ISTANBUL: The Turkish lira weakened more than 2 percent on Tuesday, briefly reaching 5.6125 against the dollar, after the US halted delivery of equipment related to the F-35 fighter aircraft to Turkey.
The lira stood at 5.5570 against the US currency in early London trade, compared with a close on Monday of 5.4913.
The lira has been volatile in the uncertain aftermath of local government elections, weakening 2.5 percent on Monday to 5.7 to the dollar before recovering ground.
In Istanbul, both the main opposition Republican People’s Party (CHP) and President Tayyip Erdogan’s AK Party claimed victory in the mayoral elections. Later, both candidates said CHP’s Ekrem Imamoglu was around 25,000 votes ahead, but the AKP said it was filing objections to the results.
US officials have told their Turkish counterparts they will not receive further shipments of F-35 related equipment needed to prepare for the arrival of the stealth fighter aircraft, sources told Reuters on Monday.
Washington’s step to block delivery of the jet comes amid fears in the US and other NATO allies, that radar on the Russian S-400 missile system will learn how to spot and track the F-35, making it less able to evade Russian weapons.
“The lira is under pressure as now the focus is back on structural problems for the Turkish economy,” said Nikolay Markov, a senior economist at Pictet Asset Management.
The widening current account deficit could deepen Turkey’s economic recession through a further depreciation of the currency leading to higher inflation and borrowing costs, Markov said.
“The central bank should raise policy rates but that won’t happen because of pressure from the government,” although AK Party losses in the cities could reduce the pressure authorities were able to exert on the bank, he said.
Turkish lira tumbles after US halts F-35 equipment delivery
Turkish lira tumbles after US halts F-35 equipment delivery
- The lira has been volatile in the uncertain aftermath of local government elections
- US officials have told their Turkish counterparts they will not receive further shipments of F-35 related equipment
GCC chambers plan Gulf Guarantee project to boost intra-regional trade
DAMMAM: The Federation of GCC Chambers, in cooperation with the Customs Union Authority, intends to launch the Gulf Guarantee Project to provide a unified mechanism for exports and trade transactions and to enhance the efficiency of intra-GCC trade, which reached about $146 billion by the end of 2024, Saleh Al-Sharqi, Secretary-General of the federation, told Al-Eqtisadiah.
Al-Sharqi said, on the sidelines of his meeting with media representatives at the federation’s headquarters in Dammam, that the initiative represents a qualitative leap in supporting intra-GCC trade by facilitating transit movement through a single point, contributing to cost reduction, accelerating the flow of goods, and enhancing the reliability of trade operations among Gulf markets.
He explained that the federation recently launched a package of strategic initiatives, including the Tawasul initiative aimed at strengthening communication among Gulf business owners and supporting the building of trade and investment partnerships, in addition to the Gulf Business Facilitation initiative, which seeks to address challenges facing Gulf investors and traders, simplify procedures, and improve the business environment across member states.
He noted that these initiatives fall within an integrated vision to address obstacles hindering investment and intra-regional trade flows by developing regulatory frameworks, activating communication channels between the public and private sectors, and supporting Gulf economic integration in line with the objectives of the Gulf Common Market.
In a related context, the Secretary-General affirmed the direction of GCC countries to leverage artificial intelligence technologies to support trade and investment flows, stressing the importance of establishing a unified Gulf committee for artificial intelligence to coordinate efforts and exchange expertise among member states. He said the federation will support this direction in the coming phase, drawing on leading international experiences, particularly the Chinese experience in this field.
Regarding the recently announced electric railway project between Riyadh and Doha, Al-Sharqi revealed that technical and advisory committees are working to complete the necessary studies for the project, confirming that it will positively impact passenger and freight movement between the two countries, enhance Gulf logistical integration, and support regional supply chains.
On investment opportunities available to Gulf nationals in the Syrian market, he said the federation is coordinating with private sector representatives in Syria to overcome obstacles that may face the flow of Gulf investments, in addition to working to provide adequate guarantees to protect these investments and ensure a stable and attractive investment environment.
In response to a question from Al-Eqtisadiah about the impact of tariffs imposed by the US on imports of iron, steel, and aluminum, he said that economic and technical committees in GCC countries are continuously monitoring the repercussions of these tariffs on the Gulf private sector, assessing their effects, and taking the necessary measures to protect it from any potential negative impacts.
Al-Sharqi also pointed to the launch of two specialized committees in the transport and logistics sectors and in real estate activities, given their pivotal role and active contribution to Gulf gross domestic product, stressing that developing these two sectors is a fundamental pillar for enhancing economic diversification and increasing the competitiveness of GCC economies.
He added that during the past year the federation held more than 40 meetings and official engagements with Gulf and international entities, participated in nine regional and international events to strengthen the presence of the Gulf private sector on the global stage, and signed 12 agreements and memoranda of understanding with Gulf, regional, and international entities to open new horizons for economic and investment cooperation.
During the same year, the federation launched four digital platforms to support the Gulf private sector, bringing the total number of its digital platforms to eight serving the business community across member states.
The Secretary-General affirmed that the federation will continue working with relevant economic entities to unify procedures and regulations, reduce non-tariff barriers, and accelerate mutual recognition of products and standard specifications, in a way that enhances the competitiveness of the Gulf economy and supports the growth of intra-GCC trade.
