North Africa/Middle East

India and the United Arab Emirates signed a broad trade and investment pact on Friday that will eventually cut all tariffs on each other's goods and aims to increase annual trade between the two nations to $100 billion within five years, Reuters reported. The virtual signing ceremony marks the first trade deal sealed by the Gulf state since it began pursuing such pacts last September in a bid to strengthen its status as a business hub.
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Sharp declines in financial asset prices, higher inflation and a new significant wave COVID-19 infections pose the greatest risks to the global economy, the Bank of Israel said on Monday in its twice yearly financial stability report, Reuters reported. And although Israeli banks and insurance companies maintained stability in the second half of 2021 with strong capital ratios, that could be derailed should financial asset prices fall further, the report said. Israeli stock prices have dipped 1.1% so far this year, on the heels of global declines, after a 31% rise in 2021.
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The International Monetary Fund said on Friday it would remain "closely engaged" with Lebanon's authorities to help the crisis-ravaged country formulate an economic reform programme, Reuters reported. Lebanon's financial system unravelled in late 2019 under the weight of huge public debts, slicing more than 90% off the local currency's value and plunging a majority of the population into poverty.
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The International Monetary Fund will hold a virtual visit with Tunisian officials on Feb. 14 to discuss the government's economic reform program, a central bank official told Reuters on Wednesday. The North African country, which is suffering from a financial crisis, is seeking to obtain a rescue package from the fund in exchange for unpopular reforms, including spending cuts. The government says the country requires the rescue package to avert a collapse in public finances. Some public sector salaries for December were paid late in January.
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Qatar’s government has approached international banks to explore refinancing more than $10 billion in debt that comes due next year, Reuters reported. Officials at the Ministry of Finance are in early talks with international banks for a potential syndicated loan or bond sale. No final decision has been made, the people said. The government may decide to refinance part of the debt or even shelve the plan since the country has financial flexibility, they said. A spokesperson for Qatar’s Ministry of Finance said that the government didn’t have immediate plans to refinance debt.
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Egypt left one of the world’s top inflation-adjusted interest rates unchanged, even as the U.S. Federal Reserve began the countdown to an expected burst of monetary tightening, Bloomberg News reported. The central bank held the benchmark deposit rate at 8.25% and the lending rate at 9.25%, the Monetary Policy Committee said Thursday in a statement. All 9 economists surveyed by Bloomberg predicted what’s Egypt’s 10th consecutive hold, even as expectations build for the first hike since 2017 later this year. Fed Chairman Jerome Powell hasn’t ruled out U.S.
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Tunisia hopes to reach a crucial deal with the International Monetary Fund in April, the finance minister said Wednesday, rejecting speculation that the nation faces imminent bankruptcy, Bloomberg News reported. “The situation is difficult,” Sihem Boughdiri Nemsia said in an interview with broadcaster Shems FM. “Authorities are trying to stabilize the economy,” she said. Concerns over insolvency are however “alarmist,” and authorities can afford to pay public-sector wages for the coming months.
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A government plan for tackling Lebanon's financial crisis projects a 93% devaluation of the Lebanese pound and converts the bulk of hard currency deposits in the banking system to local currency, according to a blueprint seen by Reuters. Of $104 billion of hard currency deposits, the plan foresees returning just $25 billion to savers in U.S. dollars, with most of what's left converted to pounds at several exchange rates, including one that would wipe 75% off some deposits. The plan sets a 15-year timeframe for paying back all depositors.
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Some Turkish manufacturing companies have halted production temporarily after Iran cut gas flows last week for up to 10 days due to a technical problem, Reuters reported. Companies affected include car parts maker Ege Endustri , cardboard manufacturer Kartonsan and defence and automotive parts maker Katmerciler. Turkey is almost fully dependent on imported gas from Russia, Azerbaijan and Iran, which suspended gas flows to the country last Thursday, saying there was a technical fault at a pressure-boosting station in Turkey.
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The United Arab Emirates and Turkey agreed to a currency swap equivalent to nearly $5 billion that reinforces an economic partnership between two Middle Eastern rivals and provides Ankara with a badly needed infusion of foreign funds, the Wall Street Journal reported. The deal, announced Wednesday, deepens the detente between Turkey and the U.A.E., powers that until recently were on opposite sides of a Middle Eastern cold war and remain at odds over conflicts in the region.
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