DUBAI: Iran’s rial traded near record lows against the dollar in the free market on Tuesday as Iranians tried to buy hard currency, fearing economic turmoil if US President Donald Trump withdraws from a deal on Iran’s nuclear program.
The dollar was selling for 65,000 rials, according to foreign exchange website Bonbast.com, which tracks the free market. That was down from 57,500 at the end of last month and 42,890 at the end of last year.
Economists inside and outside the country said the rial was being driven down by heavy demand for dollars among Iranians who feared a US pullout from the nuclear agreement would lead to the resumption of US sanctions against Tehran, deterring other nations in Europe and Asia from developing business ties.
This could constrict Iran’s foreign trade, causing a spike of inflation and further reducing access to hard currency in an economy which is already struggling with high unemployment and the threat of a crisis among financially troubled banks.
Mehrdad Emadi, an Iranian economist who heads energy risk analysis at London’s Betamatrix consultancy, said the approach of Trump’s decision was encouraging a mass flight out of the rial. On Sunday, the currency hit a record low of 67,800.
“This large scale de-rialization of the Iranian economy has now created a complete collapse of confidence,” Emadi said, adding that if the government did not take immediate steps to shore up the banking system and restore business confidence, the currency could fall as low as 110,000.
“Such a rate would translate to a tripling of the inflation rate and a deep dollarization of the Iranian economy, and barter-based transaction when hard currency cannot be found.”
Trump said he would announce on Tuesday whether he would withdraw from the nuclear deal, which eased international sanctions on Iran in exchange for Tehran limiting its atomic program.
A senior US official said it was unclear if efforts by European allies to address Trump’s concerns would be enough to save the pact, but European diplomats said privately they expected Trump to effectively withdraw from the agreement.
As pressure on the rial mounted in early April, Iranian authorities tried to halt its slide by saying they were unifying official and free-market exchange rates at a single level of 42,000, and banning any trade at other rates.
People who violated the ban were threatened with arrest. The strategy failed to stamp out the free market, however, because demand for dollars far exceeds limited supplies that authorities have provided through formal channels at the official rate.
“The free market has been shut down officially, but it continues its work unofficially. There is an underground currency market in Iran, with rates, charts and everything,” said an analyst in Tehran, declining to be named for legal reasons.
“Instead of stopping by at the exchange shop, people arrange their trade by phone calls and through underground channels.”
As part of its crackdown, Iran clamped a €10,000 ceiling on the amount of foreign currency that citizens can hold outside banks.
The Tehran analyst said this regulation was being widely disobeyed, and estimated billions of dollars were being held illicitly outside banks.
“The real dollar rate is much higher, and people know from the past that when they deposited their dollars into bank accounts, they were not able to withdraw later.”
Publicly, Iranian officials have blamed the rial’s weakness on a plot by the US and other nations. But the turmoil has had political repercussions in Tehran, where members of parliament have demanded the resignation of central bank governor Valiollah Seif.
The government was already under fire over its management of the economy. In January, public protests over corruption and economic hardship were crushed by the authorities and at least 25 people were killed.
Iran is running a substantial current account surplus, according to the International Monetary Fund, which estimates the government’s foreign assets and reserves at $112 billion.
With oil prices at multi-year highs, that may give Tehran enough firepower to prevent any collapse of the rial, if it chooses to satisfy the demand for hard currency and flood the free market with dollars.
But official economic data in Iran can be inaccurate, and some private economists estimate the amount of reserves which Tehran can easily access is much lower.
In March, the semi-official ISNA News Agency quoted Mohammad Reza Pourebrahimi, head of the economic committee in Iran’s parliament, as saying Iran had suffered capital outflows of $30 billion over four months.
Iran’s rial near record lows as Trump decision on nuclear deal looms
Iran’s rial near record lows as Trump decision on nuclear deal looms
- Economists inside and outside the country said the rial was being driven down by heavy demand for dollars among Iranians
- The Iranian government is already under fire over its management of the economy
Pakistan prequalifies four investors for PIA, greenlights Roosevelt Hotel joint venture deal
- Pakistani state-owned enterprises lose over $2.87 billion annually, total government support pushes burden past $3.59 billion
- PIA has roughly accumulated over $2.5 billion losses, while Roosevelt remains one of Pakistan’s most politically sensitive assets
KARACHI: Pakistan has prequalified four investors for the sale of Pakistan International Airlines (PIA), while its Cabinet Committee on Privatization (CCOP) has approved the transaction structure for the denationalization of the Roosevelt Hotel in New York under a joint venture, the ministry of privatization said on Tuesday.
Pakistan has been seeking to sell a 51-100 percent stake in the struggling national airline to raise funds and reform cash-draining, state-owned enterprises as envisaged under a $7 billion International Monetary Fund program. It would be the country’s first major privatization in nearly two decades.
Among the bidding groups, one is a consortium of major industrial firms Lucky Cement, Hub Power Holdings, Kohat Cement and Metro Ventures. Another is led by investment firm Arif Habib Corp. and includes fertilizer producer Fatima Fertilizer, private education operator The City School, and real estate firm Lake City Holdings. Additionally, Fauji Fertilizer Company, a military-backed conglomerate, and Pakistani airline Airblue, have been approved to bid for PIA.
“The prequalified parties will now proceed to the buy-side due diligence phase — a critical next step in the transparent and competitive privatization process of PIACL,” the privatization commission’s statement said.
PIA, once a respected carrier in Asia, has been propped up by taxpayers for decades due to political interference, corruption and inefficiencies. The airline’s privatization has repeatedly collapsed amid union resistance, legal hurdles and low investor appetite.
Pakistani state-owned enterprises post annual losses of more than Rs800 billion ($2.87 billion), and when subsidies, grants and other support are included, the burden swells beyond Rs1 trillion ($3.59 billion), Finance Minister Muhammad Aurangzeb told parliament while presenting the budget for fiscal year 2025–26 earlier this month.
PIA has been one of the government’s most costly liabilities, which has accumulated over $2.5 billion in losses in roughly a decade and been surviving on repeated bailouts that have weighed heavily on Pakistan’s strained budget.
Last month, five consortiums submitted expressions of interest for a 51–100 percent stake in PIA after the government restructured its balance sheet to make the deal more attractive. It also scrapped the sales tax on leased aircraft and is providing limited protection from legal and tax claims. Around 80 percent of the airline’s debt has been transferred to the state.
ROOSEVELT HOTEL
Separately, the CCOP approved the transaction structure for Roosevelt Hotel under a “Joint Venture model with multiple options.”
“This option is aimed at maximizing long-term value for the country, while ensuring flexibility, multiple exit opportunities, and minimizing future fiscal exposure,” the privatization commission said.
How much money the hotel ultimately brings in, and its overall valuation, depends on the type of transaction structure adopted, Privatization Commission Chairman Muhammad Ali told Arab News in an interview last month. If the government formed a joint venture with a private investor, sharing both the risks and future profits, the hotel could be worth four to five times more than its as-is valuation, he said at the time.
“So, depending on what sort of structure you have, how much risk you take, how much effort the government puts in, we can make a lot of money from this asset,” the privatization chief had said.
The Roosevelt, a 1,015-room historic hotel in Midtown Manhattan, has long been one of Pakistan’s most prominent but politically sensitive overseas assets. Acquired by Pakistan International Airlines Investment Limited (PIAIL) in 1979, the hotel occupies a full city block on Madison Avenue and 45th Street. Over the past two decades, successive Pakistani governments have floated plans to sell, lease, or redevelop the property, but no proposal has advanced beyond early-stage planning.
Operations at the Roosevelt were suspended in 2020 following steep financial losses during the COVID-19 pandemic. In 2023, Pakistan entered a short-term lease with the City of New York to use the property as a temporary shelter for asylum seekers, generating more than $220 million in projected rental income. That agreement ended in 2024 and no new revenue stream has since been announced.
The Roosevelt Hotel is one of several state assets the government hopes will contribute to its target of raising Rs86 billion ($306 million) in privatization proceeds during the fiscal year starting July 1, alongside the sale of PIA and three electricity distribution companies.
Foreign currency sukuk issuance projected to reach $80bn in 2025
- Foreign currency sukuk issuances rose 8.94% year on year to $41.4 billion
- Sustainable sukuk issuance surged 275 in the first half of 2025 to $9.3 billion
RIYADH: The global sukuk market is poised to maintain its strength in 2025, with foreign currency-denominated issuances expected to reach between $70 billion and $80 billion, according to a new report by S&P Global.
In the first half of 2025, foreign currency sukuk issuances rose 8.94 percent year on year to $41.4 billion, driven by increased activity in the UAE, Bahrain, and Kuwait. Saudi Arabia remained a key player, contributing 38.9 percent of the total market volume, as local banks continued to support Vision 2030-related initiatives.
Earlier this year, Fitch Ratings shared a similar outlook, forecasting that Saudi Arabia would remain a major driver of US dollar-denominated sukuk and debt issuance in 2025 and 2026. Banks in the Kingdom alone are expected to issue over $30 billion as institutions seek to diversify their funding sources.
The increase in global sukuk issuance came despite external headwinds, including new US tariffs and delayed interest rate cuts. S&P noted that issuers in core Islamic finance markets took advantage of brief periods of market stability to secure funding.
“We expect performance in the second half of the year to depend on the evolving geopolitical situation in the Middle East. However, since we don’t expect a full-scale regional war, we think the resilient foreign currency issuance trends observed in the first half will continue,” S&P Global said in the report.
“It will also be supported by the Fed’s expected reduction in interest rates. Therefore, we maintained our forecasts for foreign currency-denominated issuances to reach about $70 billion to $80 billion for the full year in 2025,” it added.
Foreign currency sukuk issuance had already climbed to $72.7 billion in 2024, a 29 percent increase from the previous year, supported by significant financing needs in Islamic finance hubs and fiscal pressures due to lower oil prices.
According to S&P, geopolitical tensions are not expected to significantly disrupt issuance this year. Instead, market activity will hinge on the direction of monetary policy, domestic liquidity conditions, and investment trends in key Islamic finance countries.
Local currency issuance
Despite the robust performance of foreign currency sukuk, total sukuk issuance globally fell 15 percent in the first half of 2025 to $101.3 billion. The decline was largely due to a steep drop in local currency sukuk, which fell to $59.8 billion from $81 billion a year earlier. Malaysia, Saudi Arabia, Qatar, and the UAE all reported weaker domestic issuance.
S&P attributed this to liquidity constraints in some markets and improved fiscal performance in others, reducing the need for domestic borrowing.
“For example, we have observed a significant drop in local currency issuances in Saudi Arabia, where banks’ liquidity is instead being channeled into financing Vision 2030. The drop was mainly underpinned by lower issuances from the government,” the agency said.
Shariah Standard 62
S&P also pointed to ongoing uncertainty surrounding the implementation of Shariah Standard 62 by the Accounting and Auditing Organization for Islamic Financial Institutions .
In April, AAOIFI announced amendments to the draft standard following industry feedback but did not provide details or a timeline.
The proposed guidelines aim to harmonize key elements of the sukuk structure, including asset backing, ownership transfer, and trading rules.
“The implementation process following the amendment is also uncertain. This means that it is now very difficult to determine the implications of adopting the new standard on market performance,” S&P noted.
“The need to issue prior to the adoption of the standard may also abate since issuers and investors no longer perceive the disruption as imminent,” it added.
Fitch Ratings had earlier warned that the standard could significantly reshape the sukuk market and potentially increase fragmentation if adopted in its current form.
Sustainable sukuk
Sustainable sukuk issuance surged 27 percent in the first half of 2025 to $9.3 billion, up from $7.4 billion in the same period last year, according to S&P.
Banks, led by the Islamic Development Bank, accounted for nearly half of the total, followed by corporates from the GCC and Malaysia. These instruments fund environmentally friendly projects such as renewable energy and green infrastructure.
Saudi issuers dominated the market, accounting for over 60 percent of total sustainable sukuk issuance. S&P attributed this to the alignment of Islamic finance with sustainability principles, the central role of the Islamic Development Bank, and strong funding demand from local banks.
In January, Fitch projected that outstanding ESG sukuk globally would exceed $50 billion in 2025, with Saudi Arabia playing a leading role.
The total value of ESG-focused sukuk climbed 23 percent year on year to $45.2 billion in 2024, according to Fitch.
In February, Saudi Arabia also raised €2.25 billion ($2.36 billion) through a euro-denominated bond offering under its Global Medium-Term Note Program, including its first green tranche.
Saudi chocolate industry expands as Riyadh leads in manufacturing registrations
- Riyadh region topped the list with 1,490 active commercial registrations
- Saudi chocolate market projects to reach $1.53 billion by end of decade
JEDDAH: Saudi Arabia’s cocoa and chocolate manufacturing sector is seeing growing entrepreneurial interest, with the number of active commercial registrations reaching 3,532 by the end of June.
A report by the Ministry of Commerce revealed that the Riyadh region topped the list with 1,490 active commercial registrations, followed by the Makkah region with 909 and the Eastern Province with 416. Al-Qassim and Madinah ranked fourth and fifth with 213 and 149 filings, respectively.
The chocolate manufacturing landscape in the Kingdom has evolved considerably, establishing itself as the largest producer among Gulf Cooperation Council countries, according to a release by Mordor Intelligence, a market research firm specializing in data-driven industry insights.
“The industry has shown remarkable progress in adopting advanced manufacturing technologies and sustainable practices, particularly in response to increasing consumer demand for premium chocolate products,” the release highlighted.
The analysis, published in May, indicates that Saudi Arabia had over 1,000 chocolate-producing facilities in 2023, with Riyadh accounting for around 35 percent of these production sites.
It also notes that the country’s chocolate market is segmented by confectionery variants — dark, milk, and white chocolate — and by distribution channels, including convenience stores, online retail, supermarkets, and others.
The report highlighted that this strong manufacturing base enables the country to produce around 50 percent of its chocolate domestically, thereby reducing reliance on imports while maintaining high-quality standards.
The firm estimates the Saudi chocolate market size at $1.23 billion in 2025 and projects it to reach $1.53 billion by the end of the decade, growing at a compound annual growth rate of 4.5 percent during the forecast period from 2025 to 2030.
“The Saudi Arabia chocolate market is experiencing significant transformation driven by changing consumer demographics and preferences. With over half the population under 25 years old as of 2023, the market is heavily influenced by younger consumers who are increasingly health-conscious yet maintain strong chocolate consumption patterns,” the Mordor Intelligence study stated.
It added that this demographic shift has led to interesting consumption patterns, with “studies showing that two-thirds of Saudi children consume chocolate twice daily in 2023.”
The firm believes that consumer spending patterns in the Kingdom’s chocolate market reflect the country’s growing affluence and changing preferences.
“In 2023, the annual chocolate expenditure per person in Saudi Arabia reached $41, significantly higher than the Middle Eastern average of $4. This high per capita spending is particularly noteworthy given that over 66 percent of consumers in Saudi Arabia claimed they were willing to pay more for quality products in 2022,” the analysis said.
The study noted that the trend toward premiumization has prompted chocolate manufacturers in the Kingdom to introduce more sophisticated product lines and innovative flavor combinations.
According to Mordor Intelligence’s global chocolate market analysis, the industry is experiencing a notable shift in consumption patterns, particularly in established markets where sophisticated consumer preferences are driving product innovation.
“Europe stands as a testament to this trend, processing 35 percent of the world’s cacao and accounting for 45 percent of global chocolate consumption in 2022. Switzerland leads this consumption pattern with an impressive chocolate consumption per capita of 11 kg in 2022, setting benchmarks for premium chocolate consumption globally,” the firm said in its release.
It added that this high consumption rate has encouraged manufacturers to expand their premium product lines and experiment with new flavors and formulations.
The company further reported that global chocolate demand is rising, driven by increased per capita consumption and a strong gifting culture. It added that Europe leads consumption, accounting for nearly 48 percent of the market, with the UK and Switzerland having the highest per capita rates.
Closing Bell: Saudi main index slips to 11,294
- Parallel market Nomu edged down by 119.05 points to close at 27,343.79
- MSCI Tadawul Index declined by 0.35% to 1,449.23
RIYADH: Saudi Arabia’s Tadawul All Share Index slipped on Tuesday, shedding 51.39 points, or 0.45 percent, to close at 11,294.07.
The total trading turnover on the benchmark index reached SR5.32 billion ($1.42 billion), with 65 stocks advancing and 187 declining.
The Kingdom’s parallel market Nomu also edged down by 119.05 points to close at 27,343.79, while the MSCI Tadawul Index declined by 0.35 percent to 1,449.23.
The best-performing stock on the main market was Arabian Centers Co., also known as Cenomi Centers, with its share price rising 7.60 percent to SR21.10.
Arabian Drilling Co. also gained 5.66 percent to close at SR88.60, while Tourism Enterprise Co. climbed 5.49 percent to SR0.96.
BAAN Holding Group Co. shares slipped 4.35 percent to SR2.42, ranking among the weaker performers of the day.
On the announcement front, Alinma Bank launched a US dollar-denominated sukuk under its Trust Certificate Issuance Program, with the offering opening and closing on July 8, according to a Tadawul filing.
The sukuk, which has a five-year maturity, requires a minimum subscription of $200,000, with increments in multiples of $1,000.
The bank noted that the sukuk will be listed on the International Securities Market of the London Stock Exchange, and issued in reliance on Regulation S under the US Securities Act of 1933.
Following the announcement, Alinma Bank’s share price declined 0.74 percent to SR27.
Meanwhile, Riyad Bank announced it had completed the issuance of US dollar-denominated Tier 2 trust certificates under its International Trust Certificate Issuance Program, with a total value of SR1.2 billion.
According to a Tadawul statement, the bank issued 6,250 certificates, each with a nominal value of $200,000. These certificates will also be listed on the London Stock Exchange’s International Securities Market.
Riyad Bank’s share price edged down 0.07 percent to close at SR28.88.
Saudi Arabia, Kuwait forge AI partnership to advance governance, innovation
- Deal aims to enhance cooperation on AI governance standards
- Partnership highlights both associations’ commitment to supporting regional initiatives
JEDDAH: Saudi Arabia and Kuwait have taken a significant step toward strengthening regional collaboration on artificial intelligence governance and innovation by forming a strategic partnership focused on advancing standards, research, and responsible development in the Artificial Intelligence of Things.
The Kingdom’s Artificial Intelligence Governance Association, which operates under the technical supervision of the Saudi Data and Artificial Intelligence Authority, has signed a memorandum of understanding with Kuwait’s Association of Artificial Intelligence of Things.
The agreement is aimed at enhancing cooperation on AI governance standards, promoting knowledge exchange, supporting scientific research, and driving innovation in the emerging AIoT sector.
A report by Boston Consulting Group published in April highlighted the Gulf region’s strategic prioritization of AI, noting that all GCC nations have launched national strategies to foster economic diversification and digital transformation.
The memorandum was signed by AIGA Chairwoman Dhabia bint Ahmed Al-Buainain and Sheikh Mohammed bin Ahmed Al-Sabah.
In a post on X, Al-Buainain said: “The agreement stems from a shared vision to enhance regional cooperation in artificial intelligence and its governance, and to build strategic partnerships that advance responsible and innovative AI policies and applications across the Gulf states.”
According to the BCG report, the UAE and Saudi Arabia are leading in infrastructure development and adoption, while Oman and Kuwait are working to expand their capabilities through global partnerships. However, the study pointed out that despite significant state-led investments, challenges remain in private sector funding, research output, and talent development, which hinder the region's ability to fully harness AI’s potential.
As reported by the Saudi Press Agency, the agreement marks AIGA’s first international memorandum of understanding, underscoring its intention to play a broader regional role in the responsible governance of advanced technologies.
The partnership highlights both associations’ commitment to supporting regional initiatives, strengthening governance frameworks, and fostering the exchange of expertise. It also aligns with national and regional objectives to develop knowledge-based economies fueled by emerging technologies.
In a statement, AIGA described the memorandum as a strategic move to deepen regional cooperation in AI governance. The signing ceremony was attended by senior officials from both organizations, along with representatives from SDAIA and AIGA.
Sheikh Mohammed bin Ahmed Al-Sabah, chairman of AAIOT, welcomed the agreement and described it as a “promising opportunity to exchange experiences and develop joint projects that serve the interests of our communities.”
He also emphasized that the deal supports efforts in both countries to advance AI capabilities according to the highest ethical and organizational standards.
AIGA underscored the importance of the memorandum, stating: “This agreement is particularly significant as it is the first international memorandum of understanding signed by the Artificial Intelligence Governance Association outside the Kingdom, representing a step toward expanding cooperation in the field of governance of responsible advanced technologies.”
The association added that the partnership aims to create new avenues for collaboration in setting AI governance standards, promoting research, and encouraging innovation in AIoT — all contributing to a more sustainable and ethically driven technological future.
