Aurelia Butler

ANKARA (Reuters) – Turkey’s lira rocketed back from record lows in volatile trading on Tuesday after Turkish President Tayyip Erdogan proposed measures to protect local currency savings against such swings.Erdogan introduced a series of steps late on Monday that he said will ease the burden of a weakened currency on Turks and encourage them to hold lira rather than dollars.Under Erdogan’s plan, his government promised to guarantee deposits in lira, sending the currency soaring some 25%, its biggest intra-day rally on record, at one point on Monday.The Turkish currency, which has lost 44% of its value against the greenback this year, initially strengthened on Tuesday to a daily high of 11.0935 versus the dollar, later weakening to 14.3885 before swinging back to 12.6 at 1018 GMT.The government has pledged to pay the difference between the value of savings in lira and equivalent dollar deposits. More than half of locals’ savings is in foreign currencies and gold, according to central bank data, due to a loss of confidence in the lira after years of depreciation.The lira has plunged to record lows this year over fears of an inflationary spiral brought on by Erdogan’s push for monetary easing. At its low, it was down some 60% on the year.Alpaslan Cakar, head of the Turkish Banks Association (TBB), said the Treasury would meet the costs of the measures, which could prove an expensive and inflationary initiative.Some $1 billion was sold in markets after the announcement, Cakar said. Calculations by three bankers estimated around $1-1.5 billion in savings were converted to lira.A source with knowledge on the matter said the measures were decided after the exchange rate hit “problematic” levels, adding the government would manage the coming period carefully.”The dollar and euro had risen up to the point of forming a bubble really. This needed to be intervened in. This situation was not sustainable,” the person said, requesting anonymity.Finance Minister Nurettin Nebati said details of the new economic scheme would be announced at 1100 GMT.Turkey’s five-year credit default swaps, the cost of insuring against sovereign default, jumped to 613 bps, the highest since May 2020, according to IHS Markit.Meanwhile, one month implied volatility in the Turkish lira jumped to 63%, its highest on record. (Graphic on, Lira volatility hits record hit: https://fingfx.thomsonreuters.com/gfx/mkt/gdpzymlxkvw/Pasted%20image%201640076530130.png) Presidential adviser Cemil Ertem told Reuters the moves had removed the need for individual investors’ dollar demand, adding it was “a very important paradigm shift” for Turkey’s economy.A senior banker said infrastructure and regulation would have to be introduced before the deposit guarantee measure could be implemented, adding it was not clear how the extra money given by the government to the deposit holder would be taxed.’MOTHER OF ALL RALLIES’While the government called the lira’s rebound on Monday a major win on policy, economists have said Erdogan’s economic programme based on low interest rates is reckless and expect inflation, currently above 21%, to blow through 30% next year.Turkey’s EPDK energy regulator said, after the lira’s rally, it had halted planned price hikes for now. Turkey’s main BIST 100 stock index was down 6.12% on Tuesday, triggering indexwide circuit breakers that halt trading temporarily.Under pressure from Erdogan, the central bank has cut rates by 500 basis points since September. The president has pledged to continue with his low-rates policy, including on Monday.Some economists have said the new measures are effectively veiled rate hikes that may not ultimately stem the selling pressure on the lira, while putting a strain on the Treasury. “It can have dangerous consequences,” said Refet Gurkaynak, head of Bilkent University’s economics department, in Ankara. Jeffrey Halley, senior market analyst, Asia Pacific, OANDA, said it remained unclear how the government would carry out the new measures “especially in a short time”. More

WASHINGTON (Reuters) – Spurred by the coronavirus pandemic, dozens of U.S. cities are deploying a new tool in their war on poverty: cash.At least 16 cities and counties are handing out no-strings-attached payments to some low-income residents, a Reuters tally found. At least 31 other local governments plan to do so in the months ahead. That’s a departure from most U.S. anti-poverty programs, which provide benefits for specific needs like groceries or rent and require recipients to hold a job or look for work.Advocates say the people receiving the aid, not bureaucrats, know best how to spend their money. “It’s a complete rejection of the notion that we need to Big Brother people to a way out of poverty,” said Michael Tubbs, who set up the nation’s first “basic income” program in 2019 while he was mayor of Stockton, California.Jonathan Pedro, 37, said he has been able to pay down debt and buy hockey equipment for his 11-year-old son thanks to the $500 monthly checks he gets through a Cambridge, Massachusetts program aimed at single parents.”I’ve been trying really hard to bounce back and this check makes it so much easier,” he said.Cash payments were a pillar of the U.S. safety net for much of the 20th century but fell out of favor amid criticism that they discouraged people from working. Democratic President Bill Clinton scaled them back, made them temporary and added a work requirement in 1996. Fewer than one in four poor families now get those benefits.In recent years, the notion of a universal basic income has gained currency in the face of worries that automation will lead to widespread layoffs, and a belief among racial-justice advocates that the current system is inadequate and demeaning. Andrew Yang made it the centerpiece of his long-shot bid for the 2020 Democratic presidential nomination.The federal government provided a proof of concept over the past two years, sending more than $800 billion to households in three COVID-19 aid packages. Washington delivered another $93 billion to 36 million families this year through an expanded child tax credit. Those relief packages included $500 billion to state and local governments, and at least 16 local governments are using the money to set up Stockton-style basic income programs for low-income residents, records show. Others are drawing on funds provided by Mayors for a Guaranteed Income, an advocacy group formed by Tubbs, or private philanthropy.”We’re 60 years into the war on poverty, and the notion of giving money to poor people still feels profoundly new. Maybe that’s the problem,” said Melvin Carter, the mayor of St. Paul, Minnesota, which launched a basic income program last year.Unlike Yang’s proposal, which would have covered everybody, the new city-based programs are small in scale, typically serving several hundred families, and are aimed only at low-income people. Some cities invite people to apply and then do a random drawing. Others focus on specific populations: St. Paul targets families with newborn children, while Pittsburgh says half of its 200 participants will be Black women.Durham, North Carolina, will provide checks to people getting out of prison. A program in Jackson, Mississippi, focuses on Black mothers in public housing.Advocates hope these efforts will ultimately convince Washington to set up a national basic income program. They point to a sheaf of studies that show positive results. Participants in Stockton’s program were more likely to be working full-time, while participants in Jackson were more likely to pay their bills on time. One survey found that recipients spent less on alcohol and tobacco than they did before.’ALTERNATIVE OPTIONS’With many U.S. businesses struggling to hire workers, some say it would be better to expand existing programs.”If the goal is more work, then we have alternative options,” said Kevin Corinth, who served as a top White House economist in the Trump administration and is now at the University of Chicago’s Harris School of Public Policy.A national program also would be expensive. One proposal to keep every American above the poverty line, set at $26,500 for a family of four in 2021, would cost $876 billion, more than doubling U.S. anti-poverty spending. Another would cost more than twice that amount.Advocates say their first step is to shore up the expanded child tax credit, which is due to expire at the end of this year. Cost concerns prompted Democrats to cut a permanent expansion from President Joe Biden’s imperiled $1.75 trillion “Build Back Better” spending proposal. In the meantime, low-income participants like Andrea Coleman, 40, are finding it a little easier to make ends meet. The mother of three, who works as a home nurse, said she plans to buy a proper pair of shoes to replace the foam sandals that serve as her only footwear in St. Paul, Minnesota, where the temperature is expected to dip to 7 degrees Fahrenheit (-13.9° Celsius) this week.”It’s that extra money that helps get over that little hump, helps get that burden off your back,” she said. “It gives me a free heart.” More

OAKLAND (Reuters) – Black and Hispanic tech startup funding ticked up in Florida and Georgia this year, following an influx of investors fleeing California and efforts by some venture capitalists to focus on minority founders in the wake of George Floyd’s killing. The technology industry has long been criticized for overlooking Black and Latino founders, and the improvement was greeted with some caution. Floyd’s death sparked a national outcry about the treatment of people of color in many areas, but often without clear results.”The numbers are broken, right? The numbers are an order of magnitude away from where they should be,” said Paul Judge, managing partner at Panoramic Ventures in Atlanta, which focuses on investments in startups by minority founders. “But they do have movement based on a more diverse city to begin with.”The rise of remote work during the pandemic led several Silicon Valley venture capitalists to escape California, with its wildfires and high taxes. Miami, with a large Latino population, and Atlanta, with a large Black population, have both seen higher interest.Data from Crunchbase compiled for Reuters showed startups with a Black or Hispanic founder got 3.5% of the record $311 billion U.S. venture funding in the year to Dec. 16, up from an average 2.5% in the previous five years.Florida and Georgia were the only states with significant deal flow that showed an increase in the number of deals for Black and Latino companies. The number of such deals rose to 41 from 35 in Florida, and 23 from 21 in Georgia. Deals to minority founders in Florida were 4.5% of the total $6.9 billion of funding, up from 2.5% in the previous five years.Deals to minority founders in Georgia made up 13.7% of $3.2 billion of funding, up from 5.3% in the previous five years.California and New York, the largest venture capital hubs, both showed several-fold increases in funding to minority founders, in dollar terms, driven by huge deals. But the number of deals to companies run by people of color, a sign of the rate of new companies finding backers, dropped to 178 from 252 in California and 102 from 108 in New York. SoftBank Group International Managing Partner Shu Nyatta was among those who moved to Miami. He said the improved funding was incremental but could compound into something important.“If you are a founder of color in Miami, it is easier just probabilistically to sit at the table with someone who can write a decent size check than in San Francisco,” he said. SoftBank invested over $300 million this year as part of its Miami initiative to help build up the city as a tech hub. It also launched the SB Opportunity fund in 2020 to invest in Black and Latino founders; $75 million of the $100 million of that fund has been invested in 65 startups.The founders of META4, a crypto-currency fund, were able to get backing from top Silicon Valley venture capital firm Andreessen Horowitz whose partners have been spending time in Miami.“If we weren’t in the same place at the same time talking through things and connecting, it would have been very different,” said Meta4 co-founder Nabyl Charania, a South Asian born in Kenya.Still, he says, things are tough for Black and brown founders in Miami. “It’s a nuanced conversation,” Charania said. More

McDonald’s Japan has joined the unfortunate ranks of Toyota, Sony and other industrial titans that have fallen victim to a chip supply crisis.The fast-food group said on Tuesday that because of delivery delays from Canada, it would only be able to offer the smallest serving of french fries at its 2,900 outlets.An emergency plan to ensure “continuous supply of french fries to customers” has been introduced, said a company spokesman.Medium and large servings will be cut and customers would be offered a small discount on meal prices, he said, adding that deliveries of fries by airfreight had started to arrive in Japan. Supplies of hash browns, which appear on the breakfast menu, appear unaffected by the delivery disruption. McDonald’s said the fries rationing would start on December 24 and was expected to end on December 30. The shortage comes during the festive period which is traditionally dominated by rival KFC. For nearly half a century, Japanese consumers have ordered KFC chicken on Christmas thanks to an advertising campaign that successfully linked the fast-food chain with the holiday. KFC operates a family bucket pre-booking system to ensure that it meets the December 25 rush for deep-fried poultry.

In an annual attempt to dislodge KFC from its top Yuletide spot, McDonald’s is running a seasonal campaign centred on a bargain serving of chicken nuggets. The advertisement, which was produced before Tuesday’s announcement, shows a family enjoying both the nuggets and the largest serving of fries.Japan is one of the fast-food company’s largest markets outside of the US. The chip issue was a result of the combination of the Covid-19 pandemic and a severe backlog at the Vancouver port following recent flooding and landslides that destroyed highways.The blockage aggravated the supply chain turmoil caused by a pandemic boom for goods and congested ports that have significantly pushed up freight costs. Burger King said it had no plans to change its french fries sales. KFC could not immediately be reached for comment. Fragilities in Japan’s potato supply chain were an issue before the pandemic. In 2017, a weak autumn harvest of potatoes in the northern Japanese island of Hokkaido led to a shortage of crisps and, in some instances, hoarding by consumers alarmed at the impending absence of their favourite snacks. More