Riyadh, Moscow seek closer currency, trade links

Tariq Abdel Hadi Al-Qahtani, chairman of the Saudi-Russian Business Council.
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Updated 21 June 2021

Riyadh, Moscow seek closer currency, trade links

  • Saudi exports to Russia represent just 2.5 percent of the volume of trade between the two countries

RIYADH: Tariq Abdel Hadi Al-Qahtani, chairman of the Saudi-Russian Business Council (SRBC), has stressed the importance of conducting transactions in Russian rubles and Saudi riyals as part of efforts to strengthen the currencies of both countries and encourage increased bilateral trade.

Al-Qahtani, who headed last week’s SRBC meeting in Riyadh, also said they had come a long way in resolving the visa issue between the countries and there would be news on this soon.

Al-Qahtani, who is also chairman of the Saudi Gulf Airlines board of directors, said the two sides discussed ways to support air freight and maritime transport between the two states, “to enhance logistics services and facilitate import and export operations, especially facilitating the Saudi exports to Russia,” since there is no direct shipping route between the two countries.

Saudi-Russian relations have been developing considerably, especially economically, which has contributed to enhancing bilateral trade and investment cooperation, which reached SR5.5 billion ($1.47 billion) in 2018, a growth of 43 percent compared to the previous year.

Saudi exports to Russia represent just 2.5 percent of the volume of trade between the two countries. However, Al-Qahtani noted that the volume of Saudi-Russian trade did not fully reflect the importance of the economic links between the two countries, adding that “Saudi products are highly competitive and have penetrated more than 140 markets around the world.”

Al-Qahtani stressed the council aims to increase the volume of bilateral trade to a more satisfactory figure for both sides.


• Bilateral trade and investment between the two countries reached $1.47 billion in 2018.

• The Council of Saudi Chambers submitted a proposal to open a Russian bank in Riyadh.

• Using Russian and Saudi currencies in transactions also under study.

He said that one of the most promising sectors that both sides will work on through the SRBC is holding exhibitions of Saudi and Russian produce and introducing commodities from both countries.

He pointed out that the Kingdom boasts many efficient Saudi companies across various fields, adding that the Saudi business community looks “forward to more discussions and cooperation with Russian businessmen in a way that benefits both parties.”

The Council of Saudi Chambers submitted a proposal to open a Russian bank in Riyadh in a step aimed at facilitating commercial and economic trade between the two countries, a move which was supported by Russian diplomats.

Ajlan Al-Ajlan, chairman of the Saudi Chambers of Commerce, added that this would be a big step forward in developing further commercial and economic relations between the two countries.

Russian Ambassador Sergey G. Kozlov said his country views the development of trade relations between the two nations as an essential step forward.

In a statement that coincided with the recent meeting of the council, Kozlov noted that King Salman’s “historic” visit to Russia and the visit of Russian President Vladimir Putin to Riyadh paved the way for a strong and strategic partnership.

He said that the appointment of a commercial attaché at the Russian Embassy in Riyadh is a new step in overcoming all economic obstacles facing Saudi businessmen.

The council stressed the need to lay down a roadmap for developing economic cooperation between the two states, focusing on developing trade and investment agreements, opening direct flights, facilitating the issuance of visas and increasing cooperation in targeted sectors, including the agricultural sector.


Cryptocurrencies look up despite regulatory issues

Updated 5 min 32 sec ago

Cryptocurrencies look up despite regulatory issues

RIYADH, DUBAI: While regulatory issues continue to chase cryptocurrencies, their stock saw a rise on Wednesday with Bitcoin trading higher by 1.28 percent to $39,037.94 at 5 p.m. Riyadh time.

Ether, the second most traded cryptocurrency, traded at $2,609.22, up 3.56 percent, according to data from Coindesk.

The pressure on the digital currency continues, as HSBC became the latest lender to have suspended payments to cyrptocurrency exchange platform Binance in the UK.

“We have made this decision due to concerns about the possible risks to you,” the bank said in a statement, where it cited a consumer warning by the country’s financial regulator.

Regulators in Malaysia, Japan, Hong Kong, Thailand, and Germany have previously issued warnings against Binance.

HSBC earlier said it was not planning to launch a crypto trading desk or offer digital coins as an investment, describing these assets as “volatile” and lacking of transparency.

But Wells Fargo, one of the largest wealth managers in the US, has a different stance on cryptocurrency, as it recently launched crypto investment offerings to its clients.

This was confirmed to Business Insider by the company’s spokesperson, Bitcoin.com has reported.

Also in the US, NCR Corp., a global leader in ATM software applications, said it was acquiring Libertyx, an American crypto company that claims to be the US “first and largest network of bitcoin ATMs, cashiers, and kiosks.”

In Argentina, two blockchain-based digital identity projects are being developed, according to a report by Bitcoin.com.

One of the projects is aimed at improving government-citizen relationships in Misiones, and the other seeks to promote financial inclusion in the Gran Chaco region. They are being organized by Project Didi, which financed by the Inter-American Development Bank.

Saudi property market adapts to new tax

Updated 11 min 21 sec ago

Saudi property market adapts to new tax

RIYADH: The Saudi Zakat, Tax and Customs Authority registered over 543,000 transactions related to the Real Estate Transaction Tax (RETT) since its implementation in October 2020, the official Saudi Press Agency (SPA) reported.

The highest number of tax transactions was reported in Riyadh with 125,110 followed by Jeddah (55,680), Buraidah (50,462), Makkah (18,955) and Madinah (18,557).

“This gives a positive impression to the property market,” Khaled Almobid, CEO of Riyadh-based Menassat Reality Co. told Arab News.

He said many thought the new tax might contribute to a decline in the demand of property but “the market started to adapt to it,” which is a positive sign for the Kingdom’s real estate sector.

Property deals in Saudi Arabia are exempted from a 15 percent value-added tax (VAT) as the government seeks to support the real estate sector.

Instead a 5 percent tax was introduced last year to boost the economy as it was hit hard by the impact of the coronavirus disease (COVID-19) pandemic and weaker oil prices.

“The buyer used to pay a value-added tax (VAT) of 15 percent, and due to the real estate conditions in the Kingdom, it was turned into a tax paid by the seller, not the buyer, called the real estate transaction tax, and it was reduced to 5 percent,” Almobid said.

Tabby raises $500 million, eyes new GCC markets

Updated 12 min 29 sec ago

Tabby raises $500 million, eyes new GCC markets

RIYADH: Tabby, the leading buy now, pay later (BNPL) provider in Saudi Arabia and the UAE has raised $50 million in a new equity round valuing the company at $300 million.

Global Founders Capital and STV led the funding round, with participation from Delivery Hero and CCVA. Existing investors, including Arbor Ventures, Mubadala Investment Capital, Raed Ventures, Global Ventures, MSA Capital, VentureSouq, Outliers VC, JIMCO, and HOF, also participated.

This comes one month after the firm raised $50 million in debt financing bringing its total funding to over $130 million in less than two years.

The fintech firm’s Series B financing will be used to expand its product portfolio and enter new markets.

The funding will help tabby further service the growing demand for its BNPL products as customer usage continues to soar, especially in Saudi Arabia, the firm’s largest market.

Ahmad Al-Shammari, a partner at STV, said: “As the global BNPL market is expected to grow at 30 percent CAGR over the next five years, we estimate that MENA will grow at least twice as fast, further accelerated by a rapid switch to contactless payments, e-commerce growth, and access to credit.”

Financial technology startups in Saudi Arabia and the UAE offering online short-term credit say they are enjoying exponential growth as the coronavirus pandemic drives a shift in consumer spending online.

BNPL purchasing is relatively new to the region where consumers have traditionally been skeptical of paying for goods before getting them.

But Saudi-based Tamara and UAE’s Spotii, Tabby, and Postpay all say the take-up has far exceeded initial expectations. And investors are paying attention. Tamara recently raised $110 million in debt and equity, a large amount for an early-stage Middle East startup.

“With global players consolidating the MENA BNPL space, we are proud to continue building a local business and work with investors who understand its value. This investment will enable us to deliver the most rewarding and relevant shopping experience for regional consumers and retailers,” said Hosam Arab, CEO, and co-founder of the fintech firm.

This investment marks Delivery Hero’s first fintech investment in MENA. Delivery Hero, which owns and operates several regional food and grocery delivery companies including Talabat, InstaShop, and Hunger Station, has one of the largest customer bases in the Middle East and Africa (MENA) region.

“We are excited to be investing in tabby as our first FinTech investment in MENA, a strategically important region for Delivery Hero. We see great potential in tabby to drive the industry forward and are proud to be supporting the company on its growth journey,” Mark Venema, senior vice president, strategy at Delivery Hero, said.

Inflation in Saudi Arabia likely to decline in coming months

Updated 41 min 11 sec ago

Inflation in Saudi Arabia likely to decline in coming months

  • Credit to private companies will increase, depending on the Saudi economy recovery, says Al-Sudairi

RIYADH: The inflation rate in Saudi Arabia is expected to be 3.2 percent and the rate would decline because of a higher base, Mazen Al-Sudairi, head of research at Al-Rajhi Capital, told Arab News.

The cost of living index of Saudi Arabia remained in the positive trajectory and increased by 6.2 percent year-on-year in June 2021, mainly driven by a rise in value-added tax (VAT) from 5 percent to 15 percent in July 2020, according to Al-Rajhi Capital.

Saudi spending in the local market, especially in the retail, food, and beverages, and health segments continues to support the economy, it added.

Point of sales transactions continued their uptrend, increasing 4.6 percent in June 2021 compared to June of last year, primarily driven by an increase in restaurants and hotels, clothing and footwear, and health segments, Saudi Central Bank (SAMA) data revealed.

Credit to the private sector increased 16.8 percent year-on-year in June, while bank claims on the public sector increased 9.6 percent and the deposits grew by 10.2 percent, the official data showed.

Credit to private companies will increase, depending on the Saudi economy recovery, said Al-Sudairi.

SAMA also pointed out in its latest monthly report that remittances from Saudi nationals increased by 56 percent year-on-year in June 2021, while remittances growth from non-Saudi nationals declined 3.4 percent.

Remittance for Saudis increased due to an increase in travel while for expats the trend remains broadly flat, Al-Sudairi added.

The International Monetary Fund (IMF) said that Saudi Arabia’s economy is recovering well from the pandemic, and the Kingdom opened its doors to vaccinated foreign tourists on Aug.1.

Saudi Arabian youth use less cash as Kingdom pushes for cashless society

Updated 04 August 2021

Saudi Arabian youth use less cash as Kingdom pushes for cashless society

  • Only 18 percent of Saudis aged between 16 and 22 years use cash
  • Almost half of people 60 and above use cash

RIYADH: Youth in Saudi Arabia are using less cash compared to other age groups, a sign that the Kingdom’s plans to create a cashless society is on course.

Only 18 percent of Saudis aged between 16 and 22 years use cash, while almost half of people who are 60 and above use cash till date, a report by Fintech Saudi showed.

The report also showed that 20 percent of the population in central region of Saudi Arabia, which includes the capital Riyadh, use cash in their everyday transactions, while 37 percent of those living in the western region use paper money in their daily dealings.

However, paper currency is far from total demise even as the overall number of transactions carried out using cash have declined. Fintech Saudi’s survey results showed that around 60 percent of individuals Kingdom-wide still rely on paper money at least once a week and one out of four people in Saudi use cash every day.

Under Saudi Vision 2030, the Kingdom aims to increase the number of non-cash transactions to 70 percent in 2025.

“The COVID-19 outbreak has led to an acceleration in cashless activity with digital payments increasing by 75 percent over the past year, whilst cash withdrawals from ATMs and other payment points have declined by 30 percent over the same period,” the report said.