Business

Erdogan says Turkish interest rates will fall ‘markedly’ until elections

Turkey’s interest rates will continue to fall, President Recep Tayyip Erdogan said, making a case for an economy freed from dependence on short-term foreign cash and transformed into one that thrives on local production and exports.

Cheaper money will boost manufacturing, create jobs and slow consumer inflation currently running at four times the official target of 5 percent, and the currency will eventually strengthen, Erdogan said in an interview with state broadcaster TRT on Tuesday.

Turkey won’t try to attract capital flows that leaves its economy at the mercy of “hot money, or investments that can be quickly withdrawn, Erdogan said. His pledges put the Turkish central bank in an awkward position after monetary policy makers said they would assess ending interest rate cuts as early as December.

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Even so, the Turkish lira lost almost 28 percent of its value since the bank started its current easing cycle in September and lowered the benchmark rate down by 4 percentage points to 15 percent.

“Our country has now come to the point of breaking this vicious cycle, and there is no turning back from here, Erdogan said.

The lira extended losses after Erdogan’s remarks, falling as much as 8.1 percent against the US dollar. It was trading 6.4 percent lower at 13.7058 per US dollar as of 11:07 p.m. in Istanbul.

Price shocks

Erdogan unveiled his most recent policy stance a little over a week ago, pushing for lower interest rates to turbo-boost growth and revive his flagging popularity ahead of the 2023 vote.

Pushing for lower borrowing costs is hardly new for the Turkish president, whose proposition that cheaper money slows inflation defies mainstream economics. Driving credit-fueled growth before elections has worked for him in the past.

The accumulating impact of that policy, rising income inequalities and the damage wrought by Covid means the potential social costs are much bigger this time. Price shocks resulting from the lira’s freefall are making life more expensive in the nation of 84 million.

Continuing old policies based on “false premises would only exacerbate those problems, Erdogan said.

“The high interest rate policy imposed on us is not a new phenomenon, he said. “It is a model that destroys domestic production and makes structural inflation permanent by increasing production costs. We are ending this spiral.

The government is working on two support programs aimed at creating 50,000 new jobs to mitigate the short-term volatilities, the Turkish leader said.

Private companies will get 50 billion liras ($3.7 billion) in new loans under one of the programs supported by the Credit Guarantee fund. Interest rates on the loans will be as much as 7 percentage points lower than the market levels, contributing to an estimated growth of 10 percent in Turkey’s gross-domestic product this year, Erdogan said.

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Business

Russian ruble holds steady at 96 against the US dollar ahead of tax payments

The Russian ruble steadied near 96 to the dollar on Tuesday, trading in a narrow band, supported by upcoming tax payments and high oil prices.
At 0710 GMT, the ruble was 0.2 percent stronger against the dollar at 96.10 and had gained 0.3 percent to trade at 101.69 versus the euro. It had firmed 0.1 percent against the yuan to 13.13.
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Month-end tax payments, that usually see exporters convert foreign currency revenues to pay local liabilities, support the ruble, but the currency can slide early in the month once the period has passed.
The ruble has also now lost the temporary support of higher sales of foreign currency than usual by the central bank, which was selling around 21.4 billion rubles of yuan a day until the start of this week.
“At the end of the week, when the tax period ends, there is a high likelihood of the resumption of the national currency’s smooth devaluation,” said Alor Broker’s Alexei Antonov.
Brent crude oil, a global benchmark for Russia’s main export, was down 1.1 percent at $92.23 a barrel.
Russian stock indexes were lower.
The dollar denominated RTS index was down 0.5 percent to 992.5 points.

The ruble based MOEX Russian index was 0.6 percent lower at 3,028.8 points.
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Business

Digital, electric solutions can cut carbon emissions in office buildings by 70 pct

Retrofitting buildings using a digital-first approach is the best pathway to decarbonization, according to new research from Schneider Electric, the leader in the digital transformation of energy management and automation.
Buildings represent an estimated 37 percent of global carbon emissions, and as about half of today’s buildings are still likely to be in use in 2050, the sector must urgently reduce operational carbon emissions, by making buildings more energy efficient.
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The research findings show that deploying Schneider Electric’s digital building and power management solutions in existing office buildings could reduce their operational carbon emissions by up to 42 percent with a payback period of less than three years. If fossil fuel-powered heating technologies are replaced with electric-powered alternatives, and a microgrid with local renewable energy sources is installed, all-electric, all-digital buildings will see an additional 28 percent reduction in operational carbon emissions resulting in a total reduction of up to 70 percent.

Mike Kazmierczak, Vice President of the Digital Energy Decarbonization Office, the team leading the science-based research and product innovation to accelerate the energy transition within Schneider Electric’s Digital Energy division, explained that, “Tackling operational emissions is the number-one lever to decarbonize existing buildings at scale and achieve net-zero emissions targets by 2050. This breakthrough research reveals that reducing carbon emissions by up to 70 percent is feasible if we transform our existing building stock into energy-efficient, fully-electrified, and digitized assets.”
The research, carried out with the global design firm WSP, is based on modeling the energy performance and carbon emissions of a large office building built in the early 2000s across various US Climate Zones. This digital approach to building renovations is, however, applicable to all building types and climates, and is, therefore, the most effective building decarbonization strategy, yielding fast results with lower ‘upfront carbon.’
Renovating through the deployment of digital technologies is not only less disruptive to daily operations, but also more effective from a lifecycle carbon perspective. Failing to rapidly decarbonize buildings could also result in stranded assets that lose value and are unattractive to both investors and tenants.
Furthermore, recent research from the Boston University Institute for Global Sustainability and the Schneider Electric Sustainability Research Institute estimates that there is a sizable potential to create new jobs through the transition to low-carbon buildings.

Schneider Electric’s first Sustainability School opens for enrolment

Business

UK’s cost of living crisis to significantly increase early death: Study

The UK’s inflation-fueled cost-of-living crisis is set to “cut lives short” and “significantly widen the wealth-health gap”, according to a study published by open access journal BMJ Public Health on Monday.

Modelling conducted for the study predicted that the proportion of people “dying before their time” (under the age of 75) will rise by nearly 6.5 percent due to the sustained period of high prices.

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The most deprived households will experience four times the number of extra deaths than the wealthiest households, it forecast, with the poorest having to spend a larger proportion of their income on energy, the cost of which has soared.

The researchers studied the impact of inflation on death rates in Scotland in 2022-3, with and without mitigating measures such as government support to help cut household bills.

The collected data was then used to model various potential future outcomes on life expectancy and inequalities for the UK as a whole if different mitigating policies were implemented.

Without any mitigation, the model found that inflation could increase deaths by five percent in the least deprived areas and by 23 percent in the most deprived — coming down to two percent and eight percent with mitigation, with an overall rate of around 6.5 percent.

Overall life expectancy would also fall in each case, it added.

“Our analysis contributes to evidence that the economy matters for population health,” said the researchers.

“The mortality impacts of inflation and real-terms income reduction are likely to be large and negative, with marked inequalities in how these are experienced.

“Implemented public policy responses are not sufficient to protect health and prevent widening inequalities,” they added.

UK inflation unexpectedly slowed in August to 6.7 percent from a high of 11.1 percent, but remains the highest in the G7, fueled by coronavirus lockdowns, Brexit and the war in Ukraine.

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