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Established in 2006 as a Community of Reality

Welcome to the Neno's Place!

Neno's Place Established in 2006 as a Community of Reality


Neno

I can be reached by phone or text 8am-7pm cst 972-768-9772 or, once joining the board I can be reached by a (PM) Private Message.

Established in 2006 as a Community of Reality

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Established in 2006 as a Community of Reality

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    Developments in Iraq impede the process of re-balancing of the Turkish economy

    Rocky
    Rocky
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    • Post n°1

    Developments in Iraq impede the process of re-balancing of the Turkish economy Empty Developments in Iraq impede the process of re-balancing of the Turkish economy

    Post by Rocky Sun 22 Jun 2014, 10:42 am

    Developments in Iraq impede the process of re-balancing of the Turkish economy 


    06/22/2014 






    BAGHDAD / JD / .. Analysts say the fighting in Iraq may slow the gradual process by which Turkey is seeking to rebalance the economy.
    Rising oil prices could raise inflation and the collapse of a major market for export would impose pressure on Turkey's efforts to reduce the deficit widening in the current account balance.
    According to a report published by Reuters contributed to lower lira and higher interest rates to calm the domestic demand and export subsidies in recent months. This in turn reduced the current account deficit, which represents the major weakness in the Turkish economy and helped to rebalance the economy in the wake of significant growth was the basis on which the credit is to check through.
    But progress snap of insurgents in Iraq threatens to tear apart the second-largest export market for Turkish products and a major supplier of oil to Turkey.
    Oil prices have risen to their highest level in nine months, surpassing $ 115 a barrel on Friday on fears that the heavy fighting to reduce the supply of oil from Iraq.
    Turkey buys 90 percent of the crude oil it needs from abroad contributed to raise the deficit in the current account balance to $ 65 billion in 2013.
    Economists estimate that every rise in oil prices by ten dollars lead to higher inflation in Turkey increased by 0.5 percent and increase the current account deficit by four billion dollars.
    Said Ann Binwah head of emerging markets strategy at Societe Generale in a note to clients last week, "It is clear that Turkey is on the front line geographically as well as from the perspective of the balance of payments."
    "In my opinion, the price of oil has become the main risk index for emerging markets," he said, adding that the bank decided to sell the Turkish lira "to hedge the risk of escalating political."
    The Minister of Finance Mehmet Şimşek this month that he expected to reach the energy import bill of $ 61 billion in 2014, compared with 56 billion dollars last year.
    On Tuesday acknowledged that developments in Iraq may lead to slow down the progress of Turkey's progress in narrowing the current account this year.
    The deficit fell to 16.37 billion dollars in the first four months of this year and has become slightly less than 57 billion dollars in the twelve months to the end of April.
    It also poses the inflationary impact of rising oil prices dilemma for the Turkish Central Bank, which meets on Tuesday to set interest rates.
    And last Monday, said Central Bank Governor Erdem Başçı that the bank may cut interest rates soon, perhaps next week if it is satisfied that the inflation outlook is improving significantly.
    However, economists have questioned whether this is the current situation.
    The annual inflation rate was 9.66 percent in May, while the central bank has forecast the end of the year and 7.6 percent compared with a target level in the medium term, which is five percent.
    The bank said repeatedly that he expects inflation to start to decline from June.
    Said William Jackson, economist at Capital Economics in London, "Recent developments will increase the difficulty of reducing high inflation and reduce the huge deficit in the current account balance."
    "It seems difficult to justify any further reductions in interest rates. Unless the central bank lowers interest rates, the pound may become more vulnerable to a huge wave of selling."
    The lira fell 3.5 percent in the last two weeks and it was the performance of currencies of other emerging markets fared better ones, after investors began to worry developments violence in Iraq.
    Jackson predicted decline in the currency by the end of the year to 2.25 lira against the dollar of about 2.1 pounds now. The Reuters survey expect the currency to weaken slightly to 2.22 Turkish lira against the dollar in 12 months.
    Last month, the central bank cut interest rates for the first time since, despite rising inflation after calls from Prime Minister Tayyip Erdogan calling for such a move in order to maintain growth before the presidential election in August and is expected to run in them.
    The Reuters survey showed the 20 opinions economically they expect the central bank announced a cut by half a percentage point to the repurchase rate for a week during a meeting on Tuesday. / End / / 22 

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