EconSource: Former Finance Minister to Take Charge of Economy in New Turkish Cabinet

Former Turkish Finance Minister Mehmet Simsek will be in charge of the economy as Deputy Prime Minister in a new cabinet in which allies of President Tayyip Erdogan took key posts. “This cabinet has the mission of taking Turkey to a new horizon. This is a heavy responsibility but it has the support of an election victory with an 85 percent participation rate,” Prime Minister Ahmet Davutoglu said Tuesday. A senior Turkish official said that Simsek would take over management of the economy, a post held in the past by Justice and Development Party (AKP) stalwart Ali Babacan. Both men are highly regarded by investors and viewed as counterweights to Erdogan, who has railed against high interest rates and alarmed markets wary of political interference in monetary policy. Media outlets report that the decision to leave Babacan out of the cabinet indicates that “Erdogan [has] put his stamp on the new government.” Former Finance Ministry Undersecretary Naci Agbal and Economist Mustafa Elitas, who are both close to Erdogan, were named Finance and Economy Ministers, respectively. Erdogan’s son-in-law, Berat Albayrak, was appointed Energy and Natural Resources Minister. [Reuters, 11/24/2015]

Libya’s Eastern NOC threatens to stop tankers if rival sells through Glencore
The National Oil Corporation (NOC) set up by Libya’s internationally recognized government in Tobruk has threatened to stop any tanker operating on behalf of trading firm Glencore from loading oil at the nation’s ports if the company does business with the rival NOC in Tripoli. Chairman of the eastern NOC Nagi Elmagrabi said that a letter was sent to Glencore seeking confirmation of an agreement for oil sales with the western NOC. Glencore has not responded. Elmagrabi said if Glencore has signed an agreement with the Tripoli NOC, the eastern government could physically prevent Glencore-chartered tankers from using Libyan ports. Spokesman for the western NOC Mohammad Elharari confirmed that a deal had been made with Glencore to help market oil. Under the arrangement, Glencore will load and source buyers for all the Sarir and Messla crude oil exported through the Hariqa terminal. Elmagrabi claimed in October that the Hariqa port was under full control of the Tobruk government. [Bloomberg, The Guardian, Libya Herald, Libya Monitor (subscription), 11/23/2015]

Egyptian businesses urge end to capital controls to ease forex pressures
Businesses say that Egypt’s hard currency shortage is choking trade and industry, spooking foreign investors, and hurting growth. They are urging the Central Bank of Egypt (CBE) to end restrictions on dollar deposits and move closer to a market exchange rate. In February, outgoing CBE Governor Hisham Ramez imposed restrictions on the amount of dollars companies could deposit in banks to crush a burgeoning black market. Businesspeople say that policy has backfired, making it difficult for companies to open letters of credit to finance imports and worrying potential foreign investors concerned they will be unable to repatriate profits. Incoming CBE Governor Tarek Amer has yet to spell out his plans, but bankers credit him with supplying $1.8 billion in recent weeks to clear a backlog of imports at the country’s ports and with an increase in yields on certificates of deposit in the Egyptian pound. [Reuters, 11/23/2015]

Gulf banks rush to loan market to cope with liquidity squeeze
Gulf banks are rushing to raise money through the loan market by the end of the year as low oil prices squeeze liquidity. At least nine institutions, including from Qatar, the United Arab Emirates, Bahrain, and Kuwait, are said to be speaking to other banks about raising cash. “It’s gone crazy,” said one source who heads loan syndications at a bank in the region. “It’s not surprising with all the pressure on liquidity but I can’t remember a market like this.” Having enjoyed strong growth on the back of cheap liquidity from governments depositing oil revenues in their accounts, Gulf banks now have to cope with government withdrawals of cash to plug soaring budget deficits. The banks are seeking alternative funding routes, such as the loan market, to fill the gap, but the rates at which they are borrowing are higher than the near-free deposits they received previously. The effect will be more expensive loan rates for retail and corporate borrowers in the Gulf region, which are already showing signs of struggling with existing debts. [Reuters, 11/24/2015]

Egypt to control prices of ten commodities as inflation rises
Egypt will control the prices of ten essential commodities as the country works to keep inflation in check amid a shortage of foreign currency. The list includes livestock and frozen meat, poultry, fish, oils, sugar, rice, beans, corn, soybean, and wheat. A statement from the office of Prime Minister Sherif Ismail did not specify what measures would be taken to keep prices under control. The decision follows a speech earlier this month by President Abdel Fattah al-Sisi promising greater state intervention in curbing price rises. The Ministry of Supply recently said Egypt’s grain buyer, the General Authority for Supply Commodities (GASC), would begin importing a broader array of essential goods to push down prices. GASC launched its first international tender for poultry earlier this month, but pressure from the local poultry industry has made it backtrack on plans to continue tendering, according to traders. [Reuters, 11/3/2015]

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