Deadline On Qatar Extended By 2 Days – Trump Calls Regional Leaders.
Saudi Arabia, the UAE, Bahrain and Egypt have extended the deadline for Qatar to meet their list of demands (previously due to expire today) by another 48 hours. The National newspaper said in an article this morning that the request for the extension had come from Kuwait, as Doha was due to hand over its response to Sheikh Sabah Al Ahmad Al Sabah today. In a statement published via the UAE state news agency, the four Arab allies said their reply will be sent after studying and evaluating the Qatari Government’s response to the complete list of demands. Meanwhile according to a White House statement, President Trump spoke to the leaders of Saudi Arabia, the UAE and Qatar yesterday during which “He reiterated the importance of stopping terrorist financing and discrediting extremist ideology. The President also underscored that unity in the region is critical to accomplishing the Riyadh Summit's goals of defeating terrorism and promoting regional stability," the statement read adding, "President Trump, nevertheless, believes that the overriding objective of his initiative is the cessation of funding for terrorism.”
Oil Prices Edge Higher On US Drilling Data.
Oil prices rose again slightly this morning as fresh data confirmed that drilling activity in the US has fallen for the first time since January. There is also speculation that we could see a surge in the consumption of US petrol this week due to the 4th of July holiday break which usually triggers a sharp increase in road traffic.
Morocco Delays Plan To Introduce A More Flexible FX Regime.
Morocco’s Prime Minister, Saadeddine El Othmani, made a surprise announcement yesterday in which he stated that the initial phase of a stepped program to shift towards the eventual free-float of the Dirham, which was originally set to begin this month, has been postponed. El Othmani said that the government was currently re-analyzing the plan to ensure there was an adequate time period for it to come into effect. He also did not suggest a revised start date, but claimed that once the program was implemented the value of the local currency would neither increase nor decrease by more than 2.50%. The Central Bank announced last year that the first stages of a gradual switch to a flexible exchange rate would be implemented from the second half of 2017, along with certain other monetary reforms such as inflation targeting. Last month the country’s Finance Minister blamed a recent US$4.4 bio drop in FX reserves on speculative activity ahead of this week’s anticipated start to the currency adjustment program.
Construction Firms In Qatar Prepare Contingency Plans.
According to an article published by the UK’s Telegraph newspaper, a number of western firms involved in the design and delivery of Qatar’s World Cup stadiums, including their related infrastructure, are allegedly preparing contingency plans if the current diplomatic crises should worsen further. The paper quotes a source at one unnamed firm as saying; “We have a team working on contingency planning. Should further sanctions come in companies will have to reassess their investment and their presence in Qatar, and if the risk profile changes we would take evasive action to protect our investments and our people.”
Abu Dhabi Exempted From US Laptop Ban.
Abu Dhabi is the first city to be officially exempted from the US ban on carrying laptops into aircraft cabins, due to the implementation of enhanced security measures at the UAE capital’s international airport. Abu Dhabi already has a US Customs and border facility at the airport which is also home to Etihad Airlines. The US laptop ban now applies to nonstop U.S.-bound flights from the international airports in Amman, Kuwait, Cairo, Istanbul, Jeddah, Riyadh, Casablanca, Doha and Dubai.
Egypt’s Banking Sector Has Attracted US$54 Bio Since Currency Float.
Egypt’s state-owned news agency quotes an unnamed CB official as claiming this morning that the country’s banking sector received US$25 bio in “financing packages,” US$20 bio in local US dollar sales and remittances from Egyptians abroad, and US$9 bio from financial investments, since the local currency was floated towards the end of last year. Meanwhile during the last few trading sessions we have noticed that the spot USD/EGP levels quoted on screen by most local banks has gradually started to edge lower, with most US$ bids now hovering below the 18.00 mark. This, in our opinion, is another indication that the backlog demand for dollars is decreasing and the supply of dollars in the interbank market is improving. More importantly, USD/EGP has potentially finally begun its downward trend, a situation which as per our previous comments on the subject we have been anticipating for some time. We will therefore be watching the NDF fixings closely over the coming days (in the last few weeks the NDF fixing rates have been steady between 18.05-18.10).
Total & CNPC Set To Sign New IPC Contract In Iran.
France’s Total and China’s CNPC are reportedly preparing to sign a 20-year contract to develop Iran’s south Pars gas field from 2021. "The international contract for development of Phase 11 of South Pars in the framework of the Iranian Petroleum Contract will be signed on Monday, July 3rd, at 14:30, at a ceremony in Tehran attended by Iranian oil minister Zanganeh and senior officials from France's Total, China's CNPCI and Iran's Petropars," a statement issued by the Iranian Oil Ministry and published by Reuters read this morning.
Orascom Wins Power Plant Contract In Egypt.
Orascom Construction, has been awarded a US$100 mio contract to build a 650MW steam-turbine power plant in Walideya Egypt.
Zambia’s Inflation Rate Rises.
Annual consumer inflation in Zambia increased to 6.80% last month from 6.50%. The primary drivers for the rise were attributed to higher electricity and food prices.
Tunisia Cuts Fuel Subsidies.
The Tunisian government hiked official fuel prices by 6.70% yesterday as it works to reduce its budget deficit, and in line with economic reforms outlined by the IMF. Unleaded petrol was increased to TND 1.75 per liter from TND 1.65.
Did you know that the first nuclear plant in Africa was a 50-KW research facility built in the Belgian Congo in 1959 by the General Atomic company of California and was a part of President Eisenhower’s “Atoms for peace” program to promote the non-military use of nuclear science?
Glenn Wepener, Executive Director & Geopolitical Analyst Middle East & Africa
National Bank of Abu Dhabi
Tel: +971 2 6110 127
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