Economy

Turkey curbs credit card use for foreign travel, in blow to sector

Published

1 year ago

August 2, 2023

Turkey curbs credit card use for foreign travel, in blow to sector

By Ceyda Caglayan

ISTANBUL (Reuters) – Turkey’s banking watchdog has stopped allowing credit card payments by instalment for foreign travel, such as flights, travel agency fees and accommodation, in a step seen dealing a blow to foreign travel operators.

The move, which hit airline shares and was seen as curbing foreign currency outflows, was one of two measures announced by the BDDK watchdog late on Monday, which it said were among coordinated steps to strengthen financial stability.

Tourism operators say they have been hit in recent years by a cost-of-living crisis and weakness in the lira, which has lost half its value against the dollar since end-2021, with travellers commonly using credit cards to finance trips.

“Almost all of my clients were paying by instalments,” said Cem Polatoglu, spokesman of a tour operators’ platform, noting an average trip for two cost around 50,000 lira ($1,850). “The number of people who can pay this amount in one go is very few.”

“The logic (of the step) is ‘citizens shouldn’t go abroad and spend foreign currency’,” he said, adding that the foreign travel sector was also being hit by increasing difficulties faced by Turks in securing tourist visas.

Polatoglu forecast a sharp fall in the numbers going abroad after a surge in spending by Turkish citizens abroad in the first half of the year to $3.17 billion – an 84% increase from the same period in 2022 – with such spending facilitated by credit card outlays.

The credit card move also had an impact on airline share prices, with Turkish Airlines dipping 1.3% and the airline Pegasus dropping 2.3%. Istanbul’s main BIST-100 index was 0.4% lower.

The BDDK also said in a statement late on Monday that it had decided to increase the risk weightings taken into account in calculating capital adequacy standard ratios for consumer loans, personal credit cards and vehicle loans.

Turkish authorities have recently taken steps aimed at reining in chronic high inflation and reducing domestic demand, with the central bank hiking interest rates by 900 basis points in two months alongside other tightening measures.

($1 = 26.9618 liras)

Economy

Russian central bank says it needs months to make sure CPI falling before rate cuts -RBC

Published

12 months ago

December 26, 2023

Russian central bank says it needs months to make sure CPI falling before rate cuts -RBC

MOSCOW (Reuters) – Russia’s central bank will need two to three months to make sure that inflation is steadily declining before taking any decision on interest rate cuts, the bank’s governor Elvira Nabiullina told RBC media on Sunday.

The central bank raised its key interest rate by 100 basis points to 16% earlier in December, hiking for the fifth consecutive meeting in response to stubborn inflation, and suggested that its tightening cycle was nearly over.

Nabiullina said it was not yet clear when exactly the regulator would start cutting rates, however.

“We really need to make sure that inflation is steadily decreasing, that these are not one-off factors that can affect the rate of price growth in a particular month,” she said.

Nabiullina said the bank was taking into account a wide range of indicators but primarily those that “characterize the stability of inflation”.

“This will take two or three months or more – it depends on how much the wide range of indicators that characterize sustainable inflation declines,” she said.

The bank will next convene to set its benchmark rate on Feb. 16.

The governor also said the bank should have started monetary policy tightening earlier than in July, when it embarked on the rate-hiking cycle.

Economy

China identifies second set of projects in $140 billion spending plan

Published

12 months ago

December 25, 2023

China identifies second set of projects in $140 billion spending plan

© Reuters. FILE PHOTO: Workers walk past an under-construction area with completed office towers in the background, in Shenzhen’s Qianhai new district, Guangdong province, China August 25, 2023. REUTERS/David Kirton/File Photo

SHANGHAI (Reuters) – China’s top planning body said on Saturday it had identified a second batch of public investment projects, including flood control and disaster relief programmes, under a bond issuance and investment plan announced in October to boost the economy.

With the latest tranche, China has now earmarked more than 800 billion yuan of its 1 trillion yuan ($140 billion) in additional government bond issuance in the fourth quarter, as it focuses on fiscal steps to shore up the flagging economy.

The National Development and Reform Commission (NDRC) said in a statement on Saturday it had identified 9,600 projects with planned investment of more than 560 billion yuan.

China’s economy, the world’s second largest, is struggling to regain its footing post-COVID-19 as policymakers grapple with tepid consumer demand, weak exports, falling foreign investment and a deepening real estate crisis.

The 1 trillion yuan in additional bond issuance will widen China’s 2023 budget deficit ratio to around 3.8 percent from 3 percent, the state-run Xinhua news agency has said.

“Construction of the projects will improve China’s flood control system, emergency response mechanism and disaster relief capabilities, and better protect people’s lives and property, so it is very significant,” the NDRC said.

The agency said it will coordinate with other government bodies to make sure that funds are allocated speedily for investment and that high standards of quality are maintained in project construction.

($1 = 7.1315 renminbi)

Economy

Russian central bank says it needs months to make sure CPI falling before rate cuts -RBC

Published

12 months ago

December 25, 2023

Nabiullina said it was not yet clear when exactly the regulator would start cutting rates, however.

“We really need to make sure that inflation is steadily decreasing, that these are not one-off factors that can affect the rate of price growth in a particular month,” she said.

Nabiullina said the bank was taking into account a wide range of indicators but primarily those that “characterize the stability of inflation”.

“This will take two or three months or more – it depends on how much the wide range of indicators that characterize sustainable inflation declines,” she said.

The bank will next convene to set its benchmark rate on Feb. 16.

The governor also said the bank should have started monetary policy tightening earlier than in July, when it embarked on the rate-hiking cycle.