer one-day deliver on a wider array of products as a perk for paying $119 annually to be a member of its “Prime” service, which includes streaming films and television shows.
The work action came on the opening day of a major “Prime” shopping event started in 2015.
Now in 17 countries, the event will span Monday and Tuesday, highlighted by a pre-recorded Taylor Swift video concert and promotions across a range of products and services from the e-commerce leader.
Prime Day sales for Amazon are expected to hit $5 billion this year, up from $3.2 billion in 2018, which at the time represented its biggest ever global shopping event, JP Morgan analyst Doug Anmuth says in a research note.