BELGRADE (Reuters) – Serbia’s central bank, going against the flow in most of the world, raised interest rates by two percentage points yesterday to prop up the faltering dinar currency and fight high inflation. The decision was announced ahead of a Savings Week initiative, with banks trying to attract back savers, after an 8.5 percent decline in deposits earlier this month on fears that the global financial storm could hit Serbia. The National Bank of Serbia said it would raise its two-week repo rate to 17.75 percent as of November 3, the day when Governor Radovan Jelasic is due to present the reasons for the rate decision. The rate change came as a surprise. “If they hiked rates in different circumstances, the impact of the rate rise on the dinar would have been more significant,” said Zoran Petrovic, board member at Raiffeisenbank.

NICOSIA (Reuters) – Cyprus’s tourism earnings fell 4.1 percent in the year to September, official statistics showed yesterday. Earnings from the sector were estimated at 1.47 billion euros from January to September compared to 1.53 billion euros in the first nine months of 2007. In September alone, tourism revenue reached 247.4 million euros, a 5.9 percent drop from September 2007. A statistical breakdown showed that Irish, Dutch, Italian and Russian holidaymakers were comparatively the biggest spenders, spending more than 100 euros per day. Greeks and Americans spent the least, at just under 65 euros a day. Britons, who account for half of Cyprus’s tourism market, were spending 74 euros a day compared to almost 80 last year.

Turkey’s September trade deficit narrowed 7 percent from a year earlier to $5.042 billion, the national statistics office said yesterday. September exports rose 42 percent year-on-year to $12.831 billion, while imports climbed 23.6 percent to $17.873 billion, resulting in a trade deficit that was smaller than the $6.1 billion expected by economists. The trade deficit for the first nine months of the year widened to $58.169 billion, 28.3 percent higher than the same period in 2007. (Reuters)

Turkey’s weakening lira currency will boost fourth-quarter inflation, the central bank said yesterday as it raised its forecast for end-2008 inflation by 0.5 percentage points to 11.1 percent. The lira has lost up to a third of its value against the dollar this year as Turkish financial markets have been hard hit by growing risk aversion toward emerging markets. Swings in the lira’s exchange rate are expected to add 1.2 percentage points to inflation this year and 1.5 points in 2009, central bank Governor Durmus Yilmaz told a news conference on the bank’s latest quarterly inflation report. (Reuters)

The US Trade and Development Agency and the Overseas Private Investment Corporation will invest up to $500 million each in renewable energy in Turkey, Turkish Energy Minister Hilmi Guler told Reuters yesterday. He was speaking on the sidelines of a World Economic Forum meeting in Istanbul. (Reuters)