BAGHDAD: Iraq’s Central Bank on Saturday announced it will devalue the Iraqi dinar by over 20 percent in response to a severe liquidity crisis brought on by low oil prices, a measure that has sparked public outrage as the government struggles to cover its expenses.
Riot police were dispatched outside the central bank headquarters in central Baghdad prior to the announcement in the event news of the devaluation sparked protests. A leaked draft of the state budget law for 2021 caused furor on the Iraqi street last week as it confirmed plans to devalue the dinar.
The new rates represent a dramatic reduction from the previous official rate of 1,182 IQD. It is the first reduction in exchange rates that the Iraqi government has made in decades.
In a statement, the Central Bank set the new rate for the dinar, which is pegged to the US dollar, at 1,450 IQD when selling to the Iraqi Finance Ministry. The dinar will be sold to the public at 1,470 IQD and to other banks at 1,460 IQD.
The devaluation raised the prospects of the dinar weakening further on the street. The rate has already risen to 1,400 IQD per US dollar on Saturday, up from 1,300 IQD last week, at currency exchange agents.
“I stopped exchanging currency,” said Abo Abed, who works at a currency exchange in the Karrada neighborhood of the capital. He turned away a customer with a $100 bill, saying he could only sell at the old rate of 1,300 IQD. “Who knows, tomorrow it could be 1,800 IQD.”
Since an oil price crash earlier this year, Iraq has been grappling with an unprecedented liquidity crisis. The crude-exporting country has had to borrow from the bank’s dollar reserves to pay the nearly $5 billion in monthly fees for public salaries and pensions. Oil revenues, which account for 90% of the budget, have brought in an average of $3.5 billion.
Efforts to introduce reforms have been met with opposition and to date, the government has been borrowing internally to foot state bills.
A devaluation would give oil-rich Iraq, which imports nearly all of its goods, more dinars in hand to make urgent payments. But setting a new rate has been a delicate balancing act to satisfy the government’s needs for liquidity without impacting the average Iraqi.
The Finance Ministry is responsible to allocate salary payments to public workers, the largest working force in Iraq and among the most disgruntled by the new currency measures.
The bank justified the devaluation saying it was the product of “intense deliberations” with the prime minister, finance minister and lawmakers, and stressing the reduction in the dinar’s value would be a one-time occurrence.
“It must be emphasized here that this change (reduction) in the value of the Iraqi dinar will be one-time only and will not be repeated,” the statement said. “The Central Bank will defend this price and its stability with the support of its foreign reserves,” which it maintained are still at stable levels.
The bank blamed poor economic policies over the last decade. It said it had “no choice but to intervene” as poor economic planning and fiscal policies from Iraqi politicians have reduced Iraq to a crude-exporting state with the bulk of state expenditures going toward paying a bloated public sector.
The devaluation drew the ire of public sector workers. Many fear a weakened dinar, as well as plans proposed in the budget to cut salaries and impose taxes, will amount to pay cuts.
While taking a step toward austerity, the proposed state budget for 2021 also calls for record spending projecting a deficit of nearly $40 billion. A Cabinet session to vote on the law was postponed to Sunday.
From there, it will be voted on by lawmakers, a challenging task as the cuts are considered wildly unpopular ahead of next year’s nationwide elections.
“It will be very difficult (to pass),” said lawmaker Sarkawt Shamseddine. “In order to to convince MPs to vote for this big bill the government has to show it has other plans ... to increase revenues. That’s the strategy.”
Prime Minister Mustafa Al-Kadhimi called for early elections to take place one year earlier than scheduled on June 2021, in line with demands of anti-government protesters.
Iraq’s central bank devalues dinar by 22% amid public anger
https://arab.news/c7jxj
Iraq’s central bank devalues dinar by 22% amid public anger
- Since an oil price crash earlier this year, Iraq has been grappling with an unprecedented liquidity crisis
- A devaluation would give Iraq, which imports nearly all of its goods, more dinars in hand to make urgent payments
Four Seasons Beirut to reopen in 2026 after reconstruction
JEDDAH: The Four Seasons Hotel in Beirut is set to reopen in the first quarter of 2026 after undergoing a comprehensive rehabilitation, according to a statement from Kingdom Holding Co.
“On the occasion of a new era for Lebanon, and under the leadership of His Excellency President Joseph Aoun, I am pleased to announce that the Four Seasons Hotel, Beirut, which Kingdom Holding built, will be entirely reconstructed and refurnished by Kingdom Beirut S.A.L and will reopen to the public in Q1 of 2026,” Prince Al-Waleed bin Talal, chairman of KHC, wrote on his X account on Tuesday.
Prince Al-Waleed further noted that the hotel, located adjacent to Beirut’s Zaitunay Bay marina, would be upgraded to the highest international standards. The revamp is expected to position the property as one of the premier urban resorts worldwide.
The timing of the announcement follows recent diplomatic developments, including a call from Saudi Crown Prince Mohammed bin Salman to congratulate Lebanon’s new president, with an invitation to visit the Kingdom.
The Four Seasons Beirut was severely damaged in the 2020 Beirut Port explosion, which devastated much of downtown Beirut, an area once popular with Gulf tourists.
The region has since been affected by geopolitical tensions, including Hezbollah’s involvement in the Syrian war and its support for Houthis in Yemen.
Four Seasons, one of the world’s leading luxury hotel chains, has been privately owned by KHC and Cascade Investment, the investment vehicle controlled by Bill Gates, since 2007. Both KHC and Cascade own 47.5 percent stakes in the company, with the remaining 5 percent held by Triple Holdings, which represents Four Seasons’ founder, Isadore Sharp, according to KHC’s website.
KHC’s relationship with Four Seasons dates back to 1994, when the company first recognized the brand’s potential and invested in a minority stake through a private equity deal.
Saudi Arabia, Pakistan to announce major collaborations in mining, minister reveals
RIYADH: Saudi Arabia and Pakistan are set to announce major collaborations in the mining sector, with a particular focus on copper and gold assets, according to a top official.
Speaking to Arab News on the first day of the Future Minerals Forum 2025, taking place in Riyadh from Jan. 14 to 16, the South Asian country’s Minister for Petroleum Musadik Malik explained that the two nations are also exploring collaboration prospects in additional sectors including energy, food security, and industrial.
This falls in line with Pakistan seeking to strengthen trade and investment ties with the Kingdom, whose leadership reaffirmed its commitment this year to expedite a $5 billion investment package for the country.
“Well, we are hoping and expecting the year 2025 to be a year of big announcements, particularly between the Kingdom of Saudi Arabia and Pakistan. As you know, we are in advanced stages of conversations about a very large asset, and we have done all the homework that was needed. We’ve done the commercial due diligence, we’ve done the legal deed due diligence. We’ve done the financial due diligence. Both sides have come up with valuation frameworks,” Malik said.
“In mining, it’s going to be the mining assets, particularly the copper mining assets, copper and gold mining assets. So, we are very hopeful about that,” he added.
The senator said the valuation ranges are in place, and both teams are now empowered to negotiate.
“Right now, we are under non-disclosure, so I can’t give you the details, but suffice to say that we are expecting very big announcements very soon,” Malik said.
“In the industrial areas, as you know, there are about $2 billion worth of commercial MoUs (memorandums of understandings) and contracts already signed between the Saudi companies and Pakistani companies, and many of them have become the actual contracts, and the trade has started. So, that’s a big chunk of commercial activity as well as industrialization activity,” he added.
“We also have ongoing conversations about very large energy projects, in terms of refineries and so on and so forth. So, it depends upon whether it’s food security. We have things going on, whether it’s commercial trade, there are things going on, whether there’s industrial activity and investments there are things going on,” the senator said.
Malik went on to highlight the benefits of the ministerial roundtable held at the Future Minerals Forum, which saw participation from 89 countries.
“I think the most interesting and intriguing part of this ministerial roundtable is that everyone is focused on the future. We’re not just talking about right now. It’s almost like we’re sitting together and writing the history of future. That’s what we are trying to do,” he said.
“We are thinking not just about where the assets are, but we are also thinking about where how these assets are going to create value and we are not only limited to creating value, but we are also thinking about value capture. So, from asset to value creation to value capture, everything is getting discussed, and it’s getting discussed in a manner which ensures sustainability of mining,” he added.
The senator also highlighted the growing focus on sustainable mining, communities, the circular economy, and how resource-rich countries are positioning themselves to participate in downstream activities, capture value, and navigate the geopolitics and emerging industrial policies shaping the future.
“All of those very healthy discussions are taking place right now. But if you talk about the end game, the end game is to ensure that there’s a sustainable world, that the world is carbon neutral,” Malik said.
Saudi-Finland ties hold ‘almost unlimited potential,’ says Finnish minister
RIYADH: Mining presents significant opportunities for collaboration between Saudi Arabia and Finland, a senior Finnish minister stated, emphasizing the “almost unlimited potential” of their bilateral relationship.
In an interview with Arab News on the sidelines of the Future Minerals Forum in Riyadh on Jan.14, Wille Rydman, Finland’s minister for economic affairs, highlighted that Saudi Arabia’s partnership with Finnish companies could play a key role in achieving sustainability within the Kingdom's mineral sector.
Saudi Arabia already enjoys a robust relationship with Finland in the energy sector. In October 2024, the two countries signed a memorandum of understanding to accelerate collaboration in areas such as clean power technologies, stable electricity systems, and climate change mitigation solutions.
“I think that there is almost unlimited potential in our bilateral trade relations. As we are now meeting here in the Future Minerals Forum, the focus is heavily on the mining industry. And I think that’s one of the arenas where our countries can cooperate even deeper in the future,” Rydman said.
He added: “Finnish companies are very known for their sustainability, their ability for doing (a) sustainable mining industry. I’m very confident that they can also give a lot of know-how and business potential for Saudi Arabia’s mineral sector.”
Rydman further emphasized that Finnish collaboration in the mining sector would assist Saudi Arabia in meeting its energy transition targets. Strengthening the industry, he noted, is essential for achieving these goals, as minerals are crucial for the electrification of societies.
“It’s been globally very well recognized how important a role critical raw materials are playing in the future energy transition, and how important it is to maintain those critical supply and value chains when it comes to minerals and mining industry,” the minister explained.
He also pointed out that Saudi Arabia’s Vision 2030, which includes objectives like responsible mining and the use of green energy, presents valuable opportunities for Finnish companies to operate within the Kingdom.
“The aims and targets that Saudi Arabia has put for itself are actually kind of targets and aims where Finnish companies have been succeeding very well, especially when it comes to the mining industry, responsible mining, green energy, green and clean transition. And that’s why I think that Finnish companies entering Saudi Arabian markets can help Saudi Arabia to reach those targets,” Rydman said.
The minister also extended an invitation to Saudi investors to explore opportunities in Finland.
ACWA Power expands in China with $312m in renewable energy deals
RIYADH: Saudi Arabia’s ACWA Power has solidified its position in China’s renewable energy sector with two major agreements valued at $312 million.
These agreements mark a significant step in the company’s global expansion strategy and underscore its commitment to driving the country’s clean energy transition.
The deals include a 132-megawatt solar photovoltaic portfolio in Guangdong province and a 200-megawatt wind energy project, according to a company statement. Both projects are central to ACWA Power's broader strategy in China, which was launched in 2023 to support the nation’s renewable energy goals.
Marco Arcelli, CEO of ACWA Power, expressed enthusiasm about the developments: “This is a significant milestone for ACWA Power in China, establishing our operational presence in renewable energy and water desalination. We are committed to working alongside our Chinese partners to contribute to the country's clean energy and water transition.”
Arcelli further emphasized the company’s long-term vision: “We are not only investing in renewable energy projects but also in Chinese expertise and building enduring relationships within the country.”
The solar project, ACWA Power’s first collaboration at the asset level with its long-term supply chain partner Sungrow Renewables, will span three separate sites in Guangdong. Additionally, the wind energy agreement, which was signed with Mingyang Smart Energy Group — a leading wind turbine manufacturer — opens the door for joint investments in China’s rapidly expanding wind sector.
ACWA Power’s formal entry into China’s renewable energy market was announced in December 2024, with the company planning to develop projects exceeding 1 gigawatt across multiple provinces.
Mohammad Abunayyan, founder and chairman of ACWA Power’s board of directors, commented: “Our entry into China’s renewable energy market represents a key milestone in our global strategy for a sustainable future. Our growth is not just about adding megawatts; it’s about forging lasting partnerships that accelerate the energy transition and create a cleaner, more prosperous world for future generations.”
These projects are part of an initial phase that will see ACWA Power expand its portfolio to more than 1 gigawatt of capacity in China. This move aligns with the company’s long-term ambition to triple its assets under management to approximately $250 billion globally by 2030.
Closing Bell: Saudi main index gains 0.52% to close at 12,173
RIYADH: Saudi Arabia’s benchmark Tadawul All Share Index rebounded on Tuesday, rising by 62.81 points, or 0.52 percent, to close at 12,172.75.
The index saw a total trading turnover of SR6.10 billion ($1.63 billion), with 150 stocks advancing and 87 declining.
The Kingdom’s parallel market also posted gains, rising by 82.65 points to finish at 31,317.09. The MSCI Tadawul Index increased by 0.50 percent, closing at 1,517.21.
The day’s biggest gainer was Nice One Beauty Digital Marketing Co., with its share price surging 9.81 percent to SR54.30.
Other notable performers included Americana Restaurants International PLC – Foreign Co., which rose 9.01 percent to SR2.42, and Fawaz Abdulaziz Alhokair Co., which gained 8.08 percent to SR15.78.
On the downside, Savola Group saw its share price drop by 2.23 percent, closing at SR37.35.
On the announcements front, Al Jouf Cement Co. announced that recent adjustments to fuel prices in Saudi Arabia would lead to a 10.1 percent increase in production costs.
The company said the impact would be reflected in its financial performance for the first quarter of 2025. As a result, Al Jouf Cement’s share price declined by 0.92 percent, closing at SR10.74. KnowledgeNet Co. revealed that it had signed a SR3.12 million contract with Beltone Securities Brokerage, Beltone Securities Holding, and Beltone Fixed Income to provide financial brokerage and custody services.
The deal will see KnowledgeNet replace its existing systems with the TradeNet Back Office System and TradeNet Custody System, which the company believes will improve the efficiency of its operations. KnowledgeNet’s share price rose by 1.60 percent, closing at SR35.
Ataa Educational Co. also announced that its shareholders had approved a 12.5 percent cash dividend, totaling SR1.25 per share, for the financial year ending July 31, 2024. Despite the dividend approval, the company’s share price fell by 0.27 percent, closing at SR74.50.
