Economy
EBRD urges Türkiye to stay course on inflation, eyes power project
The chief of the European Bank for Reconstruction and Development (EBRD) said on Thursday that Türkiye must “stay on course” in its inflation fight, and she applauded measures taken by the central bank this week to tackle market fallout from the war in the Middle East.
Odile Renaud-Basso, the EBRD’s president, said the bank’s investment in Türkiye will remain “very high” this year, and that it was looking into potentially funding a big-ticket high-voltage electricity transmission system that Ankara plans over the coming decade.
“The central bank has already taken some measures very quickly,” Renaud-Basso said. “There is still some way to go and what is important is to stay on course and really finish this work,” she told an interview with Reuters at the EBRD’s offices in Istanbul.
Reassuring meetings with officials
Renaud-Basso was speaking at the end of a four-day visit that included meetings with Treasury and Finance Minister Mehmet Şimşek and Vice President Cevdet Yılmaz.
“Everything I heard reassured me (that) this progress is steady,” she said of inflation-fighting measures.
The Central Bank of the Republic of Türkiye (CBRT) has slashed interest rates by 900 basis points since mid-2025 to 37% as annual inflation slowed from over 40% at the beginning of last year to just over 30% in January.
But a rise to 31.5% last month signaled a slowdown in disinflation, and an escalating U.S.-Israeli war with Iran threatens to drive prices higher.
In response, the central bank already took a series of steps this week, including some $8 billion in foreign currency sales on Monday, pushing the market overnight rate to about 40%.
Asked about Ankara’s plans to invest some $30 billion in a high-voltage electricity transmission system over the next decade, Renaud-Basso said the EBRD is “looking into that.”
“It’s part of the discussion we have with the government,” she said.
The EBRD committed last year a record 2.7 billion euros ($3.13 billion) to 54 projects in Türkiye, which is the number-one recipient of EBRD’s funds. This year’s funding could also include energy and renewables projects.
Türkiye aims to quadruple renewable energy generation capacity by the end of 2035 and build new nuclear power plants. The planned network would transfer electricity to consumption centers and also send surplus electricity to its European neighbors.
Türkiye has said it is in talks with the World Bank to secure up to $6 billion of funding for upgrading electricity transmission infrastructure.
Iran conflict risk to economic growth
Renaud-Basso said the widening U.S.-Israel war on Iran is a risk to economic growth, but noted that the fallout depends on how long the conflict lasts.
She said the conflict “can reduce risk capital” for the region – but that apart from Lebanon, the fallout thus far was contained.
“For the time being, it’s limited,” she said, adding that “the risk is on the downside.”
Last week, the EBRD pegged growth for the 41 countries it covers at 3.6% for this year and 3.7% in 2027, boosted by spending on big infrastructure projects in Europe, but offset by U.S. tariffs and trade uncertainty.
The war has effectively closed the Strait of Hormuz, a key shipping artery, sending crude prices up some 12% – and sounding an alarm for many of the energy-importing countries in which the EBRD works.
Renaud-Basso said that the length of the closure of the Strait of Hormuz and the duration of oil and gas price spikes were key, but that high global gas stocks could help cushion the blow.
The exception, however, is Lebanon, which she said is “very much at the core” of current turbulence.
“There we can expect quite a significant impact on the economic situation and broadly,” she said.
In Ukraine, Renaud-Basso said international funding for the year is unlikely to change despite the new conflict.
But more broadly, she said an extended spike in global energy prices could also drive inflation higher – making it tricky for central banks to cut interest rates.
“This is a new challenge in terms of monetary policy. I think that we need to be careful,” Renaud-Basso said.
African countries moved to launch their own credit rating agency on Wednesday, aimed at countering what many see as unfair assessments by top global institutions that make it more expensive to borrow money.
The Africa Credit Ratings Agency (AfCRA), backed by the African Union after nearly a decade of talks, will judge the creditworthiness of countries, businesses and institutions.
The Indian Ocean island of Mauritius was chosen as the agency’s home, partly due to its established financial services industry.
It aims to offer an alternative viewpoint to the “big three” global credit ratings – Fitch, Moody’s and S&P – which have been accused in the past of unfairly playing down African economies.
The African Peer Review Mechanism, the institution behind AfCRA, says 23 countries on the continent are not rated at all by the traditional agencies.
They can also overlook Africa’s huge informal sectors, which do not easily show up in official data, analysts say.
“Africa is not asking for favorable ratings,” Nigeria’s President Bola Tinubu wrote on X last month, welcoming AfCRA.
“We are asking for fair ratings, grounded in our fundamentals and in the reforms our economies are actually carrying out.”
Real-world effects
Low credit ratings have real-world effects as investors charge more interest to lend money.
On average, it costs Africa $9 for every $100 borrowed in international markets in 2024, compared to about $4.70 for emerging markets in Asia and $6.50 in Latin America, according to estimates by the Organisation for Economic Co-operation and Development (OECD), a club of mostly rich nations.
AfCRA is not just a response to “Africa’s unhappiness with the incumbent players,” Hannah Wanjie Ryder, chief executive of consultancy Development Reimagined, told a recent seminar organised by the Chatham House think tank.
“The theory of change is they would actually be able to look with clearer eyes,” she said.
First test
It remains to be seen whether AfCRA would be able to persuade investors that its ratings can be trusted over those of the leading agencies.
AfCRA’s founders say there will be no government interference.
Analysts say the first test is whether the agency will downgrade an African government. If not, investors risk seeing it as the continent marking its own homework.
“African borrowers have long paid a high-risk premium and standard models can miss the informal economy, domestic savings and reforms,” said Jacob Oreki, a management consultant at Kenya’s Strathmore University Foundation.
“But a rating agency is judged on independence and accuracy, not where it sits. If it will not downgrade an African sovereign, markets will treat it as advocacy,” he told Agence France-Presse (AFP).
Investors will base their decisions on the rating, he added, if “it is credible, not because it is African.”
Uber Technologies announced Tuesday it would acquire U.S. catering platform ezCater in an all-cash deal for $2.3 billion, marking a venture into a new area – in its latest move to strengthen delivery, the company’s fastest-growing business segment.
The deal comes months after Uber agreed in July to buy German firm Delivery Hero in a $14.8 billion transaction aimed at creating the largest food delivery group outside China.
Founded in 2007, ezCater lets companies order food from caterers for corporate events, meetings and workplace meals. It generated more than $2.5 billion in gross bookings over the past 12 months, Uber said.
The deal would combine ezCater’s catering business with Uber Eats’ restaurant network and Uber for Business’ corporate customer base, the company said.
Uber Eats has a wider global reach, but DoorDash holds the majority of the U.S. food delivery market, according to analysts, and the ezCater deal is expected to help Uber narrow that gap.
Uber said ezCater’s average order value exceeds $400 and the deal is expected to boost margins.
The acquisition adds a new line of business built on high-value group orders paid for by companies, expanding Uber’s business-focused segment, whose gross bookings grew more than 40% in the second quarter, Rosenblatt analyst Scott Devitt said.
“Importantly, bringing workplace buyers into the ecosystem supports the membership flywheel,” Devitt said.
The ride-hailing and delivery company’s shares have fallen 15% this year as investors weigh how well it can compete once robotaxis begin to reshape the ride-hailing market.
Uber’s delivery segment accounted for about 37% of total revenue in the second quarter and has been its biggest growth driver in the recent past.
The deal is subject to regulatory approval and is expected to close in the coming months.
Money leaving the investment funds now being liquidated in Türkiye has largely moved into bank deposits, the country’s central bank chief said Tuesday, adding that the risk of the turmoil spreading to the wider financial system remained limited so far.
Regulators last month ordered the liquidation of over 130 investment funds managed by seven asset managers following warnings by some that they could not meet redemption payments.
Authorities have widened their investigation into suspected market manipulation in stocks and fund markets. Eighty-five suspects have been arrested so far in the probe, Justice Minister Akın Gürlek said Tuesday.
The funds ordered to be wound down had reached more than $20 billion in assets over just three years. About half a million investors have been affected.
There have been sharp outflows from funds undergoing liquidation, and part of it came from foreign-resident investors, Central Bank of the Republic of Türkiye (CBRT) Governor Fatih Karahan said Tuesday.
He was answering lawmakers’ questions at Parliament’s Planning and Budget Commission.
For domestic residents, Karahan said, where the money goes matters for dollarization.
“We see that a significant portion of this amount has moved into deposits,” he said. He added that total commercial and savings deposits rose by more than TL 800 billion ($16.27 billion) over the same period.
Karahan said there had also been outflows from foreign-currency funds, and that some of that money could be expected to flow into foreign-currency deposit accounts. Even so, he said, overall deposit preferences were in line with the current Turkish lira share.
He put the lira share of investment funds at about 61% to 61.4%, and said it was holding steady.
Connection to wider system ‘weak’
Karahan said the link between the funds in liquidation and the rest of the financial system was critical for assessing contagion risk, and that current data pointed to a weak connection.
“We can say that the shift toward the Turkish lira in the financial system is continuing in some form, at least based on the data we have at the moment,” Karahan said.
He credited coordinated measures by the central bank and other institutions for keeping the risk of contagion limited so far.
He said the impact so far was mostly confined to the portfolio management companies concerned and their investors.
“We assess that the contagion risk is under control based on the data,” Karahan said. “But this does not mean everything is over. If we see the need, we will continue to take the necessary steps in every way.”
He said there had been a risk of volatility and disruption in lira markets, which was why a number of measures had been taken.
3 areas to watch
Karahan said the liquidation process was only at its start, and that a firm assessment of its macroeconomic effects would need to wait to see how it unfolds.
He said the central bank would track the impact in three areas: wealth, reserves and the real sector.
Karahan said financial wealth could decline somewhat, but that the effect on spending was expected to be smaller than that of the recent fall in gold prices.
For reserves, he said, what matters is where investors leaving the funds put their money. So far the data show a strong preference for the lira.
The third area is indirect effects through household and corporate balance sheets. Karahan said the central bank’s first analyses showed that real sector companies hold only a limited share of the liquidated funds, and that these are mostly large firms with strong liquid assets.
Any balance-sheet impact would therefore be expected to feed less strongly into the real economy. He stressed that these were initial findings and would be updated as data come in.
Cautious stance to continue
In his presentation before the commission, Karahan also said that disinflation is expected to regain momentum provided that supply pressures ease
He stressed that the bank would keep a cautious monetary policy to preserve gains achieved so far in lowering inflation.
Türkiye’s annual inflation dipped below 30% for the first time in almost five years in September, official data showed Monday.
Consumer price growth eased more than expected to 29.73% from 31.51% in August.
That marked the fourth consecutive month of decline, after the downward trend that started in mid-2024 stalled earlier this year following a sharp rise in energy prices caused by the Iran war.
Monthly price growth also came in below expectations at 1.84%, the same as in August.
Some analysts said the September reading raises the prospect of an interest rate cut at the Oct. 22 meeting.
The bank has kept its benchmark one-week repo rate at 37% this year, as it monitored the inflation impact of the Iran war.
Karahan said a slowdown in the disinflation process had been caused by war-related energy price volatility. But he added that “the main trend in inflation remains below annual inflation,” signaling that disinflation would continue if supply pressures fade.
He noted that upside risks to energy prices are being evaluated and that tight policy is seen as important in limiting the inflationary impact of supply shocks.
Karahan said a weaker-than-expected improvement in inflation expectations poses a risk to the disinflation process.
On the other hand, a slowdown in services inflation is continuing despite supply shocks, with weaker domestic demand also contributing, he noted.
Leading indicators show that a slowdown in rent inflation is expected to continue, Karahan said.
A slowdown in domestic demand has become marked, with indicators confirming a weakening of consumption activity, he noted.
Karahan also said the current account deficit-to-GDP ratio in 2026 is seen below long-term averages.
Türkiye’s combined electricity generation from solar and wind sources reached a record 9.9 billion kilowatt-hours (kWh) in August, the highest level on record, according to the Energy and Natural Resources Ministry.
Solar power generation stood at 5.16 billion kWh in August, while wind generation reached 4.74 billion kWh, the ministry said Tuesday.
Solar accounted for 14.1% of total electricity generation during the month, while wind’s share was 12.9%. Combined, the two sources generated a record 9.9 billion kWh.
Hydropower remains largest source
Türkiye generated 36.71 billion kWh of electricity in August, with hydropower maintaining its position as the largest source.
Hydropower accounted for 24.7% of total generation, producing 9.08 billion kWh during the month.
Renewable sources accounted for 56.4% of total generation, at 20.7 billion kWh, while domestic sources accounted for 69.7%, or 25.58 billion kWh.
Daily electricity generation also reached its highest level of the year so far in August. The daily record was set on Aug. 13, when generation reached 1,241,291 megawatt-hours.
Domestic generation reaches record share
During the January-August period, hydropower generation reached 75.2 billion kWh, wind generation 30.4 billion kWh and solar generation 29.8 billion kWh, marking the highest levels recorded for the corresponding period since 2000.
Domestic sources accounted for 73.2% of electricity generation during the period, producing 181.8 billion kWh. Both the volume and share were the highest for the corresponding period since 2000.
Renewable sources accounted for 60.3% of generation, at 149.8 billion kWh, also representing the highest volume and share for the corresponding period since 2000.
Energy and Natural Resources Minister Alparslan Bayraktar said Türkiye aimed to build a strong energy infrastructure through long-term investments in renewable energy.
“Our long-term investments in renewable energy infrastructure continue to translate into record generation figures,” Bayraktar said.
“Our goal is not only to meet today’s energy demand, but to build a strong, sustainable and innovative infrastructure that is completely free from external dependence,” he said.
Bayraktar added that Türkiye would continue integrating its substantial solar and wind potential into the grid using advanced technologies as it pursues its goal of achieving full energy independence.
Justice Minister Akın Gürlek said Tuesday that 85 suspects had been arrested so far in the investigation into Türkiye’s fund turmoil, and that five people had already handed back money they made through what he called “unjust gains.”
Gürlek said authorities would recover such profits from others who made them through market manipulation.
Regulators last month ordered the liquidation of over 130 investment funds managed by seven asset managers following warnings by some that they could not meet redemption payments.
Authorities have widened their investigation into suspected market manipulation in stocks and fund markets.
Legal action has been taken against 207 people in total, with measures imposed on the assets of many of them, Gürlek told Anadolu Agency (AA).
The funds ordered to be wound down had reached more than $20 billion in assets over just three years. About half a million investors have been affected.
Türkiye’s Savings Deposit Insurance Fund (TMSF) has opened accounts for investors seeking to return what authorities describe as “excessive gains” from fund sales.
Gürlek said five people had returned their unjust gains so far. Reports said among them was Fatma Betül Sayan Kaya, who resigned as a deputy chair of the ruling Justice and Development Party (AK Party) after she and her husband were alleged to have made substantial profits trading shares ahead of the turmoil.
Profits made by people who earned excessive gains over a short period would be transferred to a fund set up within the TMSF, the minister said.
“We will pursue our rights to the end within the framework of the law,” Gürlek said.
Gürlek drew a line between two kinds of earnings. Legitimate profit, he said, comes from citizens putting their savings into stocks and the stock market. The other kind came from so-called “bubble” stocks, where traders made abnormal profits by moving in and out quickly.
He said investigators had found that some people in closed and open funds had acted on tips and inside information, and used manipulative trades to make “extraordinary” profits over a short time.
He said the Istanbul Chief Prosecutor’s Office, working with data from the Capital Markets Board (SPK), Borsa Istanbul Stock Exchange and the Central Registry Agency, had frozen the assets of people who made abnormal gains.
Some of them had been arrested, he said, and others had fled. He said the process was continuing.
Gürlek said his ministry first noticed unusual movement in some funds and shares in February 2025 and wrote to the SPK about it. Citizens’ complaints then increased sharply in August 2026. Permission to investigate was granted later that month, he said.
Gürlek said the State Supervisory Council (DDK) had been tasked with examining whether any public institutions were negligent.
He said the Turkish market and economy were very strong and that a problem in a small part of the market should not be generalized.
The U.S. trade deficit surged more than analysts expected in August, government data showed Tuesday, hovering at its widest level since March 2025, driven by imports of oil and advanced tech products like chips.
The trade gap in the world’s biggest economy jumped 13.7% to $105.6 billion, according to Commerce Department data.
This was larger than the $102 billion projected in a consensus forecast released by MarketWatch.
U.S. trade flows have swung significantly since President Donald Trump returned to the White House in January 2025, as businesses rushed to get ahead of his sweeping, and fast-changing tariffs on trading partners.
The latest figures, which are adjusted for seasonality but not inflation, also reflect a surge in global energy prices from the war in the Middle East.
U.S.-Israel strikes targeting Iran in late February had triggered Tehran’s response in blocking the Strait of Hormuz, a key waterway for energy transport, which sent oil prices soaring.
Both sides remain locked in conflict.
In August, U.S. imports rose by 4.3% to $420.8 billion, driven by crude oil, gold, semiconductors and industrial machinery.
U.S. exports climbed by 1.4% to $315.2 billion, partially driven by energy exports too.
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