LONDON: Trade talks between Egypt and Sudan that were described as “successful” came to an end in Cairo on Thursday. The talks followed months of strained economic relations between the two neighboring countries.
It is expected that a trade and economic agreement will be announced soon, which will aim to resolve outstanding trade issues between the two countries in order to further their mutual interests.
Trade relations between Sudan and Egypt have been strained since the middle of last year when Sudan banned Egyptian fruit and industrial goods imports. Egypt responded by preventing the entry of many goods that were crossing into its market without permission.
The Sudanese Minister of Trade Hatem Al-Sasser held talks in Cairo on Thursday with his Egyptian counterpart Tarek Kabil in the presence of the ambassadors of the two countries. The Sudanese minister is attending the Africa 2017 Forum, which kicked off in Sharm El-Sheikh on Thursday.
The Sudanese and Egyptian officials discussed how to implement trade agreements signed by the two countries and agreed to hold meetings that experts would participate in. The trade agreement is expected to be announced following these meetings.
In a press statement that he gave after the talks, Al-Sasser said that “strengthening and developing trade relations and increasing the volume of trade exchange with Egypt” is very important to political leaders in Sudan.
Kabil stressed that Egypt was keen to initiate and implement the agreements that were signed by the two countries and cooperate fully with Sudan.
Boost for Egypt-Sudan trade relations
Boost for Egypt-Sudan trade relations
GCC central banks hold interest rates steady for 3rd time following Fed’s move
RIYADH: Gulf Cooperation Council central banks have kept interest rates steady for the third consecutive period, mirroring the US Federal Reserve’s decision to hold its benchmark rate between 4.25 percent and 4.5 percent.
As most currencies in the region are pegged to the US dollar, monetary policy follows the decisions taken in Washington, with policymakers opting to lock the rate at the level it has been since December.
The freeze comes amid global uncertainty caused by the ongoing trade war, a slowing of economic growth in the US, and unstable inflation trends, according to a statement by the Federal Reserve.
The country’s gross domestic product fell 0.3 percent in the first quarter as a result of slower consumer and government spending and a surge in imports ahead of the tariffs.
The newly released Fed statement said: “In support of its goals, the Committee decided to maintain the target range for the federal funds rate at 4-1/4 to 4-1/2 percent. In considering the extent and timing of additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks.”
This decision implies that the Saudi Central Bank, also known as SAMA, will maintain its repo rates at the current level of 5 percent.
The UAE central bank also announced that it has decided to maintain the base rate applicable to the Overnight Deposit Facility at 4.40 percent.
Qatar, Kuwait, and Oman, as well as Bahrain, also mirrored the Fed’s move.
Repo rates, which represent a form of short-term borrowing primarily involving government securities, underscore the close economic ties and financial dynamics between the GCC countries and the global economic landscape, particularly the US.
“In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals,” the Federal Reserve’s statement said.
It added: “The Committee’s assessments will take into account a wide range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments.”
In April, Fitch Ratings said in a report that Gulf banks face minimal direct impact from new US tariffs but remain exposed to broader risks stemming from weaker oil prices and slowing global growth.
The agency noted at the time that most GCC exports to the US are hydrocarbons, which are exempt from the latest tariffs. Non-oil exports, such as aluminum and steel, which are subject to 10 percent or 25 percent duties, account for only a small share of the trade basket, limiting direct exposure for regional economies and their banking sectors.
GCC market capitalization surpasses $4.2tn, bloc’s secretary-general reveals
RIYADH: Capital markets across the Gulf Cooperation Council surpassed a combined capitalization of $4.2 trillion by the end of 2024, highlighting strong regional economies and sustained investor confidence.
The figure was revealed by Jasem Al-Budaiwi, secretary-general of the GCC, during his address at the third edition of the “Gulf Smart Investor Award” ceremony held in Riyadh on May 7.
In his remarks, Al-Budaiwi noted that GCC markets witnessed a total of 336.3 billion shares traded in 2024, marking a 20.9 percent increase compared to the previous year.
The total value of traded shares reached $682.2 billion, reflecting an annual growth of 28.4 percent.
These gains, he underlined, underscore the confidence of both domestic and international investors and reinforce the importance of continued efforts to build financial awareness and strengthen investor education.
Al-Budaiwi commended Saudi Arabia for hosting the awards and supporting the GCC’s broader economic agenda.
“His Excellency the secretary-general pointed out that amidst the astonishing acceleration and profound transformations taking place in financial markets globally and regionally, and in light of the GCC countries’ openness to the global economy, financial literacy is no longer merely marginal knowledge or an intellectual luxury,” an official release stated.
This positive momentum in GCC markets aligns with broader regional trends.
In the first quarter of 2025, stock markets across the Middle East and North Africa saw solid gains, with the Arab Monetary Fund’s Composite Index — tracking 16 Arab exchanges— rising 4.37 percent year-on-year.
The index also posted a 1.55 percent increase on a quarterly basis, reflecting continued investor confidence despite global monetary policy shifts and ongoing geopolitical pressures.
During his speech, Al-Budaiwi highlighted the central role of financial literacy in navigating increasingly complex and fast-evolving global financial markets, positioning it as a key factor in achieving financial security and long-term economic sustainability across the region.
The event, part of the GCC-wide investment literacy initiative known as Mulim, was attended by high-level officials, including Saudi Capital Market Authority Chairman Mohammed El-Kuwaiz.
Al-Budaiwi emphasized that the award serves not only as a recognition of individual excellence but also as a broader message advocating the role of financial knowledge, strategic planning, and a sound regulatory environment in fostering informed investment decisions.
He commended the efforts of the Saudi Capital Market Authority and partner institutions for their role in supporting initiatives that contribute to financial knowledge across GCC societies.
Earlier this week an analysis by S&P Global revealed the market capitalization of the Kingdom’s Tadawul All Share Index reached $2.7 trillion at the end of 2024, representing a 10-year rise of 463 percent.
The credit rating agency’s report said the stock market is expected to play a crucial role in materializing the Kingdom’s economic transformation goals outlined in Saudi Arabia’s Vision 2030 initiative.
Fitch affirms Jordan at ‘BB-’ with stable outlook as reform momentum builds
RIYADH: Jordan’s long-term foreign-currency issuer default rating has been affirmed at “BB-” with a stable outlook by Fitch, citing the country’s macroeconomic stability and progress in fiscal and economic reforms.
The US-based credit rating agency added that the grade, along with the stable outlook, also reflects Jordan’s resilient financing sources — including a liquid banking sector, a robust public pension fund, and continued international support.
Despite the stable outlook, Jordan’s credit rating remains lower than that of several other countries in the region. In February, Fitch affirmed Saudi Arabia’s IDR at “A+” with a stable outlook, while the UAE was rated “AA-.”
In its latest report, Fitch stated: “The ratings are constrained by high government debt, moderate growth, risks stemming from domestic and regional politics, and current account deficits and net external debt that are higher than rating peer.”
According to the agency, a “BB” rating signifies elevated vulnerability to default risk, particularly in the event of adverse changes in business or economic conditions over time, although some business or financial flexibility exists to support the servicing of financial commitments.
The report noted that Jordan’s government remains committed to advancing its three-pillar reforms across the economic, public administration, and political sectors, despite external pressures.
Fitch added that the pace of reform will continue to be influenced by the need to preserve social stability, resistance from vested interests, and institutional capacity constraints.
Jordan’s gross domestic product expanded by 2.5 percent in 2024, and Fitch projects growth of 2.7 percent in 2025 and 2.8 percent in 2026.
“This reflects our assumptions of headwinds from weaker global growth, partly balanced by recovery in tourism from Europe following an easing of regional conflicts. Iraq will remain a dynamic export market for Jordan and nascent trade with Syria could add further impetus,” the report said.
In April, the International Monetary Fund offered a similar projection, forecasting 2.7 percent growth in 2025, driven by a rebound in tourism and improved domestic demand.
Fitch also noted that the imposition of US tariffs and the resulting uncertainty will slow global demand, which is expected to impact demand for Jordanian exports.
Exports to the US accounted for 26 percent of Jordan’s total in 2024, including 27 percent from precious metals and stones — categories that are exempt from duties.
Apparel made up 56 percent of Jordan’s exports to the US, and this sector faces the risk of a 20 percent tariff.
According to Fitch, the general government deficit stabilized at 2.4 percent of GDP in 2024, amid higher interest payments and lower capital expenditure.
The agency projects the deficit will rise to 2.6 percent in both 2025 and 2026, as continued spending restraint is offset by growing interest costs.
The report further warned that persistent geopolitical risks could negatively impact Jordan’s credit profile, even as it benefits from strong multilateral and bilateral support.
“As tensions between Israel and Iran remain heightened and the war in Gaza continues, geopolitical risks remain high. Uncertainty remains regarding the course and duration of the conflict,” said Fitch.
Other factors that could weigh on Jordan’s credit rating include a weakening of support from external partners and a marked increase in external indebtedness.
Jordan is on track to receive disbursements under its four-year, $1.2 billion Extended Fund Facility with the IMF.
It has also entered into a new program with the EU, which includes €1 billion ($1.07 billion) in macro-financial assistance.
Fitch identified several factors that could lead to a rating upgrade, including a sustained decline in government debt as a share of GDP and a return to growth levels above pre-pandemic averages, resulting in lower unemployment.
US Fed sees rising risks to economy as it leaves rates unchanged
WASHINGTON: The Federal Reserve held interest rates steady on Wednesday but said the risks of higher inflation and unemployment had risen, further clouding the US economic outlook as its policymakers grapple with the impact of President Donald Trump’s tariffs.
At this point, Fed Chair Jerome Powell said, it isn’t clear if the economy will continue its steady pace of growth, or wilt under mounting uncertainty and a possible coming spike in inflation.
With so much unsettled about what Trump will ultimately decide and what of that survives possible court and political battles, “the scope, the scale, the persistence of those effects are very, very uncertain,” Powell said in a press conference at the end of a two-day policy meeting.
“So it’s not at all clear what the appropriate response for monetary policy is at this time ... It’s really not at all clear what it is we should do,” he said, adding: “I don’t think we can say which way this will shake out.”
It was Powell’s subtle way of saying the US central bank, a key actor in shaping the economy, was effectively sidelined until Trump’s sweeping policy agenda takes full effect.
The Fed’s policy statement, which held the benchmark overnight rate steady in the 4.25 percent-4.50 percent range, noted that since the central bank’s last meeting in March “uncertainty about the economic outlook has increased further,” and that risks were increasing that both inflation and unemployment could increase.
Thomas Simons, chief US economist at Jefferies, said the language downplayed just how much disruption had occurred since the Fed’s March 18-19 meeting, and how unpredictable the outlook had become.
“All of the ‘Liberation Day’ tariff news, the April 9 announcement of a 90-day delay, the back and forth on trade deals and tariff exemptions in the headlines, and the resultant negativity expressed in business and consumer surveys make it impossible to judge what the economic outlook is, let alone whether the skew of risks around it has changed,” Simons wrote, calling Powell “predictably noncommittal” given the situation.
Risks to dual mandate
The Fed’s statement, and much of Powell’s comments to reporters as well, vouched for the economy’s continued resilience, with job gains continuing and the economy still growing at a “solid pace.”
The recently reported decline in gross domestic product in the first quarter, Powell said, was skewed by a record rush of imports as businesses and households tried to front-run expected import taxes, with measures of domestic demand still growing. But even that data demonstrated the dilemma facing the Fed. The rush of front-loading to buy goods and stock shelves won’t likely be repeated, and it
is unclear whether underneath it all demand and investment are starting to weaken — and how that will eventually express itself in “hard” data on inflation and jobs. The Fed’s own “Beige Book” of anecdotal reports about the economy recently gave a dour picture of suspended business deals, falling demand, and rising prices.
“Businesses and households are concerned ... and postponing economic decisions of various kinds,” Powell said. “If that continues and nothing happens to alleviate those concerns, you would expect that to show up in economic data.” The Fed can’t respond, however, until it is clear which way the economy pivots, and how it assesses the risks to its two goals of holding inflation to 2 percent and sustaining maximum employment.
“The current stance of monetary policy leaves us well positioned to respond in a timely way to potential economic developments,” Powell said, affirming a wait-and-see approach that has become the central bank’s calling card in the first months of the Trump administration.
US stock prices extended gains after the release of the Fed’s unanimous policy decision and ended higher on the day. Treasury yields fell, while the dollar gained against a basket of currencies.
Holding pattern
The direction of Fed policy will depend on which of the job and inflation risks develop, or, in the more difficult outcome, whether inflation and unemployment increase together and force the central bank to choose which risk is more important to try to offset with monetary policy.
A weaker job market would typically strengthen the case for rate cuts; higher inflation would call for monetary policy to remain tight.
“For the time being the Fed remains in a holding pattern as it waits for uncertainty to clear,” said Ashish Shah, chief investment officer of public investing at Goldman Sachs Asset Management, adding that “recent better-than-feared jobs data has supported the Fed’s on-hold stance, and the onus is on the labor market to weaken sufficiently to bring a resumption of its easing cycle.”
The Fed’s policy rate has been unchanged since December as officials struggle to estimate the impact of Trump’s tariffs, which have raised the prospect of higher inflation and slower economic growth this year.
When policymakers last updated their economic and policy projections in March, they anticipated reducing the benchmark rate by half a percentage point by the end of this year.
Oil Updates — prices edge up on US-China trade talk hopes
TOKYO: Oil rose on Thursday after falling more than $1 in the previous session, supported by hopes of a breakthrough in looming trade talks between the US and China, the world’s two largest oil consumers.
Brent crude futures were up 10 cents, or 0.2 percent, at $61.22 a barrel, while US West Texas Intermediate crude rose 13 cents, or 0.2 percent to $58.20 a barrel at 9:32 a.m. Saudi time.
“Optimism around the US and China trade talks this weekend is a primary factor supporting the rebound in the oil market,” said independent market analyst Tina Teng.
“Signs of a de-escalating trade war improved market sentiment, triggering a rebound in oil prices in an oversold market.”
US Treasury Secretary Scott Bessent will meet with China’s top economic official on May 10 in Switzerland for negotiations over a trade war that is disrupting the global economy. The countries are the world’s two largest economies and the disruptions from their trade dispute are likely to lower crude consumption growth.
US President Donald Trump on Wednesday suggested China initiated the trade talks, adding he was not willing to cut US tariffs on Chinese goods to get Beijing to negotiations. Bessent said the upcoming talks are a start, not ‘advanced’ discussions.
Weak demand concerns capped oil price gains after the Federal Reserve held interest rates steady but warned about rising economic uncertainties.
“The Fed signalled that rates will likely remain on hold until the effects of tariffs become clearer. This boosted the US dollar, which added to headwinds facing the broader commodity markets,” said ING analysts in a report on Thursday.
A stronger US currency makes dollar-denominated oil more expensive for holders of other currencies and dampening demand.
Adding to the concerns of weaker demand, US gasoline inventories rose last week, stoking concerns among analysts that consumption is not building as the US enters the summer demand period later this month.
At the same time, the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, will increase its oil output, adding to pressure on prices.
