Turkey’s new central bank chief seen as interest rate dove

Turkey’s central bank governor Murat Cetinkaya. (Reuters)
Updated 08 July 2019

Turkey’s new central bank chief seen as interest rate dove

  • Uysal has a degree in economics and a postgraduate degree in banking. He earned his master’s in inflation targeting in Turkey and in the world. He was born in 1971

ANKARA: Turkey’s new central bank governor Murat Uysal, who served as deputy governor for three years before the shock dismissal of his boss, is known as one of the more dovish members of the bank’s interest rate setters.
He has less than three weeks to prepare for the next rate-setting meeting, under pressure from President Tayyip Erdogan’s calls for lower rates to kick-start an economy in recession.
A fall in inflation last month had added to expectations of a rate cut on July 25, but likely US sanctions over Turkey’s purchase of Russian air defense systems, combined with investor jitters over Erdogan’s sacking of the bank governor, could put the lira under renewed pressure and make it harder to cut rates.
Economists and bankers say Uysal has been one of the more dovish members of the Central Bank’s Monetary Policy Committee, describing his views on interest rates as closer to the Turkish president than the previous governor.
“We know that Uysal is more sympathetic about a rate cut than (former governor Murat) Cetinkaya, and that’s why he has been appointed as the central bank governor,” said a senior Turkish banker who predicted a significant rate cut.
Uysal has worked in banking for two decades, holding several senior positions at the majority state-owned Halkbank and its subsidiaries. Bankers say he was respected for his trading in foreign exchange, government debt and derivatives.
“Uysal is on top of money and forex markets. He knows how to read the pulse of markets. He knows the mechanisms of banking and central banking,” a senior Turkish official said.
However, some point to his relative inexperience of monetary policy. “He is not a proper economist, rather a banker,” said one Turkish economist who asked not to be named. “My hunch is that his knowledge of monetary policy has been obtained through ‘on the job training’ as deputy governor.”
The Central Bank said on Saturday Uysal would fully communicate how the bank plans to attain “price stability and financial stability.”
“He will prefer much more frequent communication with markets,” the Turkish official said. “He will be able to explain himself and the central bank policies to the markets and the public effectively.”
Another economic source said Uysal’s communication skills “will stand out,” as he tackles market perceptions that he was appointed to do what the president wants, adding however: “It’s no secret that he defends low rates.”
Uysal has a degree in economics and a postgraduate degree in banking. He earned his master’s in inflation targeting in Turkey and in the world. He was born in 1971.


Afghan pomegranate growers squeezed as prices drop

Updated 32 min 50 sec ago

Afghan pomegranate growers squeezed as prices drop

  • Renowned for its reputed health benefits, the pomegranate is a point of pride for Afghan farmers
  • In Kandahar province, the prized crimson fruit could grow to the size of small melons

KANDAHAR, Afghanistan: Pomegranate farmers in southern Afghanistan — where growing the juicy fruit is an important alternative to opium poppy production — say they are feeling the squeeze this year, with business blemished by chilly weather, pests and export woes.

The prized crimson fruit, globally renowned for its reputed health benefits, is a point of pride for Afghan farmers, particularly in Kandahar province, where luscious pomegranates the size of small melons dangle from trees.

Every autumn, Afghans start drinking pomegranate juice as the fruit bursts into season. Vendors pile carts high with gravity-defying pomegranate pyramids and offer fresh-squeezed beverages.

Haji Abdul Manan, who has been growing fruit in southern Kandahar for about 30 years, said a springtime cold snap damaged pomegranate flowers, impacting about 40 percent of his crop.

Problems also came from “lice, flies and a fungal disease,” he added, likening a type of greenfly to a natural disaster that had ruined more than 100 of the orb-shaped fruits daily.

“It is the duty of the Afghan government to spray all the gardens in Kandahar and to protect the pomegranates from diseases, but the government is not doing anything,” Manan complained.

Apart from its sweet flavor, fans point to pomegranates’ purported health benefits including high levels of vitamin C and antioxidants that are said to help protect the body.

“Kandahar’s pomegranates are the world’s best for flavor, color, and several times Kandahar’s pomegranates came first in competitions abroad,” Nasrullah Zaheer, the head of Kandahar’s chamber of commerce, told AFP.

In Kandahar, a medium-sized pomegranate goes for the equivalent of about 15 US cents, but by the time the fruit reach Kabul they cost about three times that.

Zaheer and several other farmers claimed Pakistan has this year imposed hefty tariffs on pomegranate imports, which, despite a drop in yield in some parts of Afghanistan, has led to an oversupply in the domestic market and sharp price drops.

But the Pakistan Embassy in Kabul denied such a drastic measure had been taken, saying Pakistan had raised duties only slightly because “Afghan exporters consistently understate the value of pomegranates and fruits.”

Muhammad Hafeez, a fruit and vegetable seller at a market in Islamabad, said the pomegranate supply from Kandahar had not been impacted.

“The supply is in bulk and the quality is good,” Hafeez told AFP.

Abdul Baqi Beena, deputy director of the Kandahar chamber of commerce, said about 40,000 to 50,000 tons of pomegranates were exported annually, including to India, Pakistan, the UAE and Saudi Arabia.

For years, Afghanistan and international donors tried to wean farmers from growing opium poppies by encouraging alternatives such as fruit crops.

But those efforts often failed as drug smugglers offered lucrative prices that normally far exceed the income from traditional agriculture.

The US Agency for International Development previously supported the farming of high-value crops, including pomegranates, as an alternative to opium production, but in recent years has shifted its focus to helping build export markets and supporting Afghan farmers that way.

“There is strong regional demand for high-value Afghan products that generate sufficient profit to justify export cost,” Daniel Corle, USAID team lead for development outreach and communications, said in an email.

“These include pomegranates, pine nuts, apricots, spices, gems, marble, and carpets, among others.”