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Major Turkish business group calls for an end to Erdogan’s low-rates policy

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Turkey’s largest business group, TUSIAD, on Saturday urged President Tayyip Erdogan’s government to abandon a controversial monetary policy based on low rates that has prompted a crash in the lira, calling for a return to “rules of economic science.”
The lira hit a record low beyond 17 against the dollar on Friday, gripped by fears of an inflationary spiral brought on by Erdogan’s new policy in the face of soaring prices.

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At the low, the currency had lost some 55 percent of its value this year, including 37 percent in the last 30 days.
In a statement, TUSIAD said it had warned the government of the negative impacts of the low-rates policy, adding economic woes were harming businesses and citizens.
“As a result of the instability we have been experiencing in recent times, it has become clear that goals under this economic program that is being attempted will not be achieved,” it said.
“Following steps that were taken within the framework of new economic preferences, an environment of distrust and instability has been created,” TUSIAD said, adding the economic model risked causing “much bigger” problems in the future.
“Even exports, expected to benefit the most from this, have been harmed under this environment.”
Under pressure from Erdogan, the central bank has slashed rates by 500 basis points since September. Erdogan has said the new model will boost exports, employment, and investments, though economists have called his experiment “reckless” as it has sent the lira crashing.
Opposition parties have called for immediate elections and blamed Erdogan for single-handedly causing one of the country’s biggest currency crises. Kemal Kilicdaroglu, leader of the main opposition Republican People’s Party (CHP) repeated that call on Saturday after the lira plunged 8 percent on Friday.
“The dollar is out of control,” Kilicdaroglu said. “If those leading the nation truly love the country, if they respect the people… they will bring the ballot boxes in front of the people immediately,” he said.
Meral Aksener, chairwoman of the opposition Iyi Party, said on Friday that Erdogan had to resign.
“You have no fear of God, we understand, but at least have shame in front of people,” she said on Twitter. “You turned the youth’s hopes into debris… Pull it together! Leave already!”
Erdogan announced a 50 percent hike in the minimum wage, to 4,250 lira ($275) per month next year. That is expected to boost overall consumer price inflation by 3.5 to 10 percentage points, while economists expect inflation to soar beyond 30 percent next year.
Both presidential and general elections are currently due in June 2023.

Read more: Erdogan asks Turks to trust new economic model as lira weakens

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IATA chief voices concerns over Airbus-Qatar jet order row

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The head of the International Air Transport Association (IATA) waded into a high-profile dispute between Airbus and Qatar Airways on Tuesday, saying the plane maker’s decision to cancel a jetliner contract was a new and “worrying” development.

IATA Director General Willie Walsh, who ran airlines group IAG before taking the helm of the industry’s trade body, said he and other airline industry chiefs hoped to understand what lay behind the dispute and told reporters it was important for relations between airlines and suppliers to return to normal.

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Last Friday, Airbus cancelled an order of 50 A321neo aircraft from Qatar Airways in an escalating dispute over Doha grounding the plane maker’s bigger A350.

“We confirm that we have terminated the contract for 50 A321s with Qatar Airways, in accordance with our rights,” an Airbus spokesman told AFP following a Bloomberg report on the decision.

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Saudi Arabia and Iraq to sign MoU on linking power grids

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Saudi Arabia and Iraq are going to sign a memorandum of understanding to link the power grids of the two countries, the Saudi energy ministry announced on Twitter on Tuesday.

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Kuwait approves Credit Bank capital hike by $933 mln to $10.9 bln

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The Government of Kuwait has agreed with a parliamentary committee on increasing the capital of Kuwait Credit Bank by 300 million dinars ($993.31 million) to 3.3 billion dinars ($10.9 billion), the finance minister, Abdulwahab Mohammed al-Rushaid, said on Tuesday.

The government has also given the go-ahead to reschedule 500 million dinars ($1.65 billion) in bonds owed by the bank to the Kuwait Fund for Development, the minister said.

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The parliamentary proposal had aimed to increase the capital of the Credit Bank by 750 million dinars in order to finance housing units for Kuwaiti citizens.

The state-run Kuwait Credit Bank currently provides interest-free loans to eligible citizens to build, buy or renovate housing but it has been suffering from a lack of liquidity due to the increase of housing requests.

Spending is to fall 4.8 percent to 21.9 billion dinars, with capital expenditure accounting for 13.2 percent of that sum, according to a Bloomberg report.

Kuwait will also not transfer 10 percent of the total revenue to the Future Generations Fund, or sovereign wealth fund, under a 2020 law barring such transfers in deficit years, reported Bloomberg.

However, according to a Reuters poll, of 25 economists “all six economies in the Gulf Cooperation Council would grow faster this year than was expected three months ago.”

Saudi Arabia was predicted to top the list with growth of 5.7 percent, followed by Kuwait and the UAE with 5.3 percent and 4.8 percent respectively, according to the same Reuters report.

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