DOHA/DUBAI/ABU DHABI: Shortages of US dollars hit money exchange houses in Qatar on Sunday, making it harder for worried foreign workers to send money home, as foreign banks scaled back business with Qatari institutions because of the region’s diplomatic crisis.
“We have no dollars because there is no shipment or transportation from the UAE. There is no stock,” said a dealer at the Qatar-UAE Exchange House in Doha’s City Center mall. “The shipment is blocked from the UAE.”
Several other exchange houses in Doha also told Reuters they had no supplies of dollars.
At Qatar-UAE Exchange, dozens of people — some of the foreigners who comprise nearly 90 percent of the population of 2.6 million — waited quietly in line to change money or make remittances to their home countries.
“I am not panicked but my family are scared,” said John Vincent, an air-conditioning repairman from the Philippines.
“I sent 2,000 riyals ($550) home but I have some more savings left here in Qatar. I will see what the situation is in coming days before I decide what to do.”
The dollar shortages do not mean Qatar is running out of money. But they show how the diplomatic crisis is disrupting parts of the financial system.
Saudi Arabia, the UAE, Bahraini and Egyptian banks began scaling back business with Qatar last week after their governments cut diplomatic and transport ties, accusing Doha of supporting terrorism.
Then at the weekend, the UAE told its banks to exercise “enhanced due diligence” toward six Qatari banks which, it alleged, might have done business with people or entities on a terrorism blacklist.
UAE banks were absent from Qatar’s foreign exchange and money markets on Sunday, causing both those markets to slow down, because they feared any deals could expose them to legal risk, bankers said.
Some Western banks with a presence in Qatar continued business as normal, partly because they did not want to lose out on billions of dollars of building projects.
But other Western banks have halted new Qatar business including interbank and syndicated lending, while continuing to service existing business, banking sources said.
“Everybody is shocked — they are not worried about Qatar’s credit, they are worried about compliance and the risk that the local sanctions could be escalated to an international level,” said one foreign banker in the region.
Dollars
Exchange house dealers in Qatar said the dollar shortage was partly a seasonal phenomenon, because the Gulf’s hot summer and Ramadan had begun, periods when there was traditionally high demand for travel abroad.
Sudhir Kumar Shetty, president of UAE Exchange, which has eight branches in Qatar, said his firm was continuing to handle remittances and currency buying as usual in that country.
He said the firm had not seen any major change in remittance volumes due to the diplomatic tension.
But he added that dollar supply was not meeting demand in Qatar and attributed this partly to flows of the US currency from other Gulf countries being disrupted.
“Everywhere, all the banks and exchange houses, there are no dollars. All the exchange houses are trying to get currencies from other countries,” the dealer at Qatar-UAE Exchange said, adding that his firm was hoping for a shipment from Hong Kong.
The six Qatari banks named by the UAE — Qatar National Bank (QNB), Qatar Islamic Bank, Qatar International Islamic Bank, Masraf Al-Rayan, Doha Bank and unlisted Barwa Bank — did not respond to Reuters requests for comment.
The share prices of all five of the listed banks fell on Sunday, with QNB losing 0.5 percent, as investors reacted to the prospect of the banks facing funding difficulties because of reduced ability to borrow from foreign institutions.
Qatari banks have around 60 billion riyals ($16.5 billion) in funding in the form of customer and interbank deposits from other Gulf states, SICO Bahrain estimated. Most of this could eventually be withdrawn if the crisis continues.
Bankers expect Qatari banks to borrow from the central bank’s repo facility if they become short of funds.
The repo rate is currently at 2.25 percent and the cost of borrowing three-month money among Qatari banks rose near that level on Sunday, to 2.20 percent, the highest in many years.
Central Bank rules limit the size of the repos to 2 percent of each bank’s private sector deposits.
Bankers speculate the Central Bank may lift this cap; the central bank did not respond to requests for comment.
Dollar shortages hit Qatar exchange houses
Dollar shortages hit Qatar exchange houses
Egypt’s middle class cuts costs as IMF-backed reforms take hold
- The world lender has long backed measures in Egypt including a liberal currency exchange market and weaning the public away from subsidies
Cairo: Egypt’s economy has been in crisis for years, but as the latest round of International Monetary Fund-backed reforms bites, much of the country’s middle class has found itself struggling to afford goods once considered basics.
The world lender has long backed measures in Egypt including a liberal currency exchange market and weaning the public away from subsidies.
On the ground, that has translated into an eroding middle class with depleted purchasing power, turning into luxuries what were once considered necessities.
Nourhan Khaled, a 27-year-old private sector employee, has given up “perfumes and chocolates.”
“All my salary goes to transport and food,” she said as she perused items at a west Cairo supermarket, deciding what could stay and what needed to go.
For some, this has extended to cutting back on even the most basic goods — such as milk.
“We do not buy sweets anymore and we’ve cut down on milk,” said Zeinab Gamal, a 28-year-old housewife.
Most recently, Egypt hiked fuel prices by 17.5 percent last month, marking the third increase just this year.
Mounting pressures
The measures are among the conditions for an $8 billion IMF loan program, expanded this year from an initial $3 billion to address a severe economic crisis in the North African country.
“The lifestyle I grew up with has completely changed,” said Manar, a 38-year-old mother of two, who did not wish to give her full name.
She has taken on a part-time teaching job to increase her family’s income to 15,000 Egyptian pounds ($304), just so she can “afford luxuries like sports activities for their children.”
Her family has even trimmed their budget for meat, reducing their consumption from four times to “only two times per week.”
Egypt, the Arab world’s most populous country, is facing one of its worst economic crises ever.
Foreign debt quadrupled since 2015 to register $160.6 billion in the first quarter of 2024. Much of the debt is the result of financing for large-scale projects, including a new capital east of Cairo.
The war in Gaza has also worsened the country’s economic situation.
Repeated attacks on Red Sea shipping by Yemen’s Houthi rebels in solidarity with Palestinians in Gaza have resulted in Egypt’s vital Suez Canal — a key source of foreign currency — losing over 70 percent of its revenue this year.
Amid growing public frustration, officials have recently signalled a potential re-evaluation of the IMF program.
“If these challenges will make us put unbearable pressure on public opinion, then the situation must be reviewed with the IMF,” President Abdel Fattah El-Sisi said last month.
Prime Minister Mostafa Madbouly also ruled out any new financial burdens on Egyptians “in the coming period,” without specifying a timeframe.
Economists, however, say the reforms are already taking a toll.
Wael Gamal, director of the social justice unit at the Egyptian Initiative for Personal Rights, said they led to “a significant erosion in people’s living conditions” as prices of medicine, services and transportation soared.
He believes the IMF program could be implemented “over a longer period and in a more gradual manner.”
’Bitter pill to swallow’
Egypt has been here before. In 2016, a three-year $12-billion loan program brought sweeping reforms, kicking off the first of a series of currency devaluations that have decimated the Egyptian pound’s value over the years.
Egypt’s poverty rate stood at 29.7 percent in 2020, down slightly from 32.5 percent the previous year in 2019, according to the latest statistics by the country’s CAPMAS agency.
But Gamal said the current IMF-backed reforms have had a “more intense” effect on people.
“Two years ago, we had no trouble affording basics,” said Manar.
“Now, I think twice before buying essentials like food and clothing,” she added.
Earlier this month, the IMF’s managing director Kristalina Georgieva touted the program’s long-term impact, saying Egyptians “will see the benefits of these reforms in a more dynamic, more prosperous Egyptian economy.”
Her remarks came as the IMF began a delayed review of its loan program, which could unlock $1.2 billion in new financing for Egypt.
Economist and capital market specialist Wael El-Nahas described the loan as a “bitter pill to swallow,” but called it “a crucial tool” forcing the government to make “systematic” decisions.
Still, many remain skeptical.
“The government’s promises have never proven true,” Manar said.
Egyptian expatriates send about $30 billion in remittances per year, a major source of foreign currency.
Manar relies on her brother abroad for essentials, including instant coffee which now costs 400 Egyptian pounds (about $8) per jar.
“All I can think about now is what we will do if there are more price increases in the future,” she said.
Roadside bomb kills three soldiers in northern Iraq
BAGHDAD: A roadside bomb targeting an Iraqi army vehicle killed three soldiers in northern Iraq on Sunday, police and hospital sources said.
The attack near the town of Tuz Khurmatu, about 175 km (110 miles) north of the capital Baghdad, critically wounded two others.
There was no immediate claim of responsibility for the attack, but Daesh militants are active in the area, said two Iraqi security officials.
Despite the group’s defeat in 2017, remnants continue to conduct hit-and-run attacks against government forces.
Gaza civil defense says 20 dead in Israeli air strikes
- The Gaza health ministry said 43,799 people have been confirmed dead since Oct. 7, 2023
GAZA STRIP: Gaza’s civil defense on Sunday said Israeli air strikes killed at least 20 people, including four women and three children, across the war-torn Palestinian territory.
The deadliest strike killed 10 people in the Bureij refugee camp in central Gaza, said civil defense spokesman Mahmud Bassal.
At least one woman was killed and 10 were wounded in another strike on a house in at the same camp, he added.
Five other people were killed and 11 wounded by a “missile launched by an Israeli drone” Sunday morning in the southern city of Rafah, Bassal said.
Four others – three women and a child – were killed in an overnight strike on a house in the west of the Nuseirat camp in central Gaza, he added.
The Gaza health ministry on Saturday said the overall death toll in more than 13 months of war had reached 43,799.
The majority of the dead are civilians, according to ministry figures, which the United Nations considers reliable.
Hamas's October 7, 2023 attack that sparked the war resulted in the deaths of 1,206 people, mostly civilians, according to an AFP tally of Israeli official figures.
Israel bombs south Beirut after Hezbollah targets Haifa area
- Israeli military spokesman Avichay Adraee on X warned residents near the three target sites to leave
Beirut: An Israeli strike hit south Beirut on Sunday where the military said it targeted Hezbollah, hours after the Iran-backed group said it fired on Israeli bases around the city of Haifa.
A column of smoke rose over the capital’s southern suburbs, AFPTV footage showed, following a warning from the Israeli military for residents to evacuate three areas.
Further south, overnight Israeli airstrikes and artillery shelling hit the flashpoint southern town of Khiam, some six kilometers (four miles) from the border, Lebanon’s state-run National News Agency reported early Sunday.
The bombardment came after Israel’s military reported a “heavy rocket barrage” on Haifa late Saturday and said a synagogue was hit, wounding two civilians.
Israel has escalated its bombing of Lebanon since September 23 and has since sent in ground troops, following almost a year of limited, cross-border exchanges of fire begun by Iran-backed Hezbollah militants in support of Hamas in Gaza.
In the Palestinian territory, where Hamas’s attack on Israel triggered the war, the civil defense agency reported 24 people killed in strikes Saturday.
Police in Israel said three suspects were arrested after two flares landed near Prime Minister Benjamin Netanyahu’s residence in the town of Caesarea, south of Haifa, but he was not home.
The incident comes about a month after a drone targeted the same residence, which Hezbollah claimed.
Israel’s military chief said Saturday Hezbollah had already “paid a big price,” but Israel will keep fighting until tens of thousands of its residents displaced from the north can return safely.
Beirut’s southern suburbs were veiled in smoke Sunday, following repeated Israeli bombardment a day earlier of the Hezbollah stronghold.
The Israeli military said aircraft had targeted “a weapons storage facility” and a Hezbollah “command center.”
Hezbollah fired around 80 projectiles at Israel on Saturday, the military said.
Lebanon rescuers mourned
Israeli forces also shelled the area along the Litani River, which flows across southern Lebanon, NNA said Sunday.
The agency earlier reported strikes on the southern city of Tyre, including in a neighborhood near UNESCO-listed ancient ruins. Israel’s military late Saturday said it had hit Hezbollah facilities in the Tyre area.
In Lebanon’s east, the health ministry said an Israeli strike in the Bekaa Valley killed six people including three children.
Hezbollah said it fired a guided missile that set an Israeli tank ablaze in the southwest Lebanon village of Shamaa, about five kilometers from the border.
Late Saturday, Hezbollah said it had targeted five military bases including the Stella Maris naval base.
In eastern Lebanon, funerals were held for 14 civil defense staff killed in an Israeli strike on Thursday.
“They weren’t involved with any (armed) party... they were just waiting to answer calls for help,” said Ali Al-Zein, a relative of one of the dead.
Lebanese authorities say more than 3,452 people have been killed since October last year, with most casualties recorded since September.
Israel announced the death of a soldier in southern Lebanon, bringing to 48 the number killed fighting Hezbollah.
Imminent famine
In Hamas-run Gaza, the Israeli military said it had continued operations in the northern areas of Jabalia and Beit Lahia, the targets of an intense offensive since early October.
Israel said its renewed operations were aimed at stopping Hamas from regrouping.
A UN-backed assessment on November 9 warned famine was imminent in northern Gaza, amid the increased hostilities and a near-halt in food aid.
Israel has pushed back against a 172-page Human Rights Watch report this week that said its mass displacement of Gazans amounts to a “crime against humanity,” as well as findings from a UN Special Committee pointing to warfare practices “consistent with the characteristics of genocide.”
A foreign ministry spokesman dismissed the HRW report as “completely false,” while the United States — Israel’s main military supplier — said accusations of genocide “are certainly unfounded.”
The Gaza health ministry on Saturday said the overall death toll in more than 13 months of war had reached 43,799.
The majority of the dead are civilians, according to ministry figures, which the United Nations considers reliable.
Hamas’s October 7, 2023 attack that sparked the war resulted in the deaths of 1,206 people, mostly civilians, according to an AFP tally of Israeli official figures.
Demonstrators in Tel Aviv on Saturday reiterated demands that the government reach a deal to free dozens of hostages still held in Gaza.
The protest came a week after mediator Qatar suspended its role until Hamas and Israel show “seriousness” in truce and hostage-release talks.
Israeli military reports soldier killed in battle north of Gaza on Saturday
CAIRO: The Israeli military said on Sunday that a fighter in the Nachshon Regiment (90), Kfir Brigade, was killed in battle north of Gaza on Saturday.
