North Africa/Middle East

Saudi Arabia announced a spending boost that will sharply narrow next year’s budget surplus as it looks to tackle the impact of inflation and use its oil windfall to accelerate the development of economic diversification projects, Bloomberg News reported. The kingdom’s Finance Ministry said in a preliminary budget statement on Friday that it expects a surplus of 9 billion riyals ($2.4 billion) next year, or 0.2% of gross domestic product -- smaller than an earlier estimate of 27 billion riyals.
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The Central Bank of Bahrain said on Wednesday it raised its key policy interest rate on its one-week deposit facility by 75 basis points (bps) to 4%, moving in parallel with the U.S. Federal Reserve's hike as the Bahraini dinar is pegged to the dollar, Reuters reported. CBB also hiked by 75 bps the overnight deposit rate to 3.75%, the four-week deposit rate to 4.75% and the lending rate to 5.25%. Read more.
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Qatar's central bank said on Wednesday it will raise its interest rates by 75 basis points as of Thursday, moving in parallel with the U.S. Federal Reserve's third straight hike of that size, Reuters reported. The central bank increased its lending rate to 4.5%, the deposit rate to 3.75% and the repo rate to 4.0%, the central bank said in a statement. Read more.
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An insurance company that was ordered to pay more than a billion dirhams in damages for a 2015 New Year’s Eve fire in Dubai has lost a civil lawsuit that it filed to try and recover the money, the Associated Press reported. Two years after the massive fire rocked the Address Downtown hotel, Orient Insurance was ordered to pay Dubai’s state-backed developer Emaar 1.25 billion dirhams (more than $340 million) in a settlement. Emaar is behind projects like the world’s tallest skyscraper, the Burj Khalifa.
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Tunisia expects to reach a deal with the International Monetary Fund in coming weeks on a loan of between $2 billion and $4 billion over three years, the central bank governor said on Sunday, Reuters reported. Tunisia, which is suffering its worst financial crisis, is seeking to secure an IMF loan to save public finances from collapse. "The size is still under negotiation and I think it will be between $2 billion and $4 billion, we hope to reach a staff level deal in coming weeks," Marouan Abassi told Reuters.
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The International Monetary Fund said on Thursday that a staff mission will visit Lebanon next week to discuss ways to "speed up" implementation of agreed reforms required for an IMF loan program amid deteriorating living conditions in the country, Reuters reported. "We are looking to support Lebanon as strongly as we can. It's a difficult situation," IMF spokesman Gerry Rice told a regular news briefing.
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Saudi Arabia and other Gulf states flush with oil revenue are coming to the rescue of crisis-racked neighbors such as Egypt, Pakistan and Turkey, doubling down on a diplomatic tool they long used to build influence throughout the region, the Wall Street Journal reported. Saudi Arabia, Qatar and the United Arab Emirates have pledged more than $22 billion this year to Egypt as the country seeks to stave off default.
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El Al Israel Airlines plans to repay a $45 million loan that it took from the government during the COVID-19 pandemic by the end of the year, under a deal reached between the airline and Finance Ministry, they said on Sunday, Reuters reported. The loan was part of a government package to help the airline weather the crisis, in which Israel's borders were closed to foreign tourists for nearly two years, sending revenue and profit at Israel's flag carrier tumbling.
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Inflation in urban parts of Egypt accelerated to its fastest level since November 2018 on the back of higher food costs, Reuters reported. Consumer prices climbed 14.6% from a year earlier in August, versus 13.6% the previous month, the state-run statistics agency CAPMAS said Thursday. Food and beverage costs, which make up the largest single component of the inflation basket, jumped 23.1%. On a monthly basis, price growth slowed to 0.9% from 1.3% in July.
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The Bank of Israel raised its benchmark interest rate on Monday by three-quarters of a percentage point, its biggest hike in two decades, and appeared on track for further increases as it tries to rein in inflation that has topped 5%, Reuters reported. The central bank lifted its key rate to 2.0% from 1.25%, continuing a tightening cycle that began in April when policymakers first raised the rate from 0.1%, an all-time low set at the outset of the COVID-19 pandemic.
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