Economy
Türkiye reportedly weighs 10% withholding tax on money market fund gains
Türkiye’s Treasury and Finance Ministry has completed its assessment and preliminary work on measures aimed at redirecting short-term capital flows concentrated in money market funds toward longer-term and productive investments, a report said Tuesday.
The ministry is reportedly preparing to impose a 10% withholding tax on gains earned by corporate investors from money market funds, the report by private broadcaster Bloomberg HT said, citing sources familiar with the matter.
The move would form part of the government’s efforts to limit the risks associated with short-term capital inflows and encourage capital to remain in Türkiye for longer periods and contribute more directly to investment and production.
According to the report, the proposed measure would apply to gains from money market funds earned by both resident Turkish corporate taxpayers and nonresident corporate taxpayers.
Turkish taxpayers would reportedly be able to offset the withholding tax against their provisional corporate tax liabilities. For foreign corporate investors, however, the withholding tax would serve as the final tax, the report said.
The withholding tax on gains earned by resident and nonresident individual investors from money market funds is not expected to change. Under the reported plan, the existing 17.5% withholding tax for individuals would remain in place.
That would leave the proposed new regime focused specifically on corporate investors, including foreign institutions using money market funds for short-term investments.
The proposed regulation is expected to apply only to gains accrued after the decision is published, rather than retroactively taxing earlier gains.
Under the example cited by Bloomberg HT, a corporate investor that purchased a money market fund one month before the decision was published and sold it two months afterward would only be subject to the 10% withholding tax on the gain attributable to the two-month period following publication.
The reported proposal comes after the Treasury and Finance Ministry began examining the growing concentration of short-term capital in money market funds and the role of institutional investors in those funds.
The broader objective is to make capital flows into Türkiye more permanent and channel a greater share toward long-term, productive investment.
The price of corn surged to $5.2425 per bushel in global markets, hitting the highest level in about three years amid the El Nino weather phenomenon, dry conditions and rising geopolitical risks, including the Russia-Ukraine war.
Price movements in grains came to the fore due to El Nino, with sharp hikes in corn prices.
Corn previously reached $5.2450 on July 31, 2023.
Corn rose more than 11% compared with the end of July and increased more than 17% compared with the end of December 2025.
The bushel price of corn later stabilized at around $5.18.
Growing concerns over crop yields in the U.S. fuel expectations of tighter supplies and drive up corn prices, while rising U.S. corn exports contribute to the price increase.
Hot and dry weather in some corn-producing regions of the U.S., adverse weather in Europe and ongoing grain shipment disruptions in Ukraine fuel concerns over the global corn supply.
The corn harvest in the American Midwest came in lower than expected, while Russian and Ukrainian attacks on each other’s shipping routes halted grain exports.
While weather conditions threaten production, geopolitical disruptions pose risks to crop deliveries, and given the already high energy and fertilizer costs, the margin for offsetting additional supply shocks narrows.
Waning expectations of Federal Reserve (Fed) rate hikes and falling demand for the U.S. dollar also continue to drive up commodity prices.
Zafer Ergezen, a futures and commodities expert, told Anadolu Agency (AA) that El Nino’s effects began to be seen in June, especially in South America, Southeast Asia and Australia, and to a somewhat lesser extent in the U.S. and Europe.
“We’re seeing a serious impact of the weather phenomenon in West Africa,” he said. “There were concerns over a decline in corn yields, especially in Brazil, the U.S., and Southeast Asia.”
Ergezen stated that oil prices also contributed to the rise in corn prices as demand for corn used in biodiesel production climbs when oil prices rise, while around 60% of the corn produced across the globe is used for industrial purposes.
The combined effects of El Nino and high oil prices were instrumental in raising corn prices.
“El Nino will continue until the beginning of next year, and if oil remains at these levels, we may see even more upward movements in corn,” he said.
“As long as oil prices don’t decline and there isn’t a lasting peace deal between the U.S. and Iran, I don’t expect a deep pullback in corn prices,” he added.
Türkiye’s central bank reserves are projected to have increased last week to their highest level in five months, bringing the rebound since late June to nearly $40 billion, according to calculations.
The total reserves of the Central Bank of the Republic of Türkiye (CBRT) rose by an estimated $5.3 billion in the week ending Aug. 21, reaching $188.8 billion, calculations by Matriks Haber showed.
Total reserves stood at $183.5 billion in the previous week. The latest increase extends the recovery that began after reserves fell to a roughly six-month low in late June.
Reserves had dropped to $149.2 billion in the week ending June 26, before recovering to $164.4 billion by the end of July. The pace of the rebound accelerated in August, with reserves rising to $178.4 billion on Aug. 7 and $183.5 billion a week later.
The latest increase would bring total reserves to their highest level since the week ended March 13.
Rebound since June
The estimated figures show that reserves have increased by about $39.6 billion from their June 26 low.
The recovery has been particularly strong over the past four weeks, with reserves gaining about $10.4 billion between July 31 and Aug. 21.
CBRT total reserves had reached a record $218.2 billion in late January.
The figures for the last week are scheduled to be published Thursday.
Consumer goods giant Unilever is betting that cutting off food assets and focusing instead on beauty, personal care and home products would close a valuation gap with more focused rivals.
The challenge is convincing investors that a simpler company can deliver higher returns.
The maker of products such as Dove soap, Axe deodorant and Cif cleaning products trades at 11.5 times enterprise value to core earnings, according to LSEG data. That compares with 14.8 for Procter & Gamble (P&G), 17.5 for L’Oreal and 22.7 for Coca-Cola.
Those multiples suggest investors place a premium on more focused consumer goods companies.
But investors have two main concerns.
Unilever’s deal in March to merge its food business with U.S. spice maker McCormick will leave the British group with an almost 10% stake in the combined company, and its shareholders with a roughly 55% stake.
At the same time, the transaction reduces Unilever’s exposure to a relatively high-margin business, increasing pressure on management to show that faster-growing beauty, personal care and home products can make up the difference.
“Until you show me the evidence that you’re turning this around, you’re sitting on a very low multiple,” said Dan Hanbury, a portfolio manager at Ninety One, a major investor in Colgate-Palmolive, Unilever and L’Oreal.
The market is wary of “false dawns” from corporate turnarounds, he added, saying Unilever probably needed three or four quarters of strong volume growth to win over doubters.
The P&G example
Big industrial companies from General Electric to Siemens have spent years simplifying their structures in an effort to eliminate what investors call a conglomerate discount, a penalty applied to companies whose complexity is seen as weighing on efficiency and growth.
That thinking has increasingly spread to consumer goods companies. Where diversification was once seen as a strength that could cushion changes in consumer tastes, investors now increasingly favor category leaders that can focus investment, innovation and marketing on a narrower set of products.
Under CEO Fernando Fernandez, Unilever has accelerated its retreat from food. The company spun off its ice cream business, and in March struck a roughly $65 billion deal to combine its food division with McCormick.
The issue is not that food is unprofitable. The business has historically generated attractive margins, but growth has lagged Unilever’s beauty and personal care operations.
“Being focused on a single category allows you to be more cost-effective and more innovative,” said Akeel Sachak, global head of consumer at Rothschild & Co.
Investors often point to Procter & Gamble as a template. The Tide detergent maker exited food and streamlined its brand portfolio, subsequently delivering stronger growth and earning a valuation premium for much of the following decade.
“P&G pulled off the restructuring, drove higher growth and commanded a relatively higher premium for probably 10 years,” Hanbury said.
Improving results
Investors and analysts say the focus for Unilever has now switched from portfolio reshuffling to execution.
“If (Unilever) continues to execute, Unilever will continue to see a degree of re-rating … and then hopefully grow from there,” said Will James, portfolio manager at Guinness Global Investors, which holds shares in Unilever and L’Oreal.
Unilever has reported improving results in recent quarters, and in July said sales volumes had reached their highest level in more than a decade.
Yet despite the operational improvement, some Unilever investors are concerned about their continued exposure to the slow-growing food category via their stake in the company, resulting from the McCormick merger, Barclays analyst Warren Ackerman said.
Unilever declined to comment.
CEO Fernando Fernandez told an industry event in June: “I believe that every quarter that goes by, and we deliver the numbers that we have been delivering, and we get closer to the closing of a transaction of McCormick, the value of Unilever will be shown.”
The German economy expanded slightly more than previously estimated in the second quarter of the year, owing to strong exports, official data showed Tuesday, thus weathering the turmoil unleashed by the U.S.-Iran war better than feared.
Gross domestic product (GDP) grew 0.3% from April to June compared with the first three months of the year, according to revised data from the statistics office, Destatis.
A first estimate in July had put growth at 0.2%, after expansion of 0.4% in the first quarter.
“The German economy is maintaining the growth momentum seen at the start of the year,” said Destatis’s chief, Ruth Brand, adding that “growth was primarily driven by the positive development of exports.”
The revision to second-quarter growth is another sign that the eurozone’s manufacturing powerhouse could be weathering the energy shock unleashed by the U.S. and Israel’s war against Iran better than feared.
Factory output and exports have also been up in recent months despite the fallout from the conflict.
The closely watched ifo business confidence survey released Tuesday rose for the fourth time in a row in August, to 88.8 points, its highest level in over a year.
The increase beat analyst expectations and was a “huge surprise,” said Frank Brandmaier, an analyst at the bank KfW, adding that it was the latest piece of data to “suggest that the overall positive trend is continuing.”
‘More resilient than feared’
The revised GDP data showed that exports rose 2% in the second quarter from the first, while imports were also up substantially.
Investment fell slightly, dragged down by a hefty fall in the machinery and equipment sectors. Spending by both households and governments registered a small increase.
The German economy has stagnated for several years due to high energy costs, growing competition from China and U.S. President Donald Trump’s tariffs.
Hopes had been high at the start of the year that it would stage a strong rebound thanks to Chancellor Friedrich Merz’s spending blitz on defense and infrastructure.
The outbreak of the Middle East war has dimmed those expectations after the hit to energy-intensive manufacturers, with the government now expecting growth of just 0.5% for 2026 as a whole.
The revision of GDP data “is clearly good news,” ING bank analyst Carsten Brzeski told Agence France-Presse (AFP), adding that “it shows that the economy has been more resilient than feared.”
“It also shows that German industry benefited from the fact that Asian competitors suffered more from the war in the Middle East than they themselves. Some industrial orders were actually reverted from Asia to Germany,” he said.
Brzeski warned, however, that Germany faced other problems, from high global energy prices to low water levels on major rivers after months of drought that have hampered cargo transport.
He also warned that Merz’s government must push through a raft of reforms it has promised, from social welfare overhauls to efforts to ease bureaucratic hurdles and other burdens on business.
“Looking ahead, the low water levels, the continued high oil prices and the political struggle to really implement the announced reforms are clear headwinds for German growth,” Brzeski said.
Iranian rial plunged to a record low on Monday as Washington prepared to announce new sanctions that it said would put more pressure on a fragile economy already battered by previous sanctions and a U.S. naval blockade.
The rial dropped to 2.02 million to the U.S. dollar as trading opened on currency markets. Iran’s official central bank rate stood at around 1.5 million rial to the dollar, but the market rate is what most Iranians pay.
The currency had already been under pressure before the U.S. and Israel attacked Iran on Feb. 28, as Iran faced double-digit inflation and negative growth.
The rial has repeatedly hit new lows as nearly six months of war have taken an even greater toll.
Iranians find daily staples increasingly unaffordable. Since the war began, rice is up some 60% and beef prices are more than 150% higher.
The International Monetary Fund (IMF) forecasts that gross domestic product (GDP) will contract more than 5%.
Still, economic pressure has not yet translated into political pressure.
Iran retains a key strategic advantage: Its attacks and threats on ships in the Strait of Hormuz have brought traffic in the vital waterway to a near halt, damaging the world economy and heaping pressure on U.S. President Donald Trump ahead of congressional elections.
The war, as a result, has devolved into a fight over who controls the strait, through which a fifth of the world’s traded oil transited before the conflict. Iran is now refusing to fully reopen it unless it can charge ships.
Iran and Oman, which is located on the opposite side of the strait, are reportedly in the final stages of agreeing on a plan for joint management of the waterway. Oman’s foreign minister is set to visit Iran on Tuesday.
In an attempt to break the impasse, Trump’s administration promised that even stronger sanctions would be announced on Monday, including secondary sanctions on countries that continue to do business with Iran.
Ahead of the announcement, Trump posted on social media that “IRAN IS COMPLETELY COLLAPSING!!!”
“President Trump decimated Iran’s economy to a point where the rial has never been weaker and inflation has rarely been higher,” U.S. Treasury Secretary Scott Bessent wrote Sunday in an opinion piece in the Financial Times (FT).
“The regime’s final refuge now lies in the self-deception of fearful nations that still believe accommodating aggression can secure a durable peace.”
Already last week, the United Arab Emirates (UAE) announced that it was suspending all trade with Iran. The UAE has long been one of Iran’s largest trading partners and its biggest source of imports.
Iranian Foreign Ministry spokesperson Esmail Baghaei told reporters in Tehran on Monday that “any escalation of this situation will undoubtedly bring about consequences.”
“Our hands are not tied,” he added.
Pakistan, which played a key role in brokering a 60-day cease-fire in June, sent a high-level delegation to Iran on Monday to discuss ending the war, the military said.
Trump recently spoke with Pakistani Field Marshal Asim Munir ahead of the army chief’s visit to Iran, according to a person familiar with the discussion.
The person spoke on condition of anonymity to confirm a private conversation. Reuters, citing Pakistani sources, first reported the call.
In downtown Tehran, 73-year-old Sadegh Mahmoudi did not hold out hope for a resolution.
He joined a line of about a dozen people to purchase U.S. dollars, with his remaining savings to hedge against further declines.
“There is no hope for a deal and peace,” he said.
U.S. Treasury Secretary Scott Bessent pledged on Monday to crush Iran’s economy as he gave a live address on a new pressure campaign against Tehran nearly six months into the war, suggesting “no one” should test Washington’s resolve.
Bessent said that new U.S. sanctions aim to “block every potential source of revenue” for Iran and told nations to cut economic ties to Tehran or face retaliation. He termed the operation as the “Operation Economic Outcast.”
“Around the globe, our objective is to sever every economic lifeline that sustains this tyrannical regime until Tehran stands alone,” Bessent told a press conference, announcing secondary sanctions measures.
He said Tehran had two choices before them, either “complete global isolation” or the “path to normalcy.”
Bessent made the announcement as Iran’s currency hit a record low.
“We are going to hold everyone accountable, and this is economic asphyxiation of this regime.”
He added that countries not joining U.S. sanctions would “share in the isolation” of Iran, and noted that President Donald Trump is making phone calls to world leaders with requests to stop their interactions with Tehran.
The Treasury Department said Monday that it has “issued determinations against five critical sectors – digital assets, technology, gold, aviation, and shipping – that the Iranian regime uses to try to prop up its failing economy.”
Bessent, meanwhile, vowed that any entity “that facilitates money laundering on behalf of Iran will be removed from the U.S. dollar system.”
Asked if Chinese banks dealing with Iran could be targeted, Bessent said that: “No one is above the reach of U.S. sanctions.”
“Those who stand with the United States will reap the rewards of our partnership. Those who tether themselves to the Iranian regime should expect to share in the isolation,” he also said.
The Treasury chief earlier declared that an “economic D-Day” had begun against Tehran, in a column for the Financial Times.
The U.S. and Israel triggered the Middle East war with a massive wave of bombing against Iran on Feb. 28, sparking Iranian retaliation across the region.
-
Sports3 days agoTop 10 greatest sports rivalries in world, ranked
-
Sports3 days agoHull roar back into Premier League with 2-0 rout of Man Utd
-
Economy2 days agoAt 55, China-Türkiye ties expand beyond trade into strategic co-op
-
Politics19 hours agoNetanyahu clings to anti-Türkiye campaign amid Likud’s decline
-
Politics22 hours agoVerdict likely due in cases of corruption linked to CHP mayors of Türkiye
-
Economy1 day agoTurkish central bank resumes repo auctions after nearly 6-month pause
-
Politics2 days agoErdoğan targeted for standing up to Netanyahu’s genocide: AK Party spox
-
Economy21 hours agoTurkish households shift toward gold as real estate appeal declines