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.


Aramco profits fall in tough quarter, but sees partial recovery from COVID-19 impact

Updated 10 min 47 sec ago

Aramco profits fall in tough quarter, but sees partial recovery from COVID-19 impact

  • Aramco see’s “partial recovery” from pandemic impact
  • Aramco president says company remains resilient

DUBAI: Saudi Aramco, the world’s biggest oil company, reported a net income of $6.57bn for the second quarter of 2020, the period which witnessed the most volatile oil market conditions for many decades.

The result, announced to the Tadawul stock exchange in Riyadh where the shares are listed, compared with income of $24.7 bn last year.

Amin Nasser, president and chief executive, said: “Despite COVID-19 bringing the world to a standstill, Aramco kept going. We have proven our financial resilience and operational reliability, setting a record in our business operations, while at the same time taking steps to ensure the health and safety of our people.”

Aramco’s dividend - a big attraction for the investors who bought into the world’s biggest initial public offering last year - will remain as pledged, Nasser added. Cash flow in the quarter amounted to $6.106 bn.

““Strong headwinds from reduced demand and lower oil prices are reflected in our second quarter results. Yet we delivered solid earnings because of our low production costs, unique scale, agile workforce, and unrivalled financial and operational strength. This helped us deliver on our plan to maintain a second quarter dividend of $18.75 billion to be paid in the third quarter,” he said.

Aramco said the loss was “mainly reflecting the impact of lower crude oil prices and declining refining and chemicals margins, partly offset by a decrease in production royalties resulting from lower crude oil prices and a decrease in the royalty rate from 20 per cent to 15 per cent, lower income taxes and zakat as a result of lower earnings, and higher other income related to sales for gas products.”

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Sales and revenue in the period - which saw oil prices collapse on “Black Monday” in April - fell 57 per cent to $32.861 bn from the comparable period last year. 

Nasser said he was cautiously optimistic that the world economy was slowly recovering from the depths of the pandemic lockdowns.

“We are seeing a partial recovery in the energy market as countries around the world take steps to ease restrictions and reboot their economies. Meanwhile, we continue to place people’s safety first and have adapted to the new normal, implementing wide-ranging precautions to limit the spread of COVID-19 wherever we operate.

“We are determined to emerge from the pandemic stronger and will continue making progress on our long-term strategic journey, through ongoing investments in our business – which has one of the lowest upstream carbon footprints in the world,” he added.

Aramco expects capital expenditure to be at the lower end of the $25bn to $30bn range it has already indicated for this year.