Qatari riyal under pressure as Saudi, UAE banks delay Qatar deals

A man stands outside the Abu Dhabi Islamic Bank in Doha. (AFP)
Updated 07 June 2017
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Qatari riyal under pressure as Saudi, UAE banks delay Qatar deals

DUBAI/DOHA: Qatar’s currency came under pressure on Tuesday as Gulf Arab commercial banks started holding off on business with Qatari banks because of a diplomatic rift in the region.
Banking sources said some banks from Saudi Arabia, the UAE and Bahrain delayed letters of credit and other deals with Qatari banks after their governments cut diplomatic ties and transport links with Doha on Monday, accusing Qatar of backing terrorism.
Saudi Arabia’s central bank advised banks in the Kingdom not to trade with Qatari banks in Qatari riyals, the sources told Reuters.
Doha, the world’s biggest liquefied natural gas exporter, says it has enough reserves to support its banks and its riyal currency, which is pegged to the dollar.
Qatari banks have been borrowing abroad to fund their activities. Their foreign liabilities ballooned to QR451 billion ($124 billion) in March from QR310 billion at the end of 2015, central bank data shows.
So any extended disruption to their ties with foreign banks could potentially threaten a funding crunch for some Qatari banks. Banks from the UAE, Europe and elsewhere have been lending to Qatari institutions.
Gulf banking sources, who refused to be named because of political sensitivities, said Saudi Arabian, UAE and Bahraini banks were postponing deals until they received guidance from their central banks on how to handle Qatar.
“We will not take action without central bank guidance, but it is wise to evaluate what you give to Qatari clients and hold off until there is further clarity,” said a UAE banker, adding that trade finance had stalled for the time being.
The sources said the UAE and Bahraini central banks had asked banks under their supervision to report their exposure to Qatari banks. The UAE and Bahraini central banks did not reply to requests for comment.
With an estimated $335 billion of assets in its sovereign wealth fund and its gas exports earning billions of dollars every month, Qatar has enough financial power to protect its banks.
“We are watching the financial sector very closely. If the market needs liquidity, the central bank will definitely provide liquidity,” a Qatari central bank official told Reuters.
Nevertheless, losing some of their foreign business links could be uncomfortable for Qatari banks because they have been expanding their loans faster than other banks in the Gulf Cooperation Council (GCC). To fund this, they have been seeking loans and deposits from the rest of the GCC.
Among large banks, Doha Bank and Qatar Islamic Bank (QIB) are the most exposed to GCC deposits, with QIB obtaining a quarter of its deposits from the GCC, said Olivier Panis, analyst at Moody’s Investors Service.
“We need to look into the maturity of those deposits but if they’re short-term deposits, this could expose the banks rapidly to reduced confidence from GCC institutions,” he said.
Doha Bank and QIB did not respond to requests for comment.
Because of such worries, the Qatari riyal fell in the spot market on Tuesday to 3.6470 against the US dollar, its lowest level since June 2016, although it later rebounded to 3.6405, almost equal to its official peg of 3.64.
It also fell slightly in the one-year forward market, where traders bet on rates 12 months from now.
The riyal’s drop “is based on speculation,” the Qatari central bank official said, adding Doha had a “huge cushion” of foreign currency to support the riyal if necessary.
A commercial banker in fellow GCC state Kuwait, which did not sever diplomatic ties with Qatar, said on Tuesday that business with Qatari institutions was continuing as normal.
But there were signs that Qatar’s financial ties might be damaged well beyond the Gulf. Some Sri Lankan banks stopped buying Qatari riyals, saying counterpart banks in Singapore had advised them not to accept the currency.
In Egypt, which also cut diplomatic and transport ties with Qatar, some banks resumed dealing in Qatari riyals after halting trade on Monday, but others appeared to be continuing to limit transactions with Doha.
Banks reducing their business with Qatar could lose out financially, but the damage looks likely to be relatively minor. Panis at Moody’s estimated under 2 percent of Saudi banking sector assets were related to Qatar and the figure was around 5 percent for Bahrain, while the UAE’s exposure was also small.


Drone attack shuts Iraq oil field run by US company

Updated 4 sec ago
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Drone attack shuts Iraq oil field run by US company

  • The Kurdistan natural resources ministry said the Sarsang oil field in Duhok province was hit
  • Strike called ‘an act of terrorism against the Kurdistan Region’s vital economic infrastructure’
IRBIL, Iraq: A drone strike forced a US company to suspend operations at an oil field in Iraq’s autonomous Kurdistan region Tuesday, amid a wave of similar attacks targeting the region’s energy infrastructure.
The Kurdistan natural resources ministry said the Sarsang oil field in Duhok province was hit, calling the strike “an act of terrorism against the Kurdistan Region’s vital economic infrastructure.”
The attack followed a similar drone strike a day earlier in neighboring Irbil province.
HKN Energy, the US company, said Tuesday’s blast occurred at about 7:00 a.m. (0400 GMT) at one of its production facilities in the Sarsang field.
“Operations at the affected facility have been suspended until the site is secured,” it said in a statement.
A fire broke out following the explosion, which did not cause any casualties.
Emergency response teams have contained the blaze, the company said later in an update.
In the past few weeks, there has been a spate of drone and rocket attacks mostly affecting Kurdistan.
Long plagued by conflict, Iraq has frequently experienced such attacks, often linked to regional proxy struggles.
The explosion in Sarsang field occurred a day after three explosive-laden drone attacks were reported in Kurdistan, with one drone shot down near Irbil airport, which hosts US troops, and another two hitting the Khurmala oil field causing material damage.
There has been no claim of responsibility for those attacks.
But, on July 3, the Kurdistan authorities said a drone was downed near Irbil airport, blaming the Hashed Al-Shaabi – a coalition of pro-Iran former paramilitaries now integrated into the regular armed forces.
The federal government in Baghdad rejected the accusation.
The latest attacks come at a time of heightened tension between Baghdad and Irbil over oil exports, with a major pipeline through Turkiye shut since 2023 over legal disputes and technical issues.
In May, Iraq’s federal authorities filed a complaint against the autonomous Kurdistan region for signing gas contracts with two US companies, including HKN Energy.

Syrian forces enter Druze city after deadly clashes

Updated 25 min 13 sec ago
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Syrian forces enter Druze city after deadly clashes

  • A curfew was to be imposed on the southern city of Sweida in a bid to halt the violence
  • Syrian troops had begun moving toward the city on Monday, taking control of at least one Druze village

DAMASCUS: Syrian government forces entered the majority Druze city of Sweida on Tuesday, the interior ministry said, aiming to end clashes with Bedouin tribes that have killed nearly 100 people.

The southern city had been under the control of armed factions from the Druze minority, whose religious leaders said they had approved the deployment of Damascus’s troops and called on fighters to hand over their weapons.

A curfew was to be imposed on the southern city in a bid to halt the violence, which erupted at the weekend and has since spread across Sweida governorate.

Government forces said they intervened to separate the two sides but ended up taking control of several Druze areas around Sweida, an AFP correspondent reported.

Military columns were seen advancing toward Sweida on Tuesday morning, with heavy artillery deployed nearby.

The defense ministry said later that they had entered the city, and urged people to “stay home and report any movements of outlaw groups.”

An AFP correspondent heard explosions and gunshots as soldiers moved into Sweida.

Troops had begun heading toward the city on Monday, taking control of at least one Druze village, with one Druze faction saying talks were underway with the Damascus government.

The Syrian Observatory for Human Rights war monitor reported 99 people killed since the fighting erupted on Sunday — 60 Druze, including four civilians, 18 Bedouin fighters, 14 security personnel and seven unidentified people in military uniforms.

The defense ministry reported 18 deaths among the ranks of the armed forces.

While Druze religious authorities had called on Monday evening for a ceasefire and said they didn’t oppose the central government, Sheikh Hikmat Al-Hijri, one of the three Druze spiritual leaders in Sweida, opposed the arrival of the security forces and called for “international protection.”

Israel, which has attempted to portray itself as a protector of the Druze in Syria and sees them as potential allies, bombed several Syrian tanks on Monday.

The strikes were “a clear warning to the Syrian regime – we will not allow harm to be done to the Druze in Syria,” said Defense Minister Israel Katz, whose country has its own Druze population.

The fighting underscores the challenges facing interim leader Ahmad Al-Sharaa, whose Islamist forces ousted president Bashar Assad in December after nearly 14 years of civil war.

Syria’s pre-war Druze population was estimated at around 700,000, many of them concentrated in Sweida province.

The Druze, followers of an esoteric religion that split from Shiite Islam, are mainly found in Syria, Lebanon and Israel.

Following deadly clashes with government forces in April and May, local and religious leaders reached an agreement with Damascus under which Druze fighters had been providing security in the province.

“We lived in a state of extreme terror – the shells were falling randomly,” said Abu Taym, a 51-year-old father.

Amal, a 46-year-old woman, said: “We fear a repeat of the coastal scenario,” referring to massacres in March of more than 1,700 mostly Alawite civilians in northwest Syria, where groups affiliated with the government were blamed for most of the killings.

“We are not against the state, but we are against surrendering our weapons without a state that treats everyone the same,” she added.

In a post on X, Syrian Defense Minister Murhaf Abu Qasra urged his troops to “protect your fellow citizens” from “outlaw gangs,” and to “restore stability to Sweida.”

The violence began on Sunday when Bedouin gunmen abducted a Druze vegetable vendor on the highway to Damascus, prompting retaliatory kidnappings.

The Observatory said members of Bedouin tribes, who are Sunni Muslims, had sided with security forces during earlier confrontations with the Druze.

Bedouin and Druze factions have a longstanding feud in Sweida, and violence occasionally erupts between the two sides.


Netanyahu’s coalition is rattled as ultra-Orthodox party announces exit over military draft law

Updated 15 July 2025
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Netanyahu’s coalition is rattled as ultra-Orthodox party announces exit over military draft law

  • United Torah Judaism’s two factions said they were bolting the government over disagreements surrounding a bill that would codify broad military draft exemptions
  • The issue has long divided Jewish Israelis, most of whom are required to enlist, a rift that has only widened since the war in Gaza began

TEL AVIV: An Israeli ultra-Orthodox party that has been a key governing partner of Prime Minister Benjamin Netanyahu said early Tuesday it was leaving the coalition government, threatening to destabilize the Israeli leader’s rule at a pivotal time in the war in Gaza.

United Torah Judaism’s two factions said they were bolting the government over disagreements surrounding a bill that would codify broad military draft exemptions for their constituents, many of whom study Jewish texts instead of enlist to the military. The issue has long divided Jewish Israelis, most of whom are required to enlist, a rift that has only widened since the war in Gaza began and demands on military manpower grew.

The departure of a party that has long served as a kingmaker in Israeli politics doesn’t immediately threaten Netanyahu’s rule. But, once it comes into effect within 48 hours, it will leave the Israeli leader with a slim majority in a government that could now more heavily rely on the whims of two far-right parties. Those parties oppose concessions in ceasefire negotiations with Hamas and have themselves quit or threatened to quit the government over moves to end or even pause the war in Gaza.

The political shake-up comes as Israel and Hamas are discussing the terms of a truce for the 21-month war in Gaza. Despite heavy pressure by the US, Israel’s top ally, and mediators Egypt and Qatar, there is no breakthrough yet in the talks. A recurring sticking point has been whether the war ends as part of any truce and Netanyahu’s far-right parties oppose ending the war while Hamas remains intact.

United Torah Judaism’s departure has a window of 48 hours before becoming official, meaning Netanyahu can still find ways to satisfy the party and bring it back into the coalition. But Shuki Friedman, vice president of the Jewish People Policy Institute, said the gaps between the draft law currently on the table and the demands of the party are still wide, making a compromise unlikely during that time.

Friedman said the party’s departure doesn’t immediately put Netanyahu’s rule at risk. A vote to dissolve parliament, that would bring down the government and trigger new elections, can’t be brought by the opposition until the end of the year because of procedural reasons. And a summer recess for Parliament, beginning later this month and stretching until October, gives Netanyahu another attempt to bridge the gaps and bring the party back into the coalition.

Cabinet Minister Miki Zohar, from Netanyahu’s Likud party, said he was hopeful the party could be coaxed back to the coalition. “God willing, everything will be fine,” he said.

A Likud spokesman did not immediately respond to a request for comment.


Egypt grand museum delay puts tourism hopes on hold

Updated 15 July 2025
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Egypt grand museum delay puts tourism hopes on hold

  • The vast museum, two decades in the making, has faced repeated delays
  • Tourism accounts for about 10 percent of Egypt’s workforce, but the sector has struggled

CAIRO: In the shadow of the Grand Egyptian Museum, souvenir shop owner Mona has been readying for the tourist boom she hoped the long-awaited opening would bring – now once again out of reach.

“I had bet everything on this opening,” she said from her shop, just steps from the iconic pyramids of Giza, which the much-anticipated museum overlooks.

Originally scheduled to fully open this month, the museum was expected to attract up to five million visitors annually, fueling optimism across Cairo’s battered tourism sector.

“We planned our entire summer and fall packages around the museum opening,” said Nadine Ahmed, a 28-year-old agent with Time Travel tours.

“But with group cancelations, refunds and route changes, we’ve lost tens of thousands of dollars.”

Though parts of the museum have been open for months, the main draw – the treasures of Tutankhamun – will remain under wraps until the official launch.

Less than three weeks before its July 3 opening, the government announced another delay, this time pushing the landmark event to the final quarter of the year.

Prime Minister Mostafa Madbouly cited regional security concerns and the desire to host an event of “global scale.”

The vast museum, two decades in the making, has faced repeated delays – from political upheaval and economic crises to the COVID-19 pandemic.

Ahead of the expected launch, Mona, who asked to be identified by her first name only, took out a loan to renovate her store and stock up on goods inspired by the museum’s collection.

A few streets away, Mohamed Mamdouh Khattab, 38, prepared months in advance, hiring and training extra staff and expanding his inventory.

“The opening of the museum is a key milestone,” said Khattab, who owns a sprawling bazaar of handcrafted jewelry and ancient replicas.

“It’s a project that should have been launched a long time ago,” said the vendor, whose family has been in the industry since the 1970s.

Tourism accounts for about 10 percent of Egypt’s workforce, but the sector has struggled – from the fallout of the 2011 Arab Spring to militant attacks and the COVID-19 shutdown.

Still, signs of recovery have emerged: Egypt welcomed 3.9 million tourists in the first quarter of 2025, up 25 percent from the same period last year – itself a record.

At a Giza papyrus workshop, 30-year-old tour guide Sara Mahmoud hopes the opening will revive visitor numbers.

“Big openings have brought a lot of tourism to Egypt before,” she said, pointing to the 2021 Pharaohs’ Golden Parade and the reopening of the Avenue of the Sphinxes.

“These events get people excited – we saw the crowds coming in.”

Such momentum could make a real difference, said Ragui Assaad, an economist at the University of Minnesota.

“Any initiative that directly increases foreign exchange earnings is likely to have a good return on investment,” he said.

“If you compare it with all the other mega-projects, which do not increase foreign exchange earnings... this is a far better project.”

He was referring to a sweeping infrastructure drive under President Abdel Fattah El-Sisi, including the construction of a massive new administrative capital east of Cairo.

The stakes are high: since 2022, Egypt’s currency has lost two-thirds of its value, squeezing household budgets and straining every layer of the economy.

“There were days when I sold just one bracelet,” Mona lamented, thinking back to the years when “tourists arrived in droves.”


Israeli ultra-Orthodox party leaves government over conscription bill

Updated 15 July 2025
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Israeli ultra-Orthodox party leaves government over conscription bill

  • Ultra-Orthodox parties have argued that a bill to exempt yeshiva students was a key promise in their agreement to join the coalition in late 2022

JERUSALEM: One of Israel's ultra-Orthodox parties, United Torah Judaism, said it was quitting Prime Minister Benjamin Netanyahu's ruling coalition due to a long-running dispute over failure to draft a bill to exempt yeshiva students from military service.
Six of the remaining seven members of UTJ, which is comprised of the Degel Hatorah and Agudat Yisrael factions, wrote letters of resignation. Yitzhak Goldknopf, chairman of UTJ, had resigned a month ago.
That would leave Netanyahu with a razor thin majority of 61 seats in the 120 seat Knesset, or parliament.
It was not clear whether Shas, another ultra-Orthodox party, would follow suit.
Degel Hatorah said in a statement that after conferring with its head rabbis, "and following repeated violations by the government to its commitments to ensure the status of holy yeshiva students who diligently engage in their studies ... (its MKs) have announced their resignation from the coalition and the government."
Ultra-Orthodox parties have argued that a bill to exempt yeshiva students was a key promise in their agreement to join the coalition in late 2022.
A spokesperson for Goldknopf confirmed that in all, seven UTJ Knesset members are leaving the government.
Ultra-Orthodox lawmakers have long threatened to leave the coalition over the conscription bill.
Some religious parties in Netanyahu's coalition are seeking exemptions for ultra-Orthodox Jewish seminary students from military service that is mandatory in Israel, while other lawmakers want to scrap any such exemptions altogether.
The ultra-Orthodox have long been exempt from military service, which applies to most other young Israelis, but last year the Supreme Court ordered the defence ministry to end that practice and start conscripting seminary students.
Netanyahu had been pushing hard to resolve a deadlock in his coalition over a new military conscription bill, which has led to the present crisis.
The exemption, in place for decades and which over the years has spared an increasingly large number of people, has become a heated topic in Israel with the military still embroiled in a war in Gaza.