Investors eye Thursday meeting of Turkish Central Bank amid currency volatility

A man changes Turkish lira for US dollars at a currency exchange shop, in Ankara, Turkey, Monday, Dec. 13, 2021. (AP)
Short Url
Updated 15 December 2021
Follow

Investors eye Thursday meeting of Turkish Central Bank amid currency volatility

  • The lira’s slide has fueled inflation as the economy depends on imports; in November, the lira lost 30 percent of its value and annual inflation reached 21.3 percent
  • Long queues to buy cheap bread have become the norm and some grocery stores have started to ration sales of milk and oil amid skyrocketing prices

ANKARA: The Turkish lira continues to suffer heavy losses against foreign currencies. It plummeted to nearly 15 to the dollar on Monday before the Central Bank of Turkey intervened.

Worries about the country’s ongoing economic policy are increasing among domestic and international investors, and another interest rate cut by 100 basis points to 14 percent is expected during Thursday’s meeting of the Central Bank, despite rising inflation.

However, such actions have been futile so far in the light of lira’s volatility. Ratings agency S&P has also downgraded Turkey’s outlook to “negative” due to an unclear policy direction and the rising external risks the country has been facing.

The lira depreciation has further increased the country’s inflation rate as the economy greatly depends on imports. Kilometers-long lines of people queuing to buy cheap bread have become the norm across the country.

Turkish President Recep Tayyip Erdogan met Central Bank Governor Sahap Kavcioglu and Finance Minister Nureddin Nebati on Monday. Nebati also met more than 60 representatives of the business community in an attempt to reassure them.

“The economy will recover very fast. You’ll see that we can deal with it without raising interest rates. Just trust us,” the finance minister said, adding that the country’s macroeconomic indicators are all positive.

In line with the unorthodox assumption that reducing interest rates will lower inflation, the Turkish government claims that the rate cuts and the lira’s downfall support a new national economic plan that promotes economic growth, cheap credit, production and exports.

“If we win, we’ll win together. If we lose, we’ll lose together,” Nebati said on Monday about the government’s new economic model.

Meanwhile, some grocery stores have started to ration sales of milk and oil amid skyrocketing prices.

In November alone, the lira lost about 30 percent of its value, while the official annual inflation rate reached 21.3 percent.

“The market has already priced in a further 100 basis points of rate cut (at the meeting) on Thursday — with the policy rate cut to 14 percent, which should also be the current cyclical low — which explains the recent further lira depreciation to a new record low,” Nikolay Markov, a senior economist at Pictet Asset Management in Switzerland, told Arab News.

“Against this backdrop, a decision not to cut rates on Thursday will be a clearly positive surprise as it will convey a positive message on the (central bank’s) independence from the government. That will be just enough to contain the lira depreciation and improve investors’ sentiment at least in the very short-term.”

Turkey’s top economic team has been discussing and explaining a new road map for the economy for a couple of weeks. Erdogan even suggested the country follows China’s economic-growth strategy by pursuing low interest rates and luring foreign investors with a devalued currency.

“It is a credit-driven and exports-oriented economic-growth model, which has worked well so far, especially in light of the quick and significant economic rebound in the aftermath of the first pandemic shock in summer 2020,” Markov said.

“Overall, the Turkish economy has been impacted only mildly by the pandemic shock, avoiding a recession in 2020, and is expected to grow at the stellar rate of 10.8 percent in real terms in 2021, which would be close to 14 percent above its prepandemic level.”

However, he added that the Turkish model is heavily reliant on cheap credit funding, which explains the government’s current obsession with the central bank’s policy interest rates, and its push for lower rates to reduce the private sector’s debt burden and hence boost credit growth.

Last month, Turkish exports reached an all-time high of $21.5 billion, a 33.4 percent year-on-year increase.

But economists warn that this type of model, which prioritizes credit, production, exports and growth, only works in the short term and is unsustainable in the medium-to-long term.

“This model leads to the build-up of macro imbalances that are raising the financial-stability risks in the country, and leads to a higher country risk premium and higher borrowing costs,” Markov said. “This will be detrimental to foreign investors’ capital inflows.

“Such a model also leads to a structural current-account deficit, which makes the country highly dependent on foreign capital flows. The recent market turmoil was mostly triggered by the elevated and rising inflationary environment, which has led to a record depreciation of the lira, thus hampering foreign investors’ capital flows.”

Economists point out that there is a solution to the current economic turmoil in Turkey.

“We know what the remedy is to this situation: The reversal of the previous rate cuts by the (central bank), in order to start building some inflation credibility by showing their determination and overriding goal to fight inflation, thus containing the lira depreciation.”

Izzet Ozgenc, a Turkish law professor, suggested that the authorities in the country might declare a state of emergency.

“We, as the society, should be ready for the state of emergency that could be declared as a result of a heavy economic crisis,” he wrote in a message posted on Twitter on Monday. He highlighted article 119 of the Turkish Constitution, which empowers the cabinet to declare a state of emergency for up to six months in response to economic crises, natural disasters and infectious diseases.

However the idea of a state of emergency was rejected and criticized by opposition figures.

Sales of houses in Turkey to foreigners soared by 48.4 percent in November as the lira slid. About 7,363 properties were sold to buyers from other countries, the highest monthly total since 2013. They were especially popular among Iranian, Iraqi and Russian buyers, who favored Istanbul, southern Antalya and the capital Ankara as purchase locations.


Saudi youth turn to AI for art and culture

Updated 13 February 2026
Follow

Saudi youth turn to AI for art and culture

  • Creativity, heritage and technology converge in a new generation of artists

RIYADH: As Saudi Arabia’s Vision 2030 places creativity, culture and technological innovation at the core of national development, the impact of these priorities is becoming increasingly visible across a wide range of disciplines and practices.

Through the use of artificial intelligence, young Saudis are integrating technology into their creative work both as a practical tool and as a medium in its own right. In doing so, they are expanding their capabilities, exploring personal and collective identity, and finding new ways to preserve and reinterpret cultural heritage.

“AI gives young Saudis a new way to interact with their own cultural inheritance,” said Dmitry Zaytsev, founder of Dandelion Civilization, a platform designed to help individuals shape unique professional paths.

Dmitry Zaytsev, founder of Dandelion Civilization. (Supplied)

“Traditional design elements such as calligraphy or geometric motifs were once difficult to modify. Experimentation required resources and formal approval. AI removes that barrier and makes exploration immediate. A creator can test many versions of a pattern and see which ones still feel authentic to them,” he told Arab News.

According to Zaytsev, this emerging form of expression does not signal a rejection of tradition, but rather a deeper engagement with it. “The young creator discovers what can change and what must remain constant. AI becomes a sketchbook that allows culture to evolve through curiosity rather than fear. When creators correct a model or push it toward local rhythm, they strengthen rather than dilute cultural identity,” he explained.

Sarah AlBaiz, an art adviser, researcher and artist, uses code to blend visual art with concepts drawn from culture and philosophy. While her early practice focused primarily on painting, her trajectory shifted during the 2020 AI Artathon, a pioneering international event highlighting collaboration between humans and machines in artmaking, where she discovered how to merge her engineering background with her creative work.

DID YOU KNOW?

• Saudi youth are using AI as a creative tool to reinterpret heritage, from calligraphy to folklore.

• AI is helping artists experiment faster without the traditional barriers of resources or formal approval.

• The Kingdom is backing creative AI nationally, with programs like SAMAI aiming to empower 1 million Saudis for an AI-driven future.

Operating within the field of computational creativity, where technology actively participates in the artistic process, AlBaiz explores themes of finance and faith. “Because they’re two sides of who I am,” she said. “When you talk about values, for example, that is both a term used in finance and trade from an objective perspective, but also moral and spiritual value.”

“When you understand prompting in AI, you can get it to produce almost anything. But it’s also informed by the training data it has,” she said.

Sarah Albaiz's "Diriyah II (2020)" melds a traditional Saudi landmark with the avant-garde. This generative artwork rejuvenates the historic Alsalwa Palace in Diriyah. By infusing Munira AlTheeb's artistry through GAN style transfer, the piece stands as a testament to the evolving narrative of Saudi heritage. (Supplied)

Rather than relying on a single platform, AlBaiz experiments with multiple AI models to test their limitations and audience reception. “I work a lot with language as well, so large language models are right up my street when it comes to computational creativity.”ee

Her work has gained international recognition. At the 2022 Islamic Arts Biennale in Jeddah, she co-created an artwork under the banner of Super Artistic AI that generated Al-Qatt Al-Asiri motifs from southern Saudi Arabia. The piece received an Audience Award.

Beyond her artistic practice, AlBaiz is developing an intelligent art advisory system aimed at helping users navigate the Saudi art landscape. Designed as an initial point of contact, the system would guide users through potential pathways before they engage with a human adviser.

Inverting established gender norms, Sarah Albaiz's digital collage reimagines masculinity. Set against a generative backdrop, its core message "real men cry" challenges familial WhatsApp discourses. (Supplied)

“It’s about understanding what role AI plays in the pursuit of what you want,” she said. “When I decided to focus on Qantara and building the advisory, I recognized that many of the systems required would need to be intelligent systems that offload a lot of work from me and the team.”

“When AI is an enabler rather than the end result, it becomes less intimidating because it feels risk-free for the end user,” she added.

Zaytsev echoed this idea, describing AI as a kind of rehearsal space. “Young people practice conversations, explore sensitive topics and organize their thoughts without social risk. This builds emotional clarity and confidence,” he said.

While generative tools such as large language models attract much of the attention, AI’s creative applications extend far beyond text and image generation.

Fairooz Alawami, trained as both an architect and engineer, uses AI to create self-expressive visual works inspired by dance.

Fairooz AlAwami's work. (Supplied)

“My practice is focused on contextualizing movement,” she said. “Because of my architectural training, I work with 3D modeling software called Rhino, which includes a visual coding language. Within that environment, you can also write code in Python, JavaScript or C#.”

Alawami employs OpenPose to analyze videos of her dancing by mapping points across her body. She then applies another computer vision model, MIDAS, which converts images or videos into depth frames. “If OpenPose gives me a skeleton, MIDAS gives me depth,” she explained. The resulting data is fed into 3D modeling software, where it is refined and manipulated into finished artworks.

She began dancing at a young age. “I didn’t find it, it found me,” she said. Movement later became the foundation of her artistic practice, leading to her first major project around three years ago while completing her master’s degree using the Grasshopper plugin. At the time, the workflow was slow and fragmented, but the arrival of ChatGPT helped streamline the process by making it easier to write and learn code.

Fairooz AlAwami's work. (Supplied)

“I think my love for dance and my love for art and design came together in a way that felt uniquely me,” she said. “Once I found that space, I just ran with it. It is my singular voice.”

Her work also draws heavily on cultural and musical heritage. One recent project was inspired by folklore referenced in the iconic song “Al Leila wa Leila” by Umm Kulthum. Alawami extracted musical stems from the track and mapped them to characters within the narrative. “The vocals were Shahrazad, the storyteller, and each stem represented a different narrative element,” she said. Earlier works were influenced by Islamic architecture and the geometric patterns found throughout Saudi Arabia and the wider Arab world.

“There are some incredible artists using generative AI to do very impressive things, and I don’t think I fall into that camp,” she said. “For me, AI is more like a skills-gap tool that helps me reach where I want to go.

“As humans, whether we realize it or not, the act of creating feeds us in some way. Lowering the barrier to entry makes creativity less intimidating.”

Opinion

This section contains relevant reference points, placed in (Opinion field)

Today, Saudi Arabia’s creative sector is supported by expanding national infrastructure. Initiatives such as the Cultural Scholarship Program place Saudi students in more than 60 universities worldwide, spanning disciplines from archaeology and literature to design, filmmaking and culinary arts. In parallel, the Kingdom launched the SAMAI initiative last year, aiming to equip 1 million Saudis with the skills needed to engage confidently in an AI-driven world.

Within Vision 2030, culture, tourism, digitalization and AI are treated as strategic sectors rather than peripheral concerns. As Saudi Arabia develops its creative economy as a form of soft power, its youth are becoming increasingly digitally fluent. AI tools are now embedded within creative workflows, enabling a new generation to explore heritage, remix traditional aesthetics and develop narratives that resonate on a global stage.