Qatari support ‘will not have major impact on Turkish lira’

Timothy Ash London-based strategist
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Updated 21 May 2020

Qatari support ‘will not have major impact on Turkish lira’

  • Turkey needs additional outside assistance, expert tells Arab News

JEDDAH: Turkey tripled its currency swap agreement with Qatar to $15 billion on the basis of existing currency arrangements in a bid to help steady the Turkish lira on Wednesday.

Turkey has also reportedly been seeking new or expanded swap lines with the US, the UK, China and Japan to forestall a potential currency spiral as the lira reached a record low earlier this month along with a depletion in the Central Bank’s net FX reserves.

However, Turkey has not yet reached an agreement with any of the G20 central banks with which it has been negotiating. Despite Qatar increasing its swap-line limit from $5 billion to $15 billion to enable Turkey to increase its foreign currency reserves, the Turkish economy remains in trouble. 

Timothy Ash, a London-based senior emerging markets strategist at Bluebay Asset Management, said the increase of the swap line from Qatar is unlikely to have a major impact.

“I think Turkey needs additional outside assistance — either G20 swaps or to resort to the International Monetary Fund (IMF). At the moment they are just buying time with the move to hike import tariffs,” he told Arab News.

Experts say that Turkey’s relatively high foreign debt obligations pushed it to diversify its overseas search for external funding rather than approaching the IMF. The ruling Justice and Development Party (AKP) will be keen to avoid having to deal with the IMF, having repeatedly criticized its predecessors for doing so.

Over the past few months, Turkey’s net foreign exchange reserves have fallen to under $10 billion. The current free fall in the lira’s value has only added to the country’s financial woes.

Wolfango Piccoli, co-president, political risk advisory at London-based Teneo, says that the $10 billion increase in its swap lines with Qatar only buys Turkey a little more time.

“These are the usual tricks that show the officials remain in denial,” he told Arab News. “It shows how reluctant policymakers are to face reality.”

UAE dives into Lake Manzala project

Updated 21 September 2020

UAE dives into Lake Manzala project

  • Egyptian campaign aims to return the lake to its previous state and revive local fishing industry

CAIRO: The UAE National Marine Dredging Company (NMDC) has announced that it won the rights to the expansion project of Lake Manzala in Egypt, valued at 600 million UAE dirhams ($163 million).

The company’s announcement of the new project came following a disclosure published on the Abu Dhabi Securities Exchange website. It ensures compliance with the principle of disclosure and transparency in force in the UAE.

Lake Manzala is one of Egypt’s largest natural lakes. It is known for its potential fishing opportunities, as it has the basis for high fish stocks due to natural nutrients and a moderate climate throughout the year. It produces about half of the natural fish production in lakes.

The lake has witnessed neglect in recent years, losing much of its importance and wealth. In May 2017 Egyptian President Abdel Fattah El-Sisi launched a national project to develop Egyptian lakes, with a key focus on Lake Manzala.

NMDC said in a statement that winning the project came through its partnership with the Egyptian-Emirati Challenge Company. It said that it will take about two years to implement the project.

NMDC is one of the leading companies in the field of dredging, land reclamation and civil and marine construction in the Middle East. The Lake Manzala development project aims to improve the quality of water to restore free fishing and return the lake to its previous state, which will boost the local market and export output.

President El-Sisi said that Lake Manzala will contribute to enhancing Egypt’s fishing industry, and export operations will be activated after its full development. He directed the border governorates, in coordination with the Ministry of Interior and the Armed Forces, to remove all encroachments and criminal outposts on the lake.

Several days ago, Dakahlia governorate completed a difficult operation to remove encroachments on the lake. A large campaign that used Armed Forces Engineering Authority equipment removed 301 houses in the Abdo El-Salhy area in El-Matareya city, known as the “fishermen’s land,” which was built on areas that were filled in from the lake. The operation occurred after local fishermen were persuaded to obtain compensation for vacating their houses.

Magdy Zaher, executive director of Manzala Lake, said that the engineering authority used 320 excavators and 20 imported suction dredgers to work in the lake.

The authority dredged the upper islands isolated from the water with the help of an Emirati bulldozing company to increase the efficiency and purification of Lake Manzala.

Zaher said the lake project will require several steps.

The most important is the removal of encroachments on the water surface and doubling its area to 250,000 feddans, he said. Dredging and deepening the lake, opening the gates and extending the radial channels to allow Mediterranean waters to enter the lake will follow, he added.

A safety belt will come in the form of a road 80 km long and 30 meters wide, which will surround the lake and prevent future encroachments. It will also divert the course of the Bahr El-Baqar water treatment plant, which pours 12 million cubic meters of sanitary, industrial and agricultural drainage into the lake, Zaher said.