Turkey

A company accused by German authorities of supplying authoritarian countries such as Turkey, Egypt and Myanmar with trojan software that could be used to eavesdrop on dissidents has shut down operations and filed for insolvency, the Bloomberg reported. FinFisher GmbH sold spyware to law enforcement and intelligence agencies that allows users to access address books, chat messages, photographs and videos on targeted smartphones as well as listen in on telephone conversations.

After losing two years to the COVID-19 pandemic, shopkeepers in the heart of the Turkish Riviera had hoped for a strong tourism season this year to help keep their businesses afloat. But Russia’s war in Ukraine is fast dampening their spirits, the Associated Press reported. “We’re trying to earn our bread through tourism, but it looks like the war has finished off this (tourism) season, too,” Devrim Akcay said outside his clothing shop in the resort town of Belek, along the Mediterranean coast’s Antalya province.

Textile and leather goods' makers in Istanbul's garment district are feeling the impact of Russia's invasion of Ukraine as customers in Moscow and Kyiv have canceled $200 million in orders in the past week, industry officials say, Reuters reported. The loss of trade adds to strains on Turkey's economy, with officials estimating that more than $1 billion is directly at risk to the textile industry alone if the conflict in Ukraine continues.

Turkey’s central bank left its key interest rate unchanged for a second consecutive month, pausing the government’s policy of interest-rate cuts that triggered a chaotic slide in the value of the lira last year, the Wall Street Journal reported. The bank’s monetary policy committee said Thursday it left the benchmark interest rate on hold at 14%, in line with market expectations. In a statement, the bank cited “increasing geopolitical risks” in a possible reference to the crisis over nearby Ukraine.

A possible Russian invasion of Ukraine is threatening to deepen a continuing economic crisis in nearby Turkey, which faces the prospect of soaring energy prices and disrupted trade with its two Black Sea neighbors in the event of war, the Wall Street Journal reported. Turkey’s economy has already been shaken by inflation that is among the highest in the world, after a series of unorthodox economic steps and a collapse of the currency’s value over the past year. Turkey is dependent on imported Russian oil and natural gas, as well as tourists from both countries.

Turkey will announce a new scheme on the weekend to encourage households to convert their gold holdings into liras, finance minister Nureddin Nebati told investors in London on Tuesday, Reuters reported. Two investors who attended meetings with Nebati in London said the minister had told them about the plans to ensure part of the $250-$350 billion worth of gold held by Turkish households would find its way into the domestic saving system. "They will make announcements this weekend on how to convince people to let go of their gold holdings – it is a huge amount in Turkey," said on investor.

Turkey is preparing to return to global bond markets for the first time since the lira’s implosion, Bloomberg News reported. The nation has picked banks including HSBC Holdings Plc to manage a sale of Islamic debt, known as a sukuk, which could happen this month. The sale may be used to refinance about $2 billion of debt maturing this month. The last time Turkey turned to foreign investors with a bond sale was in September, before President Recep Tayyip Erdogan’s insistence on cutting interest rates despite high inflation sent the currency into a tailspin.

A real rate of minus 35% and little prospect of a rate hike by the Turkish central bank can only mean more losses for the beleaguered lira, Bloomberg News reported. Traders see a probability of almost 50% that the lira will surpass its record low of 18.3633 per dollar by the end of the year, according to Bloomberg calculations based on prices of put and call options. The currency slumped as much as 1.2% Thursday before paring its drop to trade at 13.5772 as of 2:08 p.m. in Istanbul.

Turkey President Recep Tayyip Erdogan promised the country would continuing cutting interest rates, suggesting that lower inflation will follow, Bloomberg News reported. “We will lower interest rates as we have done already,” said Erdogan, after the Turkish central bank halted a rate-cut cycle this month that trimmed 500 basis points from the benchmark rate since September. The aggressive easing cycle was accompanied by runaway inflation, which has caused an outcry among Turks who’ve witnessed a deep erosion of their purchasing power in a few months.

Turkish Finance Minister Nureddin Nebati told economists he expects the inflation rate to peak at about 40% in the months ahead and not to surpass 50% this year, Bloomberg News reported. Nebati provided his most detailed outlook yet for consumer prices in 2022 during a meeting with 60 economists and analysts on Saturday in Istanbul. The minister said the inflation rate may not fall below 30% until the end of the year. Turkey’s inflation rate hit 36.1% in December, the highest since the beginning of President Recep Tayyip Erdogan’s 19-year rule.