EconSource: Turkish Lira Hits Another Record Low on Political Uncertainty

Turkey’s lira has hit a record low and lost 3 percent since talks between the ruling AK Party and the main opposition CHP failed, setting the stage for a snap election and more investor uncertainty. Turkey’s central bank will meet tomorrow to decide on interest rates. Markets are waiting to see if Central Bank Governor Erdem Basci will start a gradual shift to a single interest rate policy or continue with the current unorthodox mix of multiple rates. While analysts say the central bank needs to increase interest rates to shore up the currency, Economy Minister Nihat Zeybekci said on Monday that rates need to fall, reviving government attempts to influence the central bank. “Looking at Turkey’s total debt structure, I don’t think current exchange rates are a cause for concern. We shouldn’t intervene in the market, it will find its own balance,” he said. [Reuters, Bloomberg, 8/17/2015]

Eastern Libyan government appoints new chairman for its state oil firm
Libya’s internationally recognized government in Tobruk has appointed Naji al-Maghrabi as Chairman of the National Oil Corporation (NOC) in the east. The move is largely symbolic as oil production is controlled by the NOC in Tripoli in the west. While the Tobruk government has appointed a head for the NOC in a separate headquarters in the east, oil customers prefer to pay through existing channels via the NOC in Tripoli. Maghrabi, who is currently in Egypt, confirmed that customers are still dealing with the Tripoli but said an conference would be held to urge the international community to go through the NOC in the east. He added that Libya’s oil production is between 350,000 and 380,000 barrels per day (bpd). [Reuters, 8/16/2015]

Saudi money market turmoil shows bank jitters over bond issues
Turmoil in the Saudi Arabian money markets suggests that financing the government’s budget deficit may not be a smooth process as banks worry about the risk of a liquidity squeeze. The government sold 20 billion riyals ($5.3 billion) of bonds to banks last week to help to cover a deficit caused by low oil prices. Saudi banks easily absorbed last week’s issue, but money market moves show concern about their ability to absorb the multi-year series of issues that may become necessary if oil prices remain low. Authorities have not released a bond issuance calendar or detailed figures for the government’s borrowing requirement, which has left banks in the dark about how many more bonds they might be asked to buy in coming months and years. [Reuters, 8/16/2015]

Egyptian unemployment eases to 12.7 percent in second quarter of 2015
Egypt’s unemployment rate edged down to 12.7 percent in the second quarter of 2015, from 12.8 percent in the first quarter and 13.3 percent from the same period last year. Egypt’s labor force added 66,000 new jobs during the second quarter of the year, the statistics agency CAPMAS said in a statement, citing an “improvement in some economic activities.” However, unemployment for those between the ages of 15 and 29 was 26 percent in the second quarter and 44.6 percent for those holding a university or higher degree. [Reuters, 8/17/2015]

Bahrain to remove meat subsidies as cheap oil hits budget
Bahrain will remove government subsidies on meat starting on September 1, state news agency BNA reported as the government seeks to save money due to pressure from low oil prices. Subsidies in Gulf oil exporting states have become increasingly difficult for governments to afford as oil prices have plunged, slashing export revenues. Bahrain, with much smaller oil and financial reserves than its Gulf neighbors, has been hit particularly hard. The removal of meat subsidies could eventually be followed by similar moves on other goods and services. However, Bahraini citizens will be compensated for the higher meat prices, BNA quoted Industry and Commerce Minister Zayed bin Rashed al-Zayani as saying. [Reuters, 8/16/2015]

Also of interest
Saudi stocks drop in broad sell-off triggered by oil | Reuters
Oil’s fresh drop may further depress Gulf market | Reuters
Fire shuts down Kuwait’s Shuaiba refinery | Reuters
UAE open to meeting Indian oil demand | Reuters
Oman oil production climbs above 1 million bpd in July | Reuters
Bahrain cracks down on illegal foreign labor | Zawya
Egypt stocks top mideast slump on Brotherhood probe, oil drop | Bloomberg
Jordan to sell Egypt 200 million cubic feet of gas per day | Al Mal (Arabic)
Iraq’s Basra crude August exports seen at 2.93 million bpd | Reuters
Libya oil guard seeks arms to fight Islamists near ports | Bloomberg
Algerian allows dinar to depreciate against dollar to curb imports | Reuters