Türkiye has raised the euro-lira conversion rate for medicine prices by 30.5% to 14.0387 lira per euro, the country’s Official Gazette showed on Sunday.
The updated conversion rate is nearly half the market rate, with the lira standing at 29.9727 against the euro at Friday’s close, Reuters said.
The increase in medicine prices could further stoke inflation, which is already expected to rise more this year due to the lira’s depreciation and recent tax hikes introduced by Ankara. Economists are revising their end-2023 inflation forecasts to around 60% from 38.21% in June.
China hopes France can “stabilize the tone” of EU-China relations, vice-premier He Lifeng told his French counterpart in Beijing on Saturday, as European leaders debate how balance “de-risking” and cooperating with the world’s second-largest economy.
He also told French Economy Minister Bruno Le Maire that China is willing to deepen cooperation with France in traditional areas such as finance as well as in science and technological innovation, as the two sides meet for their ninth Economic and Financial Dialogue.
“It is hoped that France will stabilize the tone of friendly cooperation between China and the EU,” He said during opening remarks to an afternoon of discussions at Beijing’s Diaoyutai State Guest house, adding that China believes its bilateral ties with France “have a good foundation.”
China is France’s third largest trade partner behind the European Union and the United States, but French firms are becoming increasingly concerned they could get caught in the cross-fire of rising economic rivalry between the world’s two economic superpowers.
European Union governments last month also approved an 11th tranche of sanctions against Russia that could hit Chinese firms considered circumventing measures that were already in place.
Le Maire said the three challenges the two countries should work together on are the green transition, re-organization of value chains, and technological revolution, while also raising market access issues for French companies in the banking, nuclear, cosmetics and agricultural industries.
“It is essential to think about the expansion and deepening of economic and financial cooperation between France and China,” La Maire said. “We would like to welcome major new investments from China to French territory.”
China’s He told his guests the meeting was a “positive signal that China and France will work together to address challenges and inject stability into an uncertain world,” which has “accelerated into a new situation of instability and uncertainty” not seen in a hundred years.
The United Arab Emirates has temporarily banned rice exports and re-exports for four months as of Friday.
The decision included banning the export and re-export of rice originating India imported into the country, including free zones, after July 20.
The UAE Ministry of Economy said the ban would cover rice of all varieties including brown rice, fully or partially milled rice, and broken rice.
Companies wishing to export, or re-export rice must submit a request to the Ministry of Economy to obtain an export permit outside the country.
The permit would be issued “provided that the request is supported by all documents that help verify the data related to the shipment to be exported in terms of origin, the date of the transaction, and any other requirements that the ministry may require in this regard,” the statement added.
The ministry added that the permit to export rice products would be valid for 30 days and must be submitted to customs authorities, in order to complete procedures. Requests can be submitted online or directly at the headquarters of the Ministry of Economy.
The ministry said the decision can be extended automatically unless a decision is issued to cancel its implementation.
India had banned exports of non-basmati white rice in an effort to control rising prices and boost availability to Indian consumers.
From April to June this year, India’s exports of white rice except basmati rice rose by 35 percent.
Russian Energy Minister Nikolay Shulginov announced on Thursday a partnership with Algeria to produce two million cubic meters of gas daily.
Meanwhile, Algeria and Japan signed an agreement to establish a committee to develop economic cooperation and trade between their countries.
The developments reflect a new Algerian approach in seeking new partners, away from the traditional partners, especially in Western Europe.
Gazprom plans to start the production of hydrocarbons at the El Assel area in Algeria in 2026, Shulginov said in an interview with TASS on Thursday.
The project is a $1 billion investment between Gazprom and Algerian oil company Sonatrach to develop two newly discovered fields in the El Assel area and Hassi Messaoud (900 km to the south of the capital).
The partnership aims to produce two million cubic meters of natural gas daily, more than 1,000 tons of condensers, and more than 220 tons of liquefied petroleum gas.
“We also discussed Gazprom’s operations in the country. In 2026, the company plans to start the production of hydrocarbons in the El Assel area,” Shulginov said.
Overall, Moscow and Algiers agreed to expand the presence of Russian companies in gas production projects in Algeria, the minister added.
The announcements were made in wake of Algerian President Abdelmadjid Tebboune’s visit to Russia in mid-June.
Gazprom and Sonatrach are jointly developing the El Assel area in the country. Gazprom International is the operator of the project at the geological exploration stage. Gazprom’s share in the project totals 49%, while Sonatrach holds 51%.
Shulginov made his remarks ahead of the 2023 Russia–Africa Summit in St. Petersburg on Friday.
Russian gas companies are ready to participate in projects on the supply of LNG and on the construction of gas infrastructure in Africa, he added.
He further revealed Moscow’s plans to expand in Africa.
Meanwhile, Algeria’s Acting Secretary General of the Ministry of Foreign Affairs and National Community Abroad Noureddine Khandoudi and Japan’s Ambassador to Algeria Kono Akira signed an agreement to set up the Algeria-Japan Joint Economic Committee.
The Committee will be co-chaired by high-level government representatives, read the agreement.
Japan’s Ambassador stressed that Japanese businessmen are interested in investing in Algeria.
He hailed the “significant efforts exerted by Algeria in enhancing the business climate, especially with the issuance of the new investment law and other legislations.”
Fourteen Iraqi private banks hit with curbs by the United States over allegedly helping siphon US dollars to Iran said on Wednesday they were ready to challenge the measures and face audits and called on Iraqi authorities to provide assistance.
US financial authorities last week barred 14 Iraqi banks from conducting dollar transactions as part of a wider crackdown on dollar smuggling to Iran via the Iraqi banking system, Iraqi central bank officials have said.
US State Department deputy spokesperson Vedant Patel said the measures were not sanctions, as they have been referred to by Iraq’s Central Bank governor.
Patel said the Treasury Department and Federal Reserve Bank of New York earlier this month removed the banks’ access to the Central Bank of Iraq’s foreign currency sale window, which he said are known as the dollar and wire auctions.
“These actions help limit the ability of bad actors seeking to launder US dollars, profit from the exploitation of money owned by the Iraqi people, and evade US sanctions,” Patel said on Thursday.
The US Treasury Department and the New York Fed have not responded to requests for comment.
Iraqi central bank (CBI) Governor Ali al-Allaq said on Wednesday the institution was following up on the issue and he had no indication the US would impose “sanctions” on more Iraqi banks.
He also noted that other banks were able to cover the market’s needs for dollar transactions, with the 14 targeted banks representing just 8% of external transfers.
The 14 banks have been banned from undertaking dollar transactions but can continue to use Iraqi dinars and other foreign currencies.
Allaq said the transactions that led to the US curbs took place in 2022, before the CBI enforced tighter regulations on dollar transfers requiring applicants to go through an online platform and provide detailed information on end-recipients.
Those measures are in line with US regulations aimed at curbing the illegal siphoning of dollars to Iran and applying pressure on Tehran along with US sanctions imposed over its nuclear program and other disputes.
Haider al-Shamma, speaking on behalf of the 14 banks, said on Wednesday the sanctions could further weaken Iraq’s currency, which has fallen from under 1,500 dinars per US dollar last week to 1,580 as of Wednesday.
Iraq’s central bank says the dinar’s depreciation is tied to merchants, including some undertaking illegitimate financial transactions, sourcing currency from the black market rather than the official platform.
The latest US measures, along with previous curbs on eight banks, have left nearly a third of Iraq’s 72 banks blacklisted, two Iraqi central bank officials said.
“Forcing sanctions on a third of the Iraqi private banks from conducting dollar transactions will have negative consequences not only on the value of the Iraqi dinar against the US dollar, but it will have a very big impact on foreign investments,” al-Shamma said during a news conference on Wednesday.
“Our banks have nothing to do with political tensions, but are independent financial institutions.”
The Human Resources Development Fund (HADAF) in Saudi Arabia spent more than $1.2 billion to support training and empowerment in the labor market during the first half of this year.
The Fund provides subsidies for the rehabilitation, training, and employment of the national workforce in the private and non-profit sectors and provides a percentage of the employee’s wages.
On Thursday, the Minister of Human Resources and Social Development and HADAF Chairman, Ahmed al-Rajhi, revealed the Fund’s contribution during the first half of this year in supporting the employment of 201,000 male and female citizens to work in the private sector.
The Fund also provided services to more than 79,000 establishments.
The Director General of HADAF, Turki al-Jawini, asserted that the Fund would continue its efforts to support the development of national human capital, ensure employment sustainability, stimulate the private sector to increase Saudization and empower citizens in various fields of the labor market.
The Fund supported the employment of 96,000 male and female citizens in private sector establishments during the first quarter of 2023.
Through its various programs, initiatives, and products, HADAF achieved a 26 percent increase compared to the same period last year, which saw the support of 76,000 young men and women.
At the time, the general manager highlighted the government’s support in developing human capital, sustaining employment, and stimulating the private sector to contribute to Saudization.
He touched on strengthening the Fund’s partnership with all relevant authorities in training, employing, and empowering national cadres and increasing their competitiveness in the labor market.
The Fund’s new strategy has increased the number of beneficiaries of programs, services, and products both at the level of individuals and private sector establishments.
During the first three months of 2023, 836,000 male and female citizens benefited from empowerment, counseling, and training services, with a growth rate of 29 percent compared to 646,000 beneficiaries for the same period in 2022.
The Arab Investment and Export Credit Guarantee Corporation (Dhaman) said on Thursday that foreign direct investment (FDI) projects to the Arab region increased 74 percent in 2022.
Kuwait-based Dhaman issued its 38th Annual Investment Climate Report for Arab Countries in 2023 and reported that FDI projects entering Arab countries in 2022 totaled 1,617 with a rise in investment cost of 358 percent, reaching $200 billion.
Dhaman’s Director General Abdullah al-Sabeeh said that overall changes to the international indicators for Arab countries have positively impacted several FDI projects entering the region and their investment costs, adding that the strong performance will continue in 2023.
He said foreign projects entering the region increased 28 percent, and investment costs rose 70 percent, reaching $74 billion in the first quarter of 2023 compared to the same period in 2022.
FDI projects are mainly concentrated in Egypt, accounting for 53 percent of total investment cost, and in the UAE, accounting for 57 percent.
The report added that the cumulative value of these projects in the region over the past 20 years totaled $1.5 trillion, comprising over 16,000 projects that have created more than two million jobs.
Sabeeh explained that the number of intra-Arab investment projects increased 84 percent to 245 projects in 2022, and the cost of these projects increased by 623 percent to $45.6 billion during the same year.
He stressed that the cumulative volume of the secured operations amounted to about $27 billion by the end of June 2023, highlighting that these efforts improve the investment climate in the Arab countries and encourage Arab exports to various countries.
Sabeeh asserted that regional states must execute comprehensive plans to improve the investment climate with its political, economic, regulatory, and production components, especially with the increased competition to attract FDI amid the current political and economic developments.
Kuwait’s Oil Minister Saad Al Barrak told Sky News Arabia on Thursday his country will start drilling and begin production at the Durra gas field without waiting for border demarcation with Iran.
On July 3, Al Barrak, stated that Kuwait categorically rejects the Iranian claims and actions regarding the Durra oil field in the Gulf.
According to the Kuwaiti News Agency, Al Barrak emphasized that the Durra oil field boasts natural wealth that belongs to Kuwait and Saudi Arabia, and no other party has any rights to it until the maritime boundaries are demarcated.
“We were surprised by the Iranian claims and intentions regarding the Durra oil field, which contradict the most basic principles of international relations,” he stressed.
The Kuwaiti Foreign Ministry had declared that the maritime region containing the Durra oil field is situated within the territorial waters of Kuwait.
The natural resources in this area are jointly shared between Kuwait and Saudi Arabia, and they alone possess exclusive rights to the natural wealth in Durra.
On July 4, a reliable source at the Saudi Ministry of Foreign Affairs reaffirmed in a statement to the Saudi Press Agency that the ownership of natural resources in the demarcated submerged area, including the entire Durra oil field, is a shared solely between the Kingdom and Kuwait.
Both countries have full sovereign rights to exploit the resources in that area.
Saudi Arabia reiterated its previous calls to Iran to commence negotiations on demarcating the eastern boundary of the demarcated submerged area between the Kingdom and Kuwait as a single negotiating party, according to international law.
On March 21, Saudi Arabia and Kuwait signed an agreement for the development of the Durra field to produce one billion standard cubic feet of natural gas and 84,000 barrels of condensates daily, which will be shared between the two neighbors.
Saudi Arabia has resumed its process of raising the repurchase agreement rate, “repo”, by 25 basis points to 6%, and increasing the reverse repurchase agreement rate by 25 basis points to 5.50%.
The move is part of the Kingdom’s efforts to reduce inflation, which currently stands at a relatively low and non-alarming level of 2.7%.
The decision by the Saudi Central Bank (SAMA) follows the approval by the US Federal Reserve on Wednesday to raise interest rates by 25 basis points, aligning with its objectives to maintain monetary stability.
SAMA had kept interest rates unchanged in June, in line with the US central bank’s decision to pause its perceived opportunistic increase, allowing investors to take a breather and inject more investments into the local market.
Speaking to Asharq Al-Awsat, experts said the decision aids in transforming investments from quantitative to qualitative, as cautious funds migrate towards central banks.
They believe it contributes to monetary stability amidst the ongoing surge in global inflation, which consequently affects Saudi Arabia. The Kingdom has taken all necessary measures to curb the rise in inflation.
Saudi Shura Council member Fadel al-Buainain told Asharq Al-Awsat that interest rates are among the most crucial tools for controlling inflation or stimulating the economy, depending on economic variables and demands.
He emphasized that controlling interest rates will not achieve the desired goals unless there is harmony between fiscal and monetary policies, and a synchronization of their tools to achieve strategic objectives.
In al-Buainain’s view, what the US economy needs may not be the same for economies tied to the dollar, including Saudi Arabia and the Gulf countries. Nevertheless, they find themselves obliged to mirror the Federal Reserve’s actions to maintain monetary stability.
He explained that Gulf countries are not experiencing high inflation rates; in fact, they have some of the lowest. He stressed that inflation in Saudi Arabia remains at a relatively low and non-alarming level, while the economy requires stimulation to sustain growth.
Al-Buainain said that raising interest rates leads to a slowdown in economic growth and may negatively impact certain sectors and projects due to increased financing costs, especially in the real estate sector, which heavily relies on borrowing.
Turkish President Recep Tayyip Erdogan named three deputy governors to the central bank, the country’s official gazette said on Friday, a day after the bank vowed to continue gradual monetary tightening and raised its end-2023 inflation forecast.
Osman Cevdet Akcay, Fatih Karahan and Hatice Karahan were appointed as deputy central bank governors, replacing three predecessors, the statement showed.
Fatih Karahan, who held economist positions in the Federal Reserve Bank of New York for almost a decade, most recently worked for Amazon as a principal economist, according to his LinkedIn profile.
Akcay is an economist who used to work at Turkish lender Yapi Kredi and Hatice Karahan is an academic and a chief economic adviser to the president.
Tim Ash, a strategist at BlueBay Asset Management, said the appointment of the three represented a “180-degree turn” by Erdogan as they replaced less orthodox thinkers.
“Cevdet is a superb economist and clear thinker. Hatice is excellent as well – a rational, orthodox thinker. Fatih Karahan, ex-NY Fed. Superb hires,” Ash said.
The lira stood at 26.9560 against the dollar on Friday morning, unchanged from Thursday’s closing level. It has lost 30% of its value this year.
Inflation forecast surges
The appointments came after the central bank, under new Governor Hafize Gaye Erkan, reversed course and tightened policy in the last two months following years of rate cuts and a simmering cost-of-living crisis.
On Thursday, Türkiye’s central bank raised its end-2023 inflation forecast sharply to 58% and said it would continue monetary tightening. Annual inflation stood at 38.2% in June.
In what was seen as a pivot to economic orthodoxy, Erdogan appointed Mehmet Simsek as finance minister and Erkan as central bank governor after his re-election in May. Erdogan holds the unorthodox view that high interest rates cause inflation.
Since Erkan’s appointment, the central bank has hiked its policy rate by 900 basis points to 17.5% in two meetings, but the pace of tightening has remained below market expectations.
Erkan pitched a comprehensive monetary policy in her first formal address to the media on Thursday while her acknowledgment of stark inflation pressures was welcomed by foreign investors.
Economists expect the policy rate to rise further to 25% by year-end, still leaving real rates negative. They warn that Erdogan’s influence over the central bank limits how far it can go in tightening policy.
Erdogan removed the previous deputy governors Emrah Sener, Taha Cakmak and Mustafa Duman, Friday’s statement said.
The Public Investment Fund (PIF) announced on Thursday the establishment of the Saudi Tourism Investment Company (Asfar) to support the growth of the country’s tourism sector.
The company will invest in new tourism projects and develop attractive destinations with hospitality, tourist attractions, retail, and food and beverage offerings in cities across Saudi Arabia, in addition to investing in the local tourism value chain.
Asfar will enable the private sector through co-investment opportunities and by creating an attractive environment for local suppliers, contractors, and small and medium-sized enterprises (SMEs) to develop tourism projects and destinations, thereby creating a competitive environment that will enhance the variety and quality of the hospitality and tourism offering.
The company will leverage Saudi Arabia’s unique strategic location between the three continents of Asia, Africa and Europe as well as the competitive advantages of its cities. It will seek to benefit from the natural beauty and diversity of Saudi Arabia’s terrain and culture to further enhance tourism experiences in the country. This will attract domestic and international tourists to a large number of untapped destinations across the country and contribute to the national target of attracting 100 million visitors per year by 2030.
“Asfar will activate the role that Saudi Arabia’s cities play in supporting the national economy. It will enable each city to make the most of its unique tourism offering, further diversifying and enriching the tourism and entertainment experience in Saudi Arabia,” said head of Entertainment, Leisure and Sports sector in MENA Investments at PIF Mishary Alibraheem.
“PIF tourism projects and companies are working side by side, supporting and strengthening the tourism ecosystem. The creation of the company is in line with PIF’s strategy to create opportunities in the tourism sector and reinforce strategic partnership opportunities with the private sector, creating jobs and diversifying sources of income for the local economy in line with Saudi Vision 2030.”
PIF owns several strategic companies that aim to invest and develop tourism destinations across Saudi Arabia, including Aseer Investment Company (“AIC”), which aims to transform Aseer into a year-round tourism destination, as well as Saudi Downtown Company (“SDC”), mandated to build and develop downtown areas within Saudi Arabia.
The launch of Asfar is in line with PIF’s strategy to unlock opportunities in the tourism sector and reinforce strategic partnership opportunities with the private sector, creating jobs and diversifying sources of income for the local economy in line with Saudi Vision 2030.
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Türkiye has raised the euro-lira conversion rate for medicine prices by 30.5% to 14.0387 lira per euro, the country’s Official Gazette showed on Sunday.