MUMBAI/NEW DELHI: The Indian rupee fell abruptly on Thursday after a television channel reported that the Commerce Ministry will propose a devaluation in the unit to promote dwindling exports, but trimmed losses after a finance ministry denial.
The rupee weakened 0.28 percent to 67.0750 to the dollar before paring losses after the central bank stepped in to prevent a sharp fall. At 0540 GMT, it was trading at 66.9550, lower than Wednesday's close of 66.8875/8975.
The Finance Ministry denied that the government was discussing a possible devaluation of the rupee, whose floating exchange rate is managed by the Reserve Bank of India.
There was no truth to reports of a rupee devaluation, Shaktikanta Das, economic affairs secretary at the Finance Ministry was quoted by financial newswire Newsrise, a partner of Reuters, as saying.
Das also said the rupee's value was determined by the market and that there was no plan to change policy on the currency's valuation.
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India's Commerce Ministry is responsible for trade policy but not for exchange rate policy, which is the domain of the RBI. The central bank does, however, consult with the Finance Ministry on its exchange rate policy.
Commerce Minister Nirmala Sitharaman also tweeted saying she had not told a reporter the government was discussing a devaluation but did not deny whether the ministry was mulling such a proposal to the government.
Sitharaman, who does not hold cabinet rank and is not widely recognized as a policy authority outside her area of responsibility, recently called on the RBI to cut interest rates by two percentage points.
Those remarks came at a sensitive time, as the RBI is under a new chief, former Deputy Gov. Urjit Patel, and a key new body — a six-member Monetary Policy Committee — has yet to be appointed.
Three of the MPC's members would be "external" candidates. A replacement as deputy governor has yet to be chosen, and it is possible Patel could find himself heading a panel with dovish leanings.
Government officials say the MPC, in which the RBI governor has the casting vote in the event of a tie, should be staffed up in time for Patel's first policy meeting on Oct. 4.
A drop in inflation last month to just over 5 percent — in line with the RBI's near-term target — has opened the door to a possible rate cut next month or in December, say economists.
The Indian rupee has been one of worst performers in Asia so far this year on subdued dollar inflows and persistent RBI intervention to bolster forex reserves.
Thursday's sudden fall in the rupee triggered the central bank to call forex dealers to check on their positions, reported Newsrise agency.
India's export lobby has called loudly for lower interest rates and a weaker rupee to restore the international competitiveness of Asia's third-largest economy, whose growth continues to run at just over 7 percent but has been dented by poor export performance.
However, the RBI has been quite adamant it won't follow such a policy, instead letting market forces decide the currency movement and only intervening to contain any sharp volatility.
Indian rupee falls on devaluation report
Indian rupee falls on devaluation report
Saudi Arabia’s date sector sees 13.7% export growth in Q1, 2024
RIYADH: Saudi Arabia’s palm and dates sector is experiencing significant growth, with exports increasing by 13.7 percent in the first quarter of 2024 compared to the same period last year.
This food division is regarded as a significant contributor to diversifying income sources and boosting the gross domestic product, as the Kingdom has ambitions to establish its dates as the premier choice globally.
The National Center for Palm and Dates has recently revealed a significant increase in value across various countries during the period, reaching SR644 million ($171.7 million), compared to SR566 million in the first quarter of 2023.
In 2023, the value reported by NCPD increased by 14 percent, reaching SR1.462 billion, compared to SR1.280 billion in 2022. By the end of 2023, the number of countries importing Saudi dates had reached 119.
In an interview with Arab News in March, Mohammed Al-Nuwairan, CEO of NCPD, emphasized that Saudi Arabia’s export portfolio extends beyond dates, encompassing derivatives like molasses, pastes, and others. This diversification enhances the sector’s export presence beyond the Kingdom’s borders.
“East Asian countries are receiving attention from Saudi exports of dates, especially to Singapore, situated in the heart of countries targeted for exporting dates and their derivatives, such as Indonesia, Malaysia, and also China in particular. What supports this is the high demand for Saudi dates, which possess high nutritional values and production quality,” he said at that time.
The total value of date and date by-product exports has surged by 152.5 percent since 2016, rising from SR579 million in 2016 to SR1.462 billion in 2023, marking a compound annual growth rate of 12.3 percent.
According to the Saudi Press Agency, date exports to several countries, including Austria, Norway, and Argentina, as well as Brazil, Portugal, Germany and Canada, exceeded 100 percent.
According to the Saudi Press Agency, date exports to several countries, including Austria, Norway, and Argentina, as well as Brazil, Portugal, Germany, and Canada, exceeded 100 percent.
Additionally, the value of Saudi date exports increased to Morocco by 69 percent, Indonesia by 61 percent, and South Korea by 41 percent. Exports to the UK, the US, and Malaysia rose by 33 percent, 29 percent, and 16 percent, respectively.
Saudi NHC teams up with Chinese firm to construct 20k residential units
RIYADH: Residential supply is set to improve as the Saudi National Housing Co. and China Machinery Engineering Corp. signed a deal to build 20,000 units in the Kingdom.
In a recent agreement signed in Beijing, the two companies joined forces to address housing needs more effectively by constructing apartments in suburban and residential areas within the Kingdom, directly benefiting individuals and families, the Saudi Press Agency reported.
The deal was signed during the official visit of the Minister of Municipal and Rural Affairs and Housing and the Chairman of the Housing Program Committee, Majid Al-Hogail, to China as part of the broader efforts to contribute to achieving the targets of the Housing Program — one of the Kingdom’s Vision 2030 programs.
This initiative aims to partner with leading global companies and attract international investments in the real estate sector.
At the signing ceremony, CEO Mohammed Al-Buty represented NHC.
The company emphasized that this agreement complements its qualitative projects with major global construction companies, SPA reported.
It added that this initiative would be implemented in various areas within the suburbs and urban communities under NHC, distinguished by integrated facilities and services, including health, education, commercial, and public services.
NHC, one of the largest real estate firms in the Middle East, aims to develop housing communities and improve living spaces in the Kingdom by creating nine integrated residential suburbs and delivering 300,000 units by the end of 2025.
The company plans to implement integrated urban projects according to the highest standards at affordable prices, as well as enhance the sustainability of residential projects in various regions in Saudi Arabia.
This comes as the Kingdom aims to elevate services for citizens and unify all efforts across sectors to achieve the targets of the Housing Program in line with the nation’s Vision 2030. This is part of its efforts to increase the homeownership rate for Saudi families to 70 percent.
Last week, NHC signed a deal with China’s CITIC Construction Group to establish an industrial city and logistic zones for building materials. The undertaking will comprise 12 factories aimed at securing supply chains for the Saudi firm’s housing projects.
In a statement, the NHC said the agreement with the Chinese construction group is part of its efforts to secure supply chains for its housing initiatives and ensure their timely completion and high quality.
The Saudi company said the deal entails the construction of 12 factories specializing in building materials, harnessing Chinese expertise, and an uplift in business standards by local factories.
It added that the agreement also aims to draw top-tier service providers across various company sectors, its subsidiaries, and other projects.
GCC prioritizes economic diversification for sustainable growth, says official
RIYADH: The Gulf Cooperation Council aims to reduce reliance on oil revenues by implementing a comprehensive vision for economic diversification, as emphasized by its Secretary-General, Jasem Al-Budaiwi.
During the Gulf Creatives Conference, organized by the Diwan at Harvard University in Cambridge, Massachusetts, Al-Budaiwi outlined a vision that embraces diverse sectoral reforms. These initiatives are aimed at strengthening economic resilience and attracting foreign investments, the Saudi Press Agency reported.
He noted GCC countries have positioned themselves as competitive digital hubs on the global map, supported by their favorable geographic location and young population.
“The strategic location, coupled with robust infrastructure, paves the way for the council member states to attract international partnerships that support their long-term development goals,” Al-Budaiwi said.
He added: “This dynamic approach is vital for sustaining economic growth and ensuring the resilience of Gulf economies in the face of global economic fluctuations and regional challenges.”
Additionally, Al-Budaiwi emphasized the numbers and data supporting these plans and showcased the advancements made by GCC nations, including the establishment of the Customs Union, the GCC Common Market, and the Unified Economic Agreement. He cited Saudi Arabia’s NEOM project as an example of urban development initiatives within GCC nations.
He explained that smart cities are designed to reduce waste, enhance energy efficiency, and streamline urban management by leveraging artificial intelligence and the Internet of Things.
He continued by stating that this further underscores the GCC nations’ commitment to technologically advanced and environmentally friendly urban design, as well as the increased emphasis on cybersecurity to mitigate growing risks and maintain confidence in the digital economy.
Moreover, Al-Budaiwi emphasized the transition from oil-dependent to diversified economies and expressed satisfaction with the outstanding economic and integration achievements of the GCC countries.
In February, he held a series of meetings in Riyadh with foreign ambassadors to Saudi Arabia.
Al-Budaiwi met with the South Korean Ambassador to Saudi Arabia, Choi Byung Hyuk, at the general secretariat headquarters in Riyadh.
During the meeting, the secretary-general discussed the developments in the free trade agreement between the GCC countries and South Korea, which was signed in December 2023.
Both sides expressed their desire to enhance cooperation between nations and increase focus on mutual interests such as education, health, investment, and pharmaceuticals.
The meeting also reviewed relations between the GCC and South Korea, emphasizing the importance of enhancing strategic dialogue through the areas of cooperation outlined in the joint action plan.
Expat remittances from Saudi Arabia hit $3.2bn in March
- The upswing is the highest since June 2022, SAMA data shows
RIYADH: Remittances by expatriates in Saudi Arabia grew 28 percent in March as compared to the preceding month to reach SR11.96 billion ($3.2 billion), the highest since 2022, official data showed.
The launching of new development projects in the Kingdom has led to an increase in the expatriate population, as they actively contribute to the growth of business activities. This, in turn, may have influenced their remittance patterns.
This growth in remittances is also exemplified by the Regional Headquarters Program, which has successfully attracted over 200 companies from across the globe to obtain licenses to set up their regional bases in Saudi Arabia.
These entities are driven by the prospect of securing lucrative government contracts. Additionally, the ongoing structural reforms to enhance foreign direct investment have further stimulated business growth in the Kingdom.
Alongside regulatory reform, Saudi Arabia has undergone modernization in its legal governance and enforcement practices such as digitization of employment contracts, virtual court hearings, and provision of online government services. These initiatives are integral components of a broader set of reforms aimed at positioning the Kingdom as one of the leading nations in terms of ease of doing business.
However, on a quarterly basis, there was a 0.34 percent decrease in expat remittances compared to the same period last year. This trend can be attributed to Saudi Arabia’s evolving economic landscape, particularly the implementation of financial sector reforms, which are increasingly enticing residents to invest a portion of their earnings within the Kingdom.
In February of this year, a report by Jadwa Investment noted that workers’ remittances were unexpectedly low despite the influx of expatriates.
This phenomenon according to their report may suggest that some expatriates opted to capitalize on the high savings rates in the Kingdom instead of remitting funds home.
The Saudi Central Bank, also known as SAMA, has raised key policy rates multiple times in 2022 and 2023, given that the Saudi currency is pegged to the dollar. This move aligns with the actions taken by the US Federal Reserve, which has been gradually increasing interest rates as part of its strategy to address inflationary pressures.
Conversely, remittances from Saudis saw a 9 percent monthly increase, totaling SR5.11 billion, yet experienced a quarterly decline of 0.53 percent.
The occurrence of Ramadan in March this year likely influenced the increase in Saudi remittances for this month. During this holy month, individuals often engage in increased charity, support their families, and fulfill religious obligations, such as zakat.
Egypt aims to attract Apple, pushing to solidify position as manufacturing hub
RIYADH: Egypt is making strides to become a manufacturing hub, with four of the top five mobile phone manufacturers — Samsung, Vivo, Oppo, and Xiaomi — agreeing to establish factories in the country.
Prime Minister Mostafa Madbouly emphasized these strategic initiatives during a tour of the 10th of Ramadan, the country’s largest industrial zone. The aim is to attract the fifth tech giant, Apple, to further bolster Egypt’s position in regional manufacturing.
Madbouly’s visit included several factories, including one specializing in producing sanitary devices at the highest standards for various international brands.
This stopover underscores the Egyptian government’s commitment, which President Abdel El-Sisi reinforced, to expanding and strengthening the industrial sector.
The prime minister noted the government’s efforts to attract significant global companies to Egypt, aiming to create high local value-added goods and foster a conducive environment for foreign investment.
He emphasized the state’s strategy to enhance communication with international investors and manufacturers, offering the necessary support to help them realize their expansion plans within the Egyptian market, particularly those targeting export activities.
This aggressive push to diversify Egypt’s industrial base and enhance its export potential is a key component of the nation’s broader economic strategy, aiming to secure a more prominent position in the global financial landscape.
The government is actively pursuing an increase in its investment attraction status as it aims to lower its import bill to reduce liquidity and foreign reserve pressures.
Earlier in May, global ratings agency Fitch revised Egypt’s outlook to positive from stable.
The agency affirmed Egypt’s rating at “B-,” citing reduced external financing risks and stronger foreign direct investment.
Since the country announced the International Monetary Fund loan program, foreign investors have poured billions of dollars into Egyptian treasury bills. After the investment in the country’s foreign portfolio and the support from the UAE, Egypt’s net foreign assets deficit shrank by $17.8 billion in March.
Fitch said that initial steps to contain off-budget spending should help to reduce public debt sustainability risks.
The country straddles North Africa and West Asia and has been grappling with an ongoing economic crisis linked to persistent foreign currency shortages. In the fourth quarter of 2023, its foreign debt climbed by $3.5 billion to $168.0 billion.
Meanwhile, Moody’s also revised its outlook on Egypt to “positive” in early March while affirming its ratings due to the high government debt ratio and weaker debt affordability compared to its peers.
