Erdogan’s moves offer little reward | Opinion

Turkey has resisted the temptation to cut borrowing costs, for now. The new head of the central bank, Sahap Kavcioglu, on Thursday kept the main rate at 19%, while hinting at a possible relaxation.

Tayyip Erdogan’s apparent goal of easing monetary policy falters. In March, he abruptly replaced the governor, Naci Agbal, who had raised rates that month by 200 basis points, the third dismissal from the post in two years. Kavcioglu seemed more inclined to please him, having argued that high rates can cause, rather than slow down, inflation.

So far, you have avoided any rough action. But you are setting the stage for relaxation. He spoke of keeping rates above inflation. Since the annual exceeded 16% in March, you can raise them up to 300 points. Meanwhile, the promise of March to maintain a tight monetary policy “for an extended period” disappeared.

But Turkey is worse than before. The lira has lost more than a tenth of its value against the dollar since the appointment. And, having spent more than $ 100 billion in 2020 to shore it up, the bank only has $ 10 billion in net foreign exchange reserves, the lowest level since 2003, giving it little ability to fight a sell-off. Also, the Turks are avoiding it in warehouses.

That means inflation can continue to rise. The growing current account deficit, of 2.6 billion dollars in February, is another cause for concern, especially since the restrictions mean that tourism will suffer again this year, which will hurt exports. Kavcioglu is unlikely to be able to slash rates without risking rising inflation, or even a currency crisis.

Your biggest problem is a lack of credibility. Société Générale estimates that another $ 5.9 billion of capital will leave Turkish assets in the short term. The central bank’s twists and turns make a rate cut even more risky.

The authors are columnists for Reuters Breakingviews. Opinions are yours. The translation, of Carlos Gomez Down, it is the responsibility of Five days


Weather: scant rains are expected for the next few days in the entire agricultural region of the country

Producers continue to plant soybeans after the weekend rains, in which almost 5 million hectares of the 17.2 million projected for the 2020/21 season have been incorporated. According to data from the Buenos Aires Cereal Exchange, the greatest interweekly advances were reported in the South of Córdoba, the North of La Pampa-West of Buenos Aires, the South Nucleus and San Luis, after an improvement in surface humidity during the last week.

In addition, to date, 31.4% of the 6.3 million hectares estimated for the current campaign have already been sown in corn, while for the cultivation of sunflower, of the 1.4 million hectares estimated for the current campaign. 94% of the area has been implanted.

In this productive context, the Buenos Aires entity launched a new Agroclimatic Outlook Report on what will happen to the climate in the next 15 days.

For the first week, from 19 to 25 of this month, minimum temperatures will continue to be observed below normal, caused by the entry of southeast winds during the preceding days.

The winds from the tropics will return rapidly, beginning a long period of warmth, with temperatures above normal in most of the agricultural area. The persistent tropical circulation will impede the passage of storm fronts, making lhe rainfall remains scarce in most of the agricultural area, except for its central portion, which will observe some foci with moderate to abundant records, caused by the entry of winds from the southeast.

At the beginning of the second stage of the outlook, from November 26 to December 2, the entry of tropical winds will continue, although with somewhat less intensity than in the first stage, so that maximum temperatures will moderate somewhat.

Parallel, the passage of the storm front will take place, producing abundant rainfall, with wide foci of storms in the north and the center of the agricultural area, while the south will receive moderate to little contributions.

Along with the front, the polar winds will advance, causing a marked late thermal decline in the south and the center of the agricultural area, while the north will remain under the influence of tropical circulation.