Turkish lira falls to record low following Erdogan’s call for rate cut  

Turkish lira falls to record low following Erdogan’s call for rate cut  
Turkish lira banknotes are pictured at a currency exchange office in Istanbul, Turkey, August 13, 2018. (Reuters)
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Updated 02 June 2021

Turkish lira falls to record low following Erdogan’s call for rate cut  

Turkish lira falls to record low following Erdogan’s call for rate cut  
  • Turkish lira lost 0.6 percent of its value and hit a low of 8.88 lira to the US dollar
  • The drop came after President Recep Tayyip Erdogan announced his willingness to cut interest rates June 1

ANKARA: The Turkish lira again slumped to a fresh low early on Wednesday, losing 0.6 percent of its value and hitting a low of 8.88 lira to the US dollar after President Recep Tayyip Erdogan announced his willingness to cut interest rates June 1.

The drop is alarming in a country that already faces significant financial stress due in part to the coronavirus pandemic, with the lira’s credibility damaged and Turkey vulnerable to external shocks. 

Raising concerns about the autonomy of the Turkish Central Bank (CBRT), Erdogan, said he had spoken to the newly-appointed CBRT governor about cutting rates. “For that, we will reach July and August thereabouts so that rates can begin to fall,” he said. 

Over the last two and half years, Erdogan has replaced four CBRT governors. Naci Agbal, a respected figure and a market-friendly governor, was ousted in March after he hiked interest rates in reaction to global markets. On May 25, Erdogan also removed one of four CBRT deputy governors.

The current governor, Sahap Kavcioglu, has held interest rates stable at 19 percent and has resisted Erdogan’s pressure to lower them. 

“We have seen all this before. Investors do not want to see yet another premature rate cut, especially when inflation is stubbornly high, but most would not have been caught by surprise by Erdogan’s comments,” Wolfango Piccoli, co-president of Teneo Intelligence in London, told Arab News. 

The sudden change in the exchange rates for the lira, still one of the worst-performing currencies in the emerging markets, has been a direct reaction to the latest remarks from Erdogan, who believes that any cut in rates will decrease producer costs and will push consumer prices down. 

On Thursday, Turkish authorities will announce updated inflation data, which is currently at 17 percent. 

CBRT authorities held calls with investors and some foreign experts on Wednesday to inject credibility into the economic prospects of the country. 

“Erdogan has supported the argument that high rates fuel inflation, even though conventional economic theory says the opposite is true. A succession of central bankers had to deal with this and more often than not had to bend monetary policy to Erdogan’s will,” Piccoli said. 

The president’s relentless commentary on interest rates also reflects the institutional degradation that Turkey has been facing for years. The CBRT is one of the main victims of this process, Piccoli said. 

According to the latest official statistics, the number of people borrowing from banks has reached 34.5 million, while about 2.3 million people took out loans for the first time this year, especially consumer loans and credit card expenditures, with a significant rise in suicide rates amid financial strain. 

Daron Acemoglu, economist at the Massachusetts Institute of Technology (MIT), recently urged the Turkish government to keep its hands off the CBRT and underlined the importance of monetary policy independence. 

“It is accepted all over the world that the CBRT needs autonomy. There should not be any monetary policy based on instructions coming from the prime minister or president. When you do this, foreign capital will not come,” Acemoglu said. 

He also voiced his concerns over a potential deepening of Turkey’s current economic crisis. 

Nikolay Markov, senior economist at Pictet Asset Management in Switzerland, said Erdogan is focused on interest rates because current borrowing costs in the Turkish economy are too high and have started constraining domestic demand, which is one of the key growth pillars. 

“The economy definitely needs lower rates for its credit-based model to work properly and to boost GDP growth, which is currently not possible due to the still very high headline and core inflation and elevated inflation expectations,” he told Arab News. 

Markov believes that the CBRT is now again committed to delivering price stability, and despite the recent comments from the president, will not cut rates in the very near term, and not until the disinflation process is in place, so not before the summer. 

“Kavcioglu is trying to regain some CBRT credibility which was lost after the firing of Gov. Agbal back in March. The implication for investors is still a complicated one because offshore investors are still not convinced of the CBRT’s full commitment to price stability, as they still think the CBRT is dependent on the political pressure coming from the president,” he said. 

According to Markov, this will continue to trigger market and lira volatility in the period ahead. 

“Nevertheless, I have the impression that Kavcioglu is fundamentally a hawk and that he will try to delay the start of rate cuts as much as possible without offending the president. Overall, I think the earliest possible date for a rate cut is in July. A rate cut in June is off the table,” he said.


UN says Daesh committed war crimes at Iraqi prison

UN says Daesh committed war crimes at Iraqi prison
Updated 58 min 2 sec ago

UN says Daesh committed war crimes at Iraqi prison

UN says Daesh committed war crimes at Iraqi prison
  • ‘At least 1,000 predominantly Shiite prisoners were systematically killed’
  • Daesh fighters seized Iraqi cities and declared a self-styled caliphate in a large swathe of territory in Syria and Iraq in 2014

UNITED NATIONS: The head of a UN team investigating atrocities in Iraq said that Daesh extremists committed crimes against humanity and war crimes at a prison in Mosul in June 2014, where at least 1,000 predominantly Shiite Muslim prisoners were systematically killed.
Christian Ritscher told the UN Security Council on Thursday that evidence collected from mass graves containing the remains of victims of executions carried out at Badush Central Prison and from survivors shows detailed preparations of the attack by senior Daesh members followed by an assault on the morning of June 10 that year.
“Prisoners captured were led to sites close to the prison, separated based on their religion and humiliated,” he said. “At least 1,000 predominantly Shiite prisoners were then systematically killed.”
Ritscher said the investigators’ analysis of digital, documentary, survivors and forensic evidence, including Daesh documents, has identified a number of members from the extremist group, also known as IS or ISIL, who were responsible for the crimes.
As a result of the investigations, he said the UN Investigative Team to Promote Accountability for Crimes committed by the Daesh group in Iraq has concluded that Daesh committed “crimes against humanity of murder, extermination, torture, enforced disappearances, persecution and other inhumane acts” at Badush prison as well as the “war crimes of willful killing, torture, inhumane treatment, and outrage upon personal dignity.”
Daesh fighters seized Iraqi cities and declared a self-styled caliphate in a large swathe of territory in Syria and Iraq in 2014. The group was formally declared defeated in Iraq in 2017 following a three-year bloody battle that left tens of thousands dead and cities in ruins, but its sleeper cells continue to launch attacks in different parts of Iraq.
In May, Ritscher’s predecessor Karim Khan told the council that investigators had found “clear and compelling evidence” that Daesh extremists committed genocide against the Yazidi minority in 2014. He also said the militant group successfully developed chemical weapons and used mustard gas.
Ritscher hailed the “landmark moment” two days ago that saw the first-ever conviction of a Daesh member for the crime of genocide at the regional court in Frankfurt, Germany. The 29-year-old Iraqi was also convicted of crimes against humanity, war crimes and bodily harm resulting in death over the death of a 5-year-old Yazidi girl he had purchased as a slave with her mother and then chained up in the hot sun to die.
“We now have the chance, collectively, to make such prosecutions the norm, not a celebrated exception,” Ritscher said. “In cooperation with Iraqi authorities and those of the Kurdistan region, together with survivors and with the support of this council, we are building the evidence that can deliver meaningful justice for all those who suffered from ISIL crimes in Iraq.”
Ritscher said evidence collected relating to the Badush prison attacks underlined the detailed planning by Daesh in carrying out their atrocities.
The extremist group’s approach “is seen even more clearly in two other key lines of investigation that have accelerated in the last six months: the development and use of chemical and biological weapons by ISIL, and the financial mechanisms through which it sustained its campaign of violence,” he said.
The team’s evidence also “shows that ISIL clearly identified and then seized chemical production factories and other sources of precursor material, while also overtaking the University of Mosul campus as a hub for research and development,” Ritscher said.
The extremist group’s program became more sophisticated and investigators have identified more than 3.000 victims of Daesh chemical weapons attacks as well as its use of rocket artillery projectiles containing a mustard sulfur agent, he said.
In his next briefing to the Security Council, Ritscher said he will present the team’s findings on Daesh’s use of chemical weapons including the crimes it committed.
He also stressed the critical importance of bringing the Daesh’s financiers and those who profit from the group’s crimes to justice.
Ritscher said investigators have uncovered the inner workings of the Daesh central treasury and a network of senior leaders who also acted “as trusted financiers, diverting wealth that Daesh gained through pillage, theft of property from targeted communities and the imposition of a systematic and exploitative taxation system imposed on those living under ISIL control.”
He said the team recently shared information with the Iraqi judiciary on the use of money service businesses by the group “as key facilitators of their financing,” and it looks forward to expanding this kind of cooperation.


Hashemite kingdom’s Expo 2020 Dubai provides an authentic Jordanian experience

Hashemite kingdom’s Expo 2020 Dubai provides an authentic Jordanian experience
Updated 03 December 2021

Hashemite kingdom’s Expo 2020 Dubai provides an authentic Jordanian experience

Hashemite kingdom’s Expo 2020 Dubai provides an authentic Jordanian experience
  • Pavilion tells the story of the Hashemite kingdom from both the cultural and economic standpoints
  • Jordan has been hosting events designed to promote trade, cultural understanding and stimulate tourism

DUBAI There are two main types of pavilions at Expo 2020 Dubai: “Self-build” pavilions that were funded by the participating nations themselves, and those that either received financial assistance from, or were fully built by, the expo.

Despite an unassuming exterior, Jordan’s pavilion — which sits within an expo-built structure at the heart of the Mobility District — is a must-see.

This standard style of fitted pavilion has been transformed into a unique space filled with varying textures and experiences. The resultant atmosphere is inviting, stylish and sensory.

As soon as they enter the reception area, visitors are welcomed to the Hashemite Kingdom of Jordan. A relief display outlines the country’s territory and highlights the significance of its position between Turkey to the north and Saudi Arabia to the south.

Jordan’s pavilion at Expo 2020 Dubai captures the sights and sounds of the country through interactive, multimedia exhibits. (Supplied)

From there, visitors walk down a winding wooden path called the Siq, with every step on their journey accompanied by multimedia effects and sounds. In Jordan, the Siq is the pathway through rock canyons that marks the entrance to the Nabataean city of Petra, which was built 2,500 years ago.

The Siq at Expo 2020 Dubai is a 30-meter, wooden sided path that leads to the pavilion’s main exhibition stage. Here, visitors are invited to enjoy a one-of-a-kind, authentic Jordanian experience that will stimulate all of their senses.

At the end of the pathway, they are greeted by a series of tassel curtains that they must walk through to enter a room bustling with light and sound. It is alive with images of Jordanian landmarks and attractions, including Wadi Rum, The Dead Sea, archaeological sites and lush green landscapes.

In a matter of minutes, visitors can get a taste of the finest experiences Jordan offers, from the lowest land-based point on Earth, on the shores of the Dead Sea, to the highest viewpoints across the country.

For a more immersive experience, they can put on a headset and explore the country in virtual reality.

Visitors are encouraged to explore the exhibition space at their leisure and fully engage with the displays. Every element includes an interactive or sensory element. The highlight is an audio-visual journey that introduces the country’s treasures, past and present.

A PAVILION FOR EVERY NATION

Expo 2020 Dubai is the first World Expo to adopt a “One Nation, One Pavilion” approach, which means each of the 192 participating countries has its own pavilion.

This gives them the chance to showcase their national identities, stories, innovations and future strategies in dedicated spaces assigned to one of three key, themed districts devoted to a particular concept: Sustainability, Mobility or Opportunity. This gives visitors a chance to fully experience the beauty and culture of every participating nation.

To make the “One Nation, One Pavilion” goal a reality, host country the UAE set up an assistance fund to support the participation of countries that otherwise might not have been able to justify the cost.

Countries that received assistance were carefully selected based on criteria such as level of development, income and geography, with smaller landlocked countries and island nations given special consideration.

As a result Expo 2020 Dubai features two main types of pavilions: “Self-build” structures that were fully funded by the participating nations themselves, and those fully or partly funded by the expo.

Self-build pavilions vary in size, are spread across the expo site, and are accessible from the main concourses. They are large and diverse, featuring unique facades adorned with national symbols and branding. The largest of these pavilions belong to the UAE, China and India.

The structures built by, or with assistance from, the expo are more similar in external appearance, and surrounded by courtyards or exhibition spaces. The eligible developing countries were provided with a fully fitted pavilion of their own, complete with internal finishing, fittings and basic furnishings, situated at the heart of one of the themed zones to ensure high visibility.

Illuminated fields are projected onto the floor, and when stepped on they change shape and trigger the sounds of traditional Jordanian song and musical instruments, including the oud, nai and tabla.

The role of an expo pavilion, whatever its shape, size or design, is to tell the story of the country it represents from the cultural and economic standpoints.

While some of the interactive displays that help to do this in Jordan’s pavilion are fun and immersive, others provide more specialized, technical information on a range of business topics, including the country’s economy, its agenda for entrepreneurship and policies for female empowerment.

Despite an unassuming exterior, Jordan’s pavilion — which sits within an expo-built structure at the heart of the Mobility District — is a must-see.

Jordan links the content of its pavilion to Expo 2020’s wider, future-focused theme with a display dedicated to the launch of the first Jordanian satellite, CubeSat, which is one of the smallest of its kind.

The innovative design is the product of a cooperative program that partners engineering students at Jordanian universities with experts from NASA, under the supervision of Jordan’s Crown Prince Foundation. It is the first Jordanian venture in the space industry and was of particular interest during Expo 2020’s space-themed week.

Throughout the expo, Jordan will be hosting events designed to promote trade and cultural understanding and to stimulate inbound tourism. On Nov. 12, for instance, the country marked its National Day with a show at the expo featuring traditional music, a military band and other live performances.

Jordan’s pavilion at Expo 2020 Dubai includes a gift shop offering authentic artisan products from the Hashemite kingdom. (Supplied)

After experiencing all that the pavilion has to offer, visitors can browse a gift shop showcasing a wide range of beautiful and unique Jordanian products, including handbags, olive oil and beauty products derived from the minerals of the Dead Sea.

Artisans are on hand to explain the cultural significance of the products, including face masks adorned with the national colors, bracelets made from local turquoise and other natural stones, and tea trays painted and decorated in traditional styles.

A message at the entrance to the pavilion states: “Whatever appeals to you, no doubt you’ll find it in Jordan. This hospitable land was, and still is today, a destination to many who call it home. Its people are known for their generosity and hospitality, making Jordan a visitors’ haven.”

Jordanians who have visited the pavilion told Arab News it lived up to their expectations, capturing not just the sights and sounds but also the spirit of their home country. Visitors are, indeed, likely to find something that appeals to them, they added.


In latest breach, Iran’s Mahan Air hit with cyberattack

In latest breach, Iran’s Mahan Air hit with cyberattack
Updated 03 December 2021

In latest breach, Iran’s Mahan Air hit with cyberattack

In latest breach, Iran’s Mahan Air hit with cyberattack

TEHRAN: A cyberattack on Sunday disrupted access to Iran’s privately owned Mahan Air, state TV reported, marking the latest in a series of cyberattacks on Iranian infrastructure that has put the country on edge.

Mahan Air’s website displayed an error message saying the site couldn’t be reached. The carrier said in a statement that it had “thwarted” the attack and that its flight schedule was not affected, adding it has faced similar breaches in the past.

Many customers of Mahan Air across Iran received strange text messages on Sunday. A group calling itself Hoosyarane-Vatan, or Observants of Fatherland, claimed in the mass texts to have carried out the attack, citing the airline’s cooperation with Iran’s paramilitary Revolutionary Guard. The self-described hacking group did not provide any evidence.

Mahan Air flies from Tehran to a few dozen destinations in Asia, Europe and the Middle East.

The US Treasury Department, which polices compliance with sanctions, blacklisted the airline in 2011 for allegedly “providing financial, material and technological support” to the Revolutionary Guard’s elite Quds Force.


Tel Aviv most expensive city to live in, outranking Paris in new report

Tel Aviv most expensive city to live in, outranking Paris in new report
Updated 03 December 2021

Tel Aviv most expensive city to live in, outranking Paris in new report

Tel Aviv most expensive city to live in, outranking Paris in new report
  • Economists attribute the jump to a strong appreciation of the shekel against the dollar

TEL AVIV: Residents of Israel’s seaside metropolis Tel Aviv have for years complained of how expensive it is, with living costs taking a chunk out of their paychecks.

Now a new report affirms their quibbles. Tel Aviv has emerged as the most expensive city to live in, according to the Economist Intelligence Unit, a research group linked to the Economist magazine.

The city, which was previously ranked 5th most expensive, has now surpassed other pricy places like Paris and Singapore.

Economists attribute the jump to a strong appreciation of the shekel against the dollar.

In its report Wednesday, the Economist Intelligence Unit also pointed to a rise in grocery and transport costs.

The report did not include housing prices — another common complaint among young professionals and families trying to live in the bustling city.

“It’s really hard to live here. You pay the rent and you pay for something small and you live, like, from paycheck to paycheck so it’s really hard,” said Ziv Toledano, a transplant from northern Israel. He said his expenses have nearly doubled in Tel Aviv.

Israeli news outlets constantly compare the prices of basic goods in Israel to other Western nations, hammering into audiences what has been clear to their wallets for years: That the country is far more expensive than others.

Tel Aviv is Israel’s financial and cultural epicenter. It boasts a thriving high-tech scene, world-class restaurants and a stretch of Mediterranean beach lined by gleaming new hotels and condominiums.

The shekel is one of the world’s strongest currencies, with its value buoyed in large part by heavy foreign investment in the local high-tech scene.

Dan Ben-David, head of the Shoresh Institution for Socioeconomic Research and an economist at Tel Aviv University, said goods and services in Israel in general are more expensive than in other countries. Tel Aviv is more expensive because it is the country’s economic hub, with high-paying tech jobs drawing talent from across the country who are driving up prices of food and rent.

“Israel is expensive, and in that regard, Tel Aviv is more expensive than other places in Israel’s because that’s where the good jobs are,” he said.

The city draws even more Israelis wishing to live close to its vibrant cultural and social scene.

Compounding the issue, Ben-David said, is major congestion leading into the city and inadequate transit to its suburbs and surrounding cities, sending even more people wanting to reside in the city.

That, along with foreign buyers, has sent real estate prices skyrocketing, making purchasing an apartment in Tel Aviv almost unattainable for the average Israeli.

Even modest apartments in desirable areas can cost 4 million shekels, or over $1.2 million.

A decade ago, hundreds of thousands of Israelis took to the streets to demand a solution to the rising cost of living.

Successive Israeli governments have struggled to create better job opportunities in other parts of the country and attempts to extend public transit are ongoing, but slow.


Lebanese info min Kordahi to resign on Friday: Reuters

Lebanese info min Kordahi to resign on Friday: Reuters
Updated 03 December 2021

Lebanese info min Kordahi to resign on Friday: Reuters

Lebanese info min Kordahi to resign on Friday: Reuters

LONDON: Unconfirmed media reports suggested that Lebanese Information Minister George Kordahi is set to resign on Friday, Reuters reported on Thursday.
Kordahi’s resignation announcement was made following his meeting with Prime Minister Najib Mikati on Wednesday.
Kordahi’s party, Al-Marada, is looking into who will replace him, and has appointed Minister of Education Abbas Al-Halabi as the acting information minister until then, Lebanese Al-Jadeed TV reported.
Several Gulf countries severed diplomatic ties with Lebanon in protest made by Kordahi that were critical to the war in Yemen.