North Africa/Middle East

Egypt’s central bank surprised most economists by leaving interest rates unchanged on Thursday, saying it can do little about external shocks to prices a month after delivering its biggest hike in nearly half a decade, Bloomberg News reported. The Monetary Policy Committee maintained the deposit rate at 11.25% and the lending rate at 12.25%, a decision predicted by only three of 13 analysts surveyed by Bloomberg. While its move in May was more hawkish than expected, the central bank now appears content to wait out what it called “transitory deviations” of inflation from target.

Lebanese Prime Minister Najib Mikati won the support of more than 50 legislators Thursday to keep his post following last month’s parliamentary elections as the country’s multiple crises deepen with no solution in sight, the Associated Press reported. After a day of binding consultations between President Michel Aoun and parliamentary blocs, Mikati was named by 54 lawmakers while his main rival for the post got less than half that figure. Forty-six legislators abstained from naming anyone.

The future of Dubai-based crypto hedge fund Three Arrows Capital hangs in the balance as the firm faces potential insolvency after being liquidated by its lenders, The Block reported. According to well-placed sources, the investment firm — which counts the likes of options exchange Deribit and financial services firm BlockFi among its venture bets — is in the process of figuring out how to repay lenders and other counter-parties after it was liquidated by top tier lending firms in the space.

Saudi Arabia, the world's top oil exporter, raised July crude oil prices for Asian buyers to higher-than-expected levels amid concerns about tight supply and expectations of strong demand in summer, Reuters reported. The official selling price (OSP) for July-loading Arab Light to Asia was hiked by $2.1 a barrel from June to $6.5 a barrel over Oman/Dubai quotes, just off an all-time-high recorded in May. That was much higher than most market forecasts for an increase around $1.5. Only one respondent of six in a Reuters poll had predicted a jump of $2.

The group of oil-producing nations known as OPEC Plus agreed on Thursday to a larger increase in supply than planned for July and August, the New York Times reported. After a videoconference, the group said it would raise production by 648,000 barrels a day, an increase of about 50 percent over the 430,000 barrels a day agreed under a program last year. Essentially, producers are compressing three months of planned increases into two months. The group suggested in a news release that it was responding to a reopening from lockdowns in countries like China.

A leading international credit ratings agency warned Friday that the results of this month’s parliamentary elections in Lebanon make it difficult for any coalition to have a governing majority, potentially complicating implementation of reforms, the Associated Press reported. Shortly after the warning from Fitch Ratings, the Lebanese pound briefly hit new lows against the dollar, causing chaos in markets around the country. Lebanon is in the grips of the worst economic and financial crisis in its modern history.

Lebanon’s currency hit a new low Tuesday as deep divisions within the newly elected parliament raised concerns that political paralysis could further exacerbate one of the worst economic meltdowns in history, the Associated Press reported. The legislature elected May 15 showed no clear majority for any group and a fragmented and polarized parliament divided between pro- and anti-Hezbollah lawmakers. The sides will likely find it difficult to work together to form a new government and enact desperately needed reforms. Among those elected to the 128-member parliament were 13 independents.

Lebanon's government foresees cancelling "a large part" of the Central Bank's foreign currency obligations to commercial banks and dissolving non-viable banks by November, according to a financial recovery plan passed by the cabinet on Friday, Reuters reported. The document, seen by Reuters and verified as accurate by a minister, was passed by cabinet in its final session hours before losing decision-making powers, following the election of a new parliament on May 15.

Egypt surprised most economists by delivering its biggest interest-rate hike in nearly half a decade, an attempt to tackle soaring inflation and restore the allure of its local debt with foreign investors, Bloomberg News reported. The central bank increased the deposit and lending rates by 200 basis points each to 11.25% and 12.25% respectively, the Monetary Policy Committee said Thursday in a statement. Only one economist in a survey of nine correctly predicted the decision, with most forecasting an increase of 100 basis points.

The United Arab Emirates will introduce a form of unemployment insurance, the cabinet said on Monday, the latest reform by the Gulf country as it strives to attract talent and investment amid increasing regional economic competition, Reuters reported. Insured workers would receive some money for a limited time period if made unemployed, UAE Prime Minister and Vice-President Sheikh Mohammed bin Rashid al-Maktoum, who is also the ruler of trade hub Dubai, said on Twitter, citing a cabinet decision.