ANKARA: The Turkish lira dived 5 percent against the dollar on Thursday as a senior official said banks had started providing the currency to the London market again, after several days of the authorities withholding liquidity to underpin the currency.
The lira has come under renewed pressure over concerns about Turkey’s balance of payments, its ability to service its foreign debt, and calls from President Tayyip Erdogan for its central bank to cut interest rates.
As liquidity in the lira improved, the London overnight swap rate plunged to 50 percent from a crippling 1,200 percent a day earlier, Refinitiv Eikon data showed. It had stood at 24 percent last week.
“We made it clear that this process would not continue for long. It was a step against a speculative attack and it has ended. We do not expect a new speculative attack,” the official told Reuters.
But the lira weakened as far as 5.6465 per dollar from 5.33 on Wednesday. Last year, it plunged almost 30 percent against the dollar. As of 1105 GMT, it had clawed back some of its losses to 5.5950.
Sources had previously said lira liquidity would be squeezed until after Sunday’s local elections.
Rabobank emerging market forex strategist Piotr Matys said the market was braced for a volatile week for the currency after local elections on Sunday.
He said it was critical that Finance Minister Berat Albayrak “acts decisively and announces a comprehensive package of reforms with full details to preserve what has been left from Turkey’s severely damaged credibility.”
“His remarks since the lira crisis last year imply that he is fully aware of what investors expect from him. It is time to deliver,” he said.
Erdogan said on Thursday that the recent volatility in the lira stemmed from currency attacks by the United States and other Western countries and that Turkey must cut interest rates so that inflation falls, a view that counters that of many economists.
Central bank moves
The central bank has taken a series of steps to underpin the lira this week, and bankers said it took one more on Thursday, raising its total lira swap sale limit to 30 percent from 20 percent for swap transactions that have not matured.
It had raised the limit to 20 percent from 10 percent on Monday in a bid to boost the bank’s forex reserves, which fell sharply in the first two weeks of March.
Those falls have raised uncomfortable questions about Turkey’s balance of payments and its ability to roll over its foreign loans — and how and from whom it would seek emergency reserves if necessary.
Central Bank Governor Murat Cetinkaya said on Thursday the bank continued to strengthen its reserves “decisively,” state-owned Anadolu news agency reported.
Total reserves last week increased by $4.3 billion to $96.7 billion as of March 27, Cetinkaya said. He said net reserves rose $2.4 billion to $28.6 billion in the same period.
The London overnight swap rate had spiked on Wednesday to its highest on record by far, posing a huge hurdle to foreign investors looking to bet against the lira. They had instead sold off holdings of Turkish stocks and bonds, which have come under heavy pressure this week.
As the currency dropped on Thursday the cost of Turkey’s debt rose, with the yield on the benchmark 10-year bond climbing to 18.96 percent from 18.21 percent on Wednesday. It has risen 2.5 percentage points since the end of last week.
The main Istanbul share index, which weakened more than 12 percent in the week to Wednesday’s close, rose 0.73 percent on Thursday.
The head of the Turkish banking association, in a statement to Reuters on Wednesday, said lira swap rates had not surged due to banks withholding liquidity from foreign banks.
Turkish lira plunges, banks start providing liquidity again
Turkish lira plunges, banks start providing liquidity again
- The Turkish Lira lost 30 percent of its value against the US dollar last year
- Bank strategist said the market was ready to face increased volatility after elections
Dubai Real Estate Brokers Program attracts 25 strategic partnerships
RIYADH: Dubai’s property market is set to grow, with the Real Estate Brokers Program securing 25 partnerships with brokerage companies and developers in the private sector.
According to a press statement, the first phase of the program, launched in mid-March and headed by the Dubai Land Department, also received over 1,000 registrations from Emirati citizens.
Dubai Real Estate Brokers Program aims to increase the proportion of citizen brokers from 5 percent to 15 percent over the next three years to enhance the participation of young citizens in the Emirate’s developmental initiatives across various key sectors.
“This reflects the early positive impact of the program, showcasing citizens’ aspirations and eagerness to engage as real estate brokers and acknowledging the pivotal role of Dubai’s real estate sector locally and globally,” said Marwan bin Ghalita, acting director general of Dubai Land Department.
The initiative also aligns with Dubai Social Agenda 33, which seeks to triple the number of Emiratis working in the private sector.
Ghalita added that the program will help young talents in the nation enhance their productivity, therefore contributing to Dubai’s economic growth.
“Dubai consistently offers outstanding examples of collaboration and synergy between the private and public sectors,” said Ghalita.
He added: “With the program’s enrollment exceeding 1,000 citizens and real estate companies continuing to join the strategic alliance within a short period, we are diligently working toward achieving all the ambitious goals of the Dubai Real Estate Brokers Programme. In particular, Emirati real estate brokers will increase from 5 percent to 15 percent over the next three years.”
The program also encompasses additional initiatives, including Emirati real estate broker licensing, encouraging property developers to allocate a portion of their sales to local agents, and empowering citizens in the property sector.
Under the partnership with the private sector, citizen participants will receive various support packages to enhance the competitive edge of UAE people and enable them to take up roles in the real estate sector.
The press statement added that efforts would also be made to allocate 10 percent to 15 percent of the development company’s sales to be marketed by Emirati real estate brokers, therefore contributing to the empowerment of national citizens by offering them employment opportunities in the property market.
Dubai ruler approves new $35bn airport terminal
CAIRO: Dubai’s ruler Sheikh Mohammed bin Rashid Al-Maktoum approved a new passenger terminal in Al Maktoum International airport worth 128 billion dirhams ($34.85 billion), he said on Sunday in a post on X.
The Al Maktoum International Airport will be the largest in the world with a capacity of up to 260 million passengers, and five times the size of Dubai International Airport, he added, saying that all operations at Dubai airport would be transferred to Al Maktoum in the coming years.
The Al Maktoum airport will also include 400 terminal gates and five runways, he said.
The airport will be the new home of flagship carrier Emirates and its sister low-cost airline Flydubai along with all airline partners connecting the world to and from Dubai, Dubai state-owned airline Emirates chairman Sheikh Ahmed bin Saeed Al-Maktoum said.
The move “further solidifies Dubai’s position as a leading aviation hub on the world stage,” the CEO of Dubai Airports, Paul Griffiths, was quoted as saying by the Dubai Media Office.
Oil Updates – prices fall 1% on Israel-Hamas ceasefire talks, US inflation concerns
BEIJING/NEW DELHI: Oil prices were down 1 percent on Monday, erasing gains from Friday as Israel-Hamas peace talks in Cairo eased fears of a wider conflict in the Middle East and US inflation data further dimmed the prospects of interest rate cuts anytime soon, according to Reuters.
Brent crude futures fell by as much as 98 cents, or 1.09 percent, to $88.52 a barrel by 9:44 a.m. Saudi time. West Texas Intermediate futures were down 83 cents, or 0.99 percent, at $83.02 a barrel.
Stepped-up efforts to mediate a ceasefire between Israel and Hamas moderated geopolitical tensions and contributed to the weak opening on Monday, IG market analyst Tony Sycamore said. A Hamas delegation will visit Cairo on Monday for peace talks, a Hamas official told Reuters.
Israel’s foreign minister said on Saturday a planned incursion into Rafah, where more than one million displaced Palestinians are sheltering, could be put off in the event of a deal that involves the release of Israeli hostages.
A White House spokesperson said Israel had agreed to listen to US concerns about the humanitarian effects of the potential invasion.
Markets are also on watch for the US Federal Reserve’s May 1 policy review.
“Also playing a part are some nerves ahead of this week’s Federal Open Market Committee meeting which is expected to come with a more hawkish tone,” Sycamore said.
US inflation rose 2.7 percent in the 12 months through March, data on Friday showed, above the Fed’s target of 2 percent. Lower inflation would have increased the likelihood of interest rate cuts, which would stimulate economic growth and oil demand.
“The sticky US inflation sparks concerns for ‘higher-for-longer’ interest rates,” leading to a stronger US dollar and putting pressure on commodity prices, independent market analyst Tina Teng said.
The dollar strengthened on the prospect of higher-for-longer interest rates. A stronger dollar makes oil more expensive for those holding other currencies.
Further weighing on the outlook for oil demand, China’s industrial profit growth slowed down in March, official data showed on Saturday, in the latest sign of frail domestic demand in the world’s second largest economy.
Cumulative profits of China’s industrial firms rose 4.3 percent to 1.5 trillion yuan ($207 billion) in the first quarter from a year earlier, compared to a 10.2 percent rise in the first two months.
But oil prices could swing higher again if US inventory data and China’s PMI index show improvements this week, Teng said.
Brent had settled up 49 cents and WTI up 28 cents on Friday on concerns about disruptions to supply from events in the Middle East.
The market brushed aside potential supply disruptions stemming from Ukranian drone strikes on the Ilsky and Slavyansk oil refineries in Russia’s Krasnodar region over the weekend. The Slavyansk refinery had to suspend some operations after the attack, a plant executive said.
Algeria asked by Europe to boost gas supply
- Regional, global conflict affecting energy industry, says Algeria FM
- Key constraints are Israel war on Palestine, Ukraine-Russia battle
RIYADH: Algeria has been asked by its partners in Europe to increase gas supply because regional and global conflicts have affected the industry, the country’s foreign minister said on Sunday.
Speaking at a special World Economic Forum meeting in Riyadh, Ahmed Attaf said his country has established a “very complex network of cooperation” with its partners in the region.
“We are a Mediterranean country. We are a gas-producing country. We are asked by our partners in Europe more and more to deliver additional quantities of gas,” he said.
Speaking about how the global environment has changed over the past two-and-a-half years, Attaf said that conflict has affected the energy market, which requires more effective intervention from the UN and its Security Council.
“We have, of course, the conflict in Ukraine that is impacting our region. We have the Palestinian-Israeli conflict that is also impacting our region, and we have the Sahel region. And we are also feeling the impact of the deteriorating situation in this region on the Euro-Mediterranean area,” he added.
He said the “sophisticated” energy cooperation did not come at “the cost of our commitments to alleviating the effects on our environment.”
Saudi Arabia committed to preserving environment, water resources, minister tells WEF
- Nation providing incentives for private sector to become more engaged, Abdulrahman Al-Fadley says
DUBAI: Saudi Arabia has detailed plans for the protection of its lands and environmental resources, the Minister of Environment, Water and Agriculture said on Sunday.
Speaking at the World Economic Forum in Riyadh, Abdulrahman Al-Fadley said: “We have devised our plans based on the preservation of our environment and the management of our water resources. The Kingdom is also providing incentives for the private sector to become more engaged and more responsible toward the environment.”
With 40 percent of lands around the world degraded and further degrading at an alarming rate, critical action is needed as the UN Convention to Combat Desertification COP16 is set to take place in Riyadh in December.
Al-Fadley said Saudi Arabia had preserved millions of hectares of land and set up programs for cloud seeding and increasing the number of dams in the country.
“This will not only be beneficial to the Kingdom but for the whole region,” he said. “With us hosting COP16 we are hoping to give the meeting the importance it commands. We don’t want matters to go back to the status quo after COP16 ends.”
Tariq Al-Olaimy, a member of the Global Shapers Community Foundation Board at the WEF, commended King Salman for his land restoration efforts.
“When you put nature first, you are equally putting people first,” he said. “Nature is our greatest collaborator … There is no successful growth story without successful land restoration and this starts inwardly, through our religion, community, values and moral clarity.”
Ibrahim Thiaw, secretary of the UNCCD, warned of global repercussions if the world did not pay heed to environmental safekeeping.
“Entire ecosystems are being destroyed through actions and inactions,” he said. “There has been a 29 percent increase in droughts in the past few years and that is affecting 1.8 billion people around the world. For poor nations that is disastrous and carries a large death toll of animals, people and agriculture. We have to be more proactive and not just emergency-ready. We must attempt to avoid emergencies.”
Thiaw said the Panama Canal’s functionality had been reduced by 12 percent, which was causing a problem for supplies.
“Demand is increasing while resources are shrinking,” he said. “As humanity we have been looking at resources as if they are unlimited. We have not been managing them. Companies need to reset their relationship with nature and we need to focus on land restoration to keep going.”
Naoki Ishii, director of the Center for Global Commons, had similar concerns.
“We are on a collision course,” he said. “The only solution is to modify our economic system. COP16 must be transformative for all of us. We need the political momentum to implement positive changes.
“If we are able to push those efforts, economically and ideally speaking, that will be a game changer.”
