In Brief

Hint at Turkish rate cut to halt ‘hot money’ inflows ISTANBUL (Reuters) – Turkey’s central bank surprised financial markets yesterday by saying rate cuts may now be required to halt «hot money» inflows, which raised the risk of an asset bubble, and to curb a rising current account deficit. The yield on Turkey’s August 8, 2012 benchmark bond yield fell around 20 basis points to a historic low of 9.46 percent in response to the comments by Erdem Basci, deputy governor of the central bank, as analysts bet the institution would cut its benchmark repo rate from 7 percent as early as at a meeting on Thursday. Erdem’s comments followed a warning by Finance Minister Mehmet Simsek earlier this month about the risk of capital inflows fueling runaway asset prices. Financial markets, however, had still expected the central bank to keep rates on hold before raising them in the last quarter of 2011. Cyprus tourism arrivals post rise of 1.8 percent NICOSIA (Reuters) – Tourism arrivals in Cyprus rose 1.8 percent in the first 11 months of 2010, the island’s statistics department said. Tourism accounts for almost 12 percent of Cyprus’s gross domestic product. Arrivals have been inching up in the second half of the year after a 10.9 percent nosedive in 2009. Arrivals totaled 2.11 million people from January to November, compared to 2.07 million in the corresponding period of 2009, data released yesterday showed. In November there was a 26.4 percent increase in arrivals from Russia and a 10.6 percent increase in arrivals from Germany. There was a 16.2 percent drop in arrivals from Britain, Cyprus’s largest market. Bulgarian inflation Bulgarian consumer price inflation accelerated to 4.6 percent year-on-year in November from 3.9 percent a month earlier, mainly due to a spike in food prices, the statistics office said yesterday. The CPI figure exceeded the government’s end-year inflation forecast of 4.1 percent. On a monthly basis, inflation in November was 0.7 percent, up from a 0.6 percent increase in October, pushed up by the prices of flour and vegetables, the data showed. Food prices rose 1.2 percent on the month, while nonfood prices increased 0.4 percent and prices of services were 0.5 percent higher. (Reuters) N-plant finance Bulgaria needs to reach a deal with Russia on the price of a planned nuclear plant at Belene before it decides how to proceed with the 2,000-megawatt project, the executive director of state power utility NEK said. Krasimir Parvanov said Moscow, eager to expand its nuclear presence into the European Union, has renewed its offer to extend 2 billion euros to start off the project, which Bulgaria put on hold last summer. «We have been offered an option envisioning financing of 2 billion euros by the Russians, but there will be no movement on the project before we can agree on a final price,» Parvanov told Reuters in an interview. (Reuters) Romanian debt Romania sold far more one-year debt than planned at auction yesterday, getting a vote of confidence from foreign investors as average yields fell to match a cost cap the government imposed earlier this year. Traders said the central bank has mopped up less liquidity from the market than many had expected, one of the main factors behind a recent surge in demand for Romanian debt. Foreign interest was also boosted by November’s move to drop a six-month attempt to cap yields at 7 percent and the government’s adherence to austerity measures to comply with an International Monetary Fund aid agreement, easing concerns over the country’s financing and raising hopes of a new deal. (Reuters) Serbian prices Serbia’s inflation has breached its upper target level of 8 percent for 2010 and will continue to rise in the first few months of 2011 before tapering off later next year, the central bank governor said yesterday. Consumer price inflation accelerated in November to 9.6 percent year-on-year, against 8.9 percent in October, mainly driven by food prices, the Statistics Office said. «For December, we see a stagnation of inflationary expectations, but still above the target,» Dejan Soskic said. He said the bank’s inflation forecast in Q1 of 2011 sees «a rise above the target band of 4.5 percent, plus or minus 1.5 percent.» (Reuters)

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