Business

Turkey’s Erdogan stays firm on interest rates, lira weakens four percent

Turkish President Tayyip Erdogan said he will never defend interest rate hikes nor compromise on the issue, NTV and other broadcasters reported on Monday, in his latest defense of recent monetary easing that has triggered a crash in the lira currency.

The lira weakened as far as 12.85 against the dollar in early trade and dipped again to 12.77 by 1150 GMT after Erdogan’s latest comments, 4.1 percent weaker on the day.

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“Tayyip Erdogan has talked from the beginning about low interest rates and says ‘this interest rate will come down’,” the president was quoted as telling reporters on his flight back from a visit to Turkmenistan.

“I have never defended raising interest rates, I don’t now and will not defend it … I will never compromise on this issue.”

Under pressure from Erdogan, the central bank has slashed rates by 400 basis points since September to 15 percent and is widely expected to ease again in December. Economists have strongly criticized the policy, pointing to inflation of around 20 percent.

Erdogan said recent exchange rate volatility was not based on economic fundamentals and that Ankara was ready to provide necessary support to boost investments, via state banks.

NTV also reported him as saying he had not changed his unorthodox view that interest rates cause inflation.

“You will see, God willing, how far inflation falls before the election,” he added. “The interest rate lobbies are seething.”

The lira has tumbled as much as 45 percent against the dollar this year – hitting a record low of 13.45 last Tuesday – with much of those losses suffered after Erdogan stepped up his defense of monetary policy.

The selloff this month is the lira’s fifth worst ever, according to Goldman Sachs research.

Currency manipulation?

At the weekend, it emerged that Erdogan had ordered a probe into possible currency manipulation.

State-owned Anadolu news agency said Erdogan tasked the State Supervisory Council, an auditing agency which reports to the presidency, to identify institutions that bought large amounts of foreign currency and to determine whether any manipulation had occurred.

Market attention was set to focus this week on gross domestic product data and November inflation figures on Friday.

A Reuters poll forecast annual inflation will hit a three-year high of 20.7 percent in November, while economists forecast the lira slide will send inflation toward 30 percent next year.

The lira’s spiral has upended household spending plans, disrupted the supply of some medications and briefly halted the sales of some other imports like cellular phones.

Many economists and opposition lawmakers have called for an immediate policy reversal and elections, while the government is standing by Erdogan’s push for monetary stimulus despite the risks.

In one outcome of the lira weakness, the CEO of Spain’s BBVA said on Monday the weaker currency had reduced the price of its deal to buy 50.15 percent of lender Garanti by more than 400 million euros at current exchange rates.

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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.
Read more:

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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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