Turkish central bank holds rates, drops policy pledge under new chief

Turkish central bank holds rates, drops policy pledge under new chief
Turkey's Central Bank headquarters is seen in Ankara. (Reuters)
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Updated 15 April 2021

Turkish central bank holds rates, drops policy pledge under new chief

Turkish central bank holds rates, drops policy pledge under new chief
  • Lira slips 0.7% on announcement
  • Inflation could reach 19% before mid-year

ISTANBUL: Turkey’s central bank held rates steady at 19 percent as expected on Thursday and dropped a pledge to tighten policy further if needed, in its first decision since President Tayyip Erdogan fired the hawkish former governor and sparked a market selloff.
In a statement, the bank also ditched last month’s pledge to “decisively” maintain a tight monetary policy “for an extended period” to address inflation, which has risen above 16 percent and been in double-digits for most of the last four years.
The lira slipped as much as 0.7 percent to 8.125 versus the dollar after the bank under new governor Sahap Kavcioglu replaced the hawkish guidance with a softer assessment of risks to inflation that analysts said signaled interest rate cuts were on the way.
Erdogan’s shock removal last month of Kavcioglu’s predecessor Naci Agbal, a respected policy hawk, sent foreign investors fleeing from Turkish assets on concerns that rates would be quickly slashed.
But Kavcioglu — who had previously criticized Agbal’s rate hikes — has since promised no abrupt changes. Those assurances as well as the more-than 10 percent lira selloff had convinced analysts that policy would remain steady for now.
The central bank said it maintained a tight stance in the face of lofty inflation expectations, adding rates would remain above inflation until it is clear that price pressure is easing.
John Hardy, FX strategy head at Saxo Bank, said the currency had weakened on Thursday because Agbal’s pledges were scrapped.
“Any daylight they see, they are going to want to cut rates. Holding them here (today) is just an acknowledgment they can’t get away with it for now,” he said.
In a Reuters poll, most economists had predicted no change to the one-week policy rate this week, but saw easing from around mid-year, to settle at 15 percent by year-end.
Last month, the central bank under Agbal had raised rates by a more-than-expected 200 basis points to levels last touched in mid-2019 to dampen inflation and support the currency.
Before taking the job, Kavcioglu had said such a policy was wrong for Turkey and also espoused Erdogan’s unorthodox view that high rates cause inflation.
Erdogan has repeatedly called for monetary stimulus to help the economic rebound. He has fired three bank chiefs in two years, eroding monetary credibility.
The lira plunged 15 percent immediately after Agbal’s dismissal before a rebound, and foreign investors dumped the most bonds and stocks in 15 years over the following week.
Depreciation boosts inflation via imports, delaying any rate cut plans, analysts say.
Inflation is expected to reach as much as 19 percent before mid-year. Yet few analysts see another rate hike given Erdogan’s repeated calls for stimulus — including one this month for single-digit rates.
The change in tone under Kavcioglu reflects “preparation being made to cut the policy rate,” said Haluk Burumcekci of Istanbul-based Burumcekci Consulting.
Ratings agencies say premature easing could again hammer the lira and raise risks of a balance-of-payments crisis given Turkey’s depleted FX reserves and its $160 billion in short-term foreign debt.
Citing sources, Reuters reported Erdogan ousted Agbal in part because he was uncomfortable with the bank’s investigation into some $128 billion in FX sales undertaken during his son-in-law Berat Albayrak’s stint as finance minister.


Saudi copycat watchdog destroys 5 million products amid global counterfeit crackdown

Saudi copycat watchdog destroys 5 million products amid global counterfeit crackdown
Updated 7 min 19 sec ago

Saudi copycat watchdog destroys 5 million products amid global counterfeit crackdown

Saudi copycat watchdog destroys 5 million products amid global counterfeit crackdown
RIYADH: The Saudi Authority for Intellectual Property destroyed about five million products violating intellectual property regulations during the past year.
It was working in tandem with the Zakat, Tax and Customs Authority and the Ministry of Information.
Counterfeit commercial goods accounted for about 40 percent of the tally, amounting to two million goods, while nearly three million products were defined
as a violation of intellectual property rights.
The Authority seized 11,620 products that violated intellectual property in five cities, Al Eqtisadiah reported.
It warned against promoting or trading in any product that violates intellectual property rights, or any behavior that violates intellectual property regulations.
Governments and corporations are increasing their efforts to crack down on counterfeit goods as rogue operators use e-commerce to boost sales.
Amazon said this week that it blocked more than 10 billion suspected listings of counterfeit goods on its platform last year as part of a global crackdown in the face of pressure from consumers, brands and regulators.
The e-commerce giant made the announcement in its first “brand protection report,” as part of its initiative to weed out listings of fakes by third-party sellers, AFP reported.

Saudi Grintafy football scout platform helps clubs to discover the next Messi

Saudi Grintafy football scout platform helps clubs to discover the next Messi
Updated 14 May 2021

Saudi Grintafy football scout platform helps clubs to discover the next Messi

Saudi Grintafy football scout platform helps clubs to discover the next Messi
  • Platform allows players to build their profiles
  • Saudi tech startups boom as sector attracts wave of cash

RIYADH: A Saudi startup aims to help the world’s biggest football clubs make talent scouting more efficient.
The history of football is full of tales of chance sightings by a scout that has led to many a glittering career in the game.
At the same time, across amateur and weekend leagues the world over, there are many talented footballers who are never seen by a scout and never have a professional career.
Saudi startup Grintafy aims to help make that process more efficient by helping footballers build their profile in the game through the ratings of fellow players which can in turn be showcased to potential scouts and clubs.
It is one of several new Saudi technology startups that has started to make international waves as the sector attracts a wave of venture capital.
West Ham United last week become an official club partner for the fledgling platform which will see Grintafy have a presence across the club’s growing global digital channels as well as becoming the presenting partner of all academy match highlights.
The agreement allows coaching and technical staff at West Ham full access to view Grintafy user profiles and stats.
Selected players will then be chosen and invited to an official tryout in England.
The relationship will also see West Ham United Academy coaches deliver coaching programs in the Middle East.
“At West Ham United, we pride ourselves on our ability and capacity to nurture talent. We are excited to work in partnership with Grintafy to create experiences for aspiring players,” said Nathan Thompson, commercial director at West Ham United.
Grintafy will also be holding regular regional and national open tryouts to find the best of the best. Players chosen will have the once in a lifetime opportunity to travel to England and train like a West Ham academy player.
“Grintafy was started so that every young footballer has an opportunity to make their dream come true, regardless of their economic status or access to resources,” said Grintafy CEO Majdi Al-Lulu. “This partnership ensures that we are bringing international opportunities to the Kingdom and keeping our focus on the 2030 vision. West Ham has a rich history and pedigree for developing talent and giving youth a platform to shine. This perfectly aligns with our key values.”


Huge Titanic replica to open in China

Huge Titanic replica to open in China
Updated 14 May 2021

Huge Titanic replica to open in China

Huge Titanic replica to open in China
  • Six-year construction was longer than original Titanic build
  • Site features a replica of Southampton Port seen in James Cameron’s 1997 disaster epic

SUINING: The Titanic is being brought back from the deep, more than a century after its ill-fated maiden voyage, at a landlocked Chinese theme park where tourists can soon splash out for a night on a fullscale replica.
The project’s main backer was inspired to recreate the world’s most infamous cruise liner by the 1997 box office hit of the same name — once the world’s top-grossing film and wildly popular in China.
The original luxury vessel, the largest of its time and branded “unsinkable” by its owners, has become a byword for hubris ever since it plunged into the depths of the Atlantic in 1912 after striking an iceberg, leaving more than 1,500 people dead.
Investor Su Shaojun says he was motivated to finance the audacious, 260-meter-long (850-foot-long) duplicate to keep memories of the Titanic alive.
“I hope this ship will be here in 100 or 200 years,” Su said.
“We are building a museum for the Titanic.”
It has taken six years — longer than the construction of the original Titanic — plus 23,000 tons of steel, more than a hundred workers and a hefty one billion yuan ($153.5 million) price tag.
Everything from the dining room to the luxury cabins and even the door handles are styled on the original Titanic.
It forms the centerpiece of a Sichuan province theme park more than 1,000 kilometers (620 miles) from the sea.
The site features a replica of Southampton Port seen in James Cameron’s 1997 disaster epic, where Leonardo DiCaprio’s fictional character Jack swings on board after winning his ticket in a bet.
Tour buses play the film’s theme tune, Celine Dion’s “My Heart Will Go On,” on repeat.
It costs up to 2,000 yuan (around $150) to spend one night on the ship for the “five-star cruise service,” Su says, adding that with a functioning steam engine guests will feel that they are really at sea.
He was so excited by the challenge that he sold his energy industry assets, including a stake in several hydropower projects, to invest in the Titanic.
But even before opening, the replica has drawn plenty of controversy.
Online users have questioned whether the famous ship would attract tourists given the disaster that struck its real-life inspiration.
Others feared it would join other ambitious Chinese building projects that turned into white elephants — including a 2008 replica of the USS Enterprise, an American aircraft carrier, which cost over $18 million and was abandoned shortly after it opened.
But Su hopes as many as five million annual visitors will come to see his Titanic.
“This tourist volume should guarantee the return of our investment,” he added.
Project manager Xu Junnian said he felt it was important to preserve the vessel’s memory.
“The greatest significance of building this ship is to carry forward and inherit the great spirit of Titanic,” he said.
Aside from the enduring appeal of the Hollywood blockbuster, the Titanic has stolen headlines in China in recent weeks with the release of a new documentary called “The Six.”
The film tells the story of a group of Chinese travelers on board when the ship sinks, of whom six survived.
But the developers are hoping to rope in some bigger names to help draw visitors.
“We’d like to invite Jack, Rose and James Cameron to the inauguration ceremony,” Su said.


Riyals, euros or dollars: Women money changers at heart of Djibouti’s street economy

Riyals, euros or dollars: Women money changers at heart of Djibouti’s street economy
Updated 14 May 2021

Riyals, euros or dollars: Women money changers at heart of Djibouti’s street economy

Riyals, euros or dollars: Women money changers at heart of Djibouti’s street economy
  • The informal sector drives around two-thirds of economic activity in Djibouti

DJIBOUTI: They are a familiar sight on the busy streets of Djibouti: women clutching handbags bulging with dollars, euros, riyals and rupees, the money changers keeping the informal economy ticking over.
Perched on plastic chairs, feet propped on wooden steps, these “sarifley” as they are locally known are vital to the global cast of migrants, traders and soldiers passing through this tiny nation at the crossroads of Africa and Arabia.
Trading in money offers a safe, reliable way especially for women to feed their families, in a conservative country where they lag men in education and literacy.
“I have it all. Euros, English pounds, Turkish lira, dollars, Indian rupees, anything,” said Medina, who offered just her first name, flashing a purse she estimated held the equivalent of one million Djiboutian francs ($5,600/€4,700) in multiple currencies.
Customers and traders alike say that economic life would suffer a lot more friction without the money changers.
Camped at Rimbaud Square, overlooked by a grand mosque in the heart of Djibouti city, Medina and three other sarifley scan the bustling crowds for customers.
Before long a young man from Yemen, the war-torn country across the Bab-el-Mandeb strait from Djibouti, approaches in a flowing white tunic and turban, wanting to change Saudi riyals.
Medina exchanged a few words with the foreigner, tapped some calculations into her phone, then counted out a wad of crumpled Djiboutian francs retrieved from the depths of her bag.
“We bring Saudi riyals with us (to Djibouti) because our currency, with the war, keeps fluctuating all the time,” said the Yemeni, slipping away into the crowd as a police car crawled by.
Refugees from Yemen, migrants en route to the Gulf, foreign troops stationed in naval bases, Ethiopian truck drivers — Djibouti is a melting pot of cultures, and currencies, on the Horn of Africa.
“We also deal with Djibouti businessmen going abroad for their work, as well as foreigners and tourists,” said Noura Hassan, another sarifley in the capital.
When her husband died a decade ago, the mother-of-three started out with just her savings in francs, before acquiring more currencies.
Every day, Hassan refers to a printout from the local bank to gauge exchange rates and determines what to offer customers for the major currencies.
“It is a good job, and I am proud of it,” said the money changer, wearing a blue veil and black abaya, the traditional floor-length tunic worn by Muslim women.
In PK12, a busy neighborhood where many Ethiopians live, Ahmed jumped out of his tuk-tuk to change some Ethiopian birr on the roadside.
“The difference might be 10 or 20 francs, it’s not much,” said the rickshaw driver about the street rates compared to those officially on offer.
But those exchange offices are far away — whereas the sarifley are on every corner and marketplace.
“Without them, I would say that trade in PK12 would not be possible,” said Faiza, who sells khat, the popular narcotic plant that is a daily staple in Djibouti and other parts of the Horn.
“They make sure to feed their families ... We help each other like that,” the 25-year-old trader said.
The informal sector drives around two-thirds of economic activity in Djibouti, said researcher Abdoulkader Houssein Mohamed from the Djibouti Center for Studies and Research (CERD).
Of those engaged in the sector, three-quarters are women, he added.
Safety might be a concern, but in a country of just under one million inhabitants, even the capital feels like a village, the sarifley said — a reassurance when your line of work requires carrying bundles of cash on the streets.
Zahra, one sarifley in the city, said of thieves: “They don’t come near us. They are afraid.”
She also wasn’t too concerned about being scammed by a forger or unscrupulous seller trying to palm off counterfeit cash.
“Even if I was asleep and you handed me a forgery, I would know... Counterfeit cash, I’ll know. The real thing, I know. That’s my job isn’t it?“


Musk tweets, doge leaps and bitcoin retreats

Musk tweets, doge leaps and bitcoin retreats
Updated 14 May 2021

Musk tweets, doge leaps and bitcoin retreats

Musk tweets, doge leaps and bitcoin retreats
  • Markets have gyrated to Musk tweets for months since his interest in dogecoin sparked a hundred-fold rally

SINGAPORE: Bitcoin was pinned near its lowest in more than two months on Friday and headed for its worst week since February, while dogecoin leapt by a fifth as tweets from Tesla boss Elon Musk sent the two cryptocurrencies on a wild ride.
Markets have gyrated to Musk tweets for months since his interest in dogecoin sparked a hundred-fold rally in the previously ignored token’s value this year, while Tesla’s $1.5 billion bitcoin purchase helped it break past $50,000 in February.
Yet in an equally surprising U-turn he dented the world’s biggest cryptocurrency this week after announcing Tesla stopped accepting bitcoin in payment owing to environmental concerns, making investors uneasy about Musk’s influence on crypto prices.
Bitcoin is down nearly 15 percent this week at $49,804.
Dogecoin is down about a third since last Friday, having tumbled after Musk referred to it as a “hustle” on Saturday Night Live. It then jumped 20 percent after his latest comments that he was involved in work to improve its efficiency.
“Working with Doge devs to improve system transaction efficiency. Potentially promising,” Musk said on Twitter, vaulting dogecoin from about $0.43 to $0.52 on the Binance exchange.
It was unclear if Musk was referring to efficiency in terms of energy use, ease of use or suitability as a currency, said Mark Humphery-Jenner, an associate professor of finance at the University of New South Wales business school in Sydney.
Dogecoin consumes 0.12 kilowatt hours of electricity per transaction compared with 707 for bitcoin, according to data center provider TRG, but it is near impossible to use it to buy anything.
Almost worthless in late 2020, dogecoin is the latest darling of a frenzy gripping crypto markets that began last year as institutional investors announced big bitcoin purchases.
It has surged to become the fourth-largest cryptocurrency by market cap, according to CoinMarketCap.com. Second-biggest cryptocurrency ether has also soared more than 400 percent this year. It last sat at $3,865, steady for the week so far.
The huge moves have begun to attract regulatory scrutiny, and a Bloomberg report on Thursday which said major exchange Binance was under Justice Department investigation in the US added to some of the price pressure on cryptos this week.
Musk’s tweets and the market’s response may also invite attention, said Edward Moya, an analyst at brokarage OANDA.
“Tesla is drawing tremendous scrutiny for Musk’s cheerleading of Bitcoin,” he said. “If Tesla unveils a bet on dogecoin, regulators may have their eyes on Musk.”
Others, however, say the market might be more comparable to an old fashioned bubble.
“Dogecoin remains a lesson in greater fool theory,” said David Kimberley, analyst at investing app Freetrade, which posits that buying overpriced assets can be profitable, so long as there is a “greater fool” to buy them at ever higher prices.
“It’s being pumped by people that want to get rich quick (and Elon Musk),” he said.