Egypt gets $500m from Qatar, says $500m from Turkey soon

Updated 29 December 2012
0

Egypt gets $500m from Qatar, says $500m from Turkey soon

CAIRO: Egypt has received a final $500 million instalment of funds promised by Qatar and will get another $500 million from Turkey at the end of January, its finance minister said, in the latest aid to help balance its budget and defend its currency. 
Egypt has been facing a financial crisis as a month of political strife has cast doubts on the government’s ability to push through unpopular spending cuts and tax hikes needed to persuade the International Monetary Fund to agree to a $ 4.8 billion loan.
Finance Minister Mumtaz Al-Saeed said Egypt had received the final instalment out of a total of $2 billion promised by Qatar, although he did not give a date.
“Egypt will receive the remaining $500 million of the Turkish loan at the end of January,” he added.
Egypt has spent more than $20 billion in foreign reserves to support the Egyptian pound since the uprising that toppled Hosni Mubarak in early 2011.
Reserves fell by $448 million in November to reach $ 15 billion at the end of the month, equal to only about three months of imports.
The political turmoil has led to a run on the pound, with many investors and ordinary citizens rushing to convert into foreign currencies on concern the government might be forced to allow a sharp devaluation.
On Thursday, the central bank allowed the pound to weaken to an eight-year low of 6.188 to the US dollar.
Qatar said in August it would deposit $2 billion with Egypt’s central bank in four $ 500 million instalments to help support the budget, and later that month Egypt said that it had received a first tranche.
Egypt said in October that Turkey had would lend it $1 billion in two tranches, also for budget support, with one tranche coming in October and the second in January.
In June, before Mohamed Mursi of the Muslim Brotherhood was elected president, Egypt said Saudi Arabia had sent $1.5 billion in budget support as part of a $ 2.7 billion aid package.
“We are still negotiating the remainder of the Saudi aid package,” Saeed said.

 


Iran sanctions shadow falls on smaller German banks

Updated 27 May 2018
0

Iran sanctions shadow falls on smaller German banks

  • Some German companies plan to press on with Iran dealings
  • German exports to Iran rose 15.5 percent last year

Germany’s biggest lenders have shied away from business with Iran after past penalties for breaching US sanctions, but smaller banks have leapt on opportunities afforded by the nuclear deal rejected by Donald Trump.

There are just months to go until a November deadline issued by Washington after the US president abandoned a hard-fought agreement that loosened business restrictions on the Islamic Republic in exchange for Tehran giving up its pursuit of nuclear weapons.

But some firms plan to press on in their dealings with Iran despite the looming threat of penalties.

“We will continue to serve our clients,” for now, said Patrizia Melfi, a director at the “international competence center” (KCI) founded by six cooperative savings banks in the small town of Tuttlingen in southwest Germany.

The center, which supports companies operating in sensitive markets like Iran or Sudan, has seen demand “rising sharply in the last few years, from firms listed on the Dax (Germany’s index of blue-chip firms), from all over Germany and from Switzerland,” she added.

German exports to Iran have grown since the nuclear deal was signed in 2015, adding 15.5 percent last year to reach almost €2.6 billion ($3.0 billion) after 22-percent growth in 2016.

Such figures remain vanishingly small compared with Germany’s €111.5 billion in exports to the US — its top customer.

Nevertheless, the KCI will “wait and see what the sanctions look like” before turning away from Iran, Melfi said.

Already, firms dealing with Tehran must take great care not to fall foul of US restrictions.

Transactions are carried out in euros, and the KCI does not deal with businesses that have American citizens or green card resident holders on their boards.

What’s more, products sold to Iran cannot contain more than 10 percent of parts manufactured in the US.

One of the most important inputs for the business is “courage among our managers” given the high risks involved, Melfi said.

Germany’s two biggest banks, Deutsche Bank and Commerzbank, avoid Iran completely after being slapped with harsh fines in 2015 over their dealings there, with Deutsche alone paying $258 million in penalties.

DZ Bank, which operates as a central bank for more than 1,000 local co-op lenders, is withdrawing completely from payment services there, a spokesman told AFP.
That left KCI to seek out the German branch of Iranian state-owned bank Melli in Hamburg.

Even that linkage could break if Iran’s biggest business bank appears on a US list of barred businesses as it has before.

Meanwhile, among Germany’s roughly 390 Sparkasse savings banks, business with the regime is mostly limited to producing documents linked to export contracts.
“We will be looking even more closely at those” in the future, a person familiar with the trade told AFP.

Elsewhere in the German economy, the European-Iranian Trade Bank (EIH) founded in 1971 is another conduit to Tehran.

Also based in Hamburg, it for now remains “fully available to you with our products and services,” the bank assures clients on its website, although “business policy decisions by European banks may result in short term or medium term restrictions on payments.”

Neither does the Bundesbank (German central bank) believe that much has so far changed for business with Iran.

“Only the European Union’s sanctions regime will be decisive,” if and when it is changed, the institution told AFP.

Any payment involving an Iranian party would have to be approved by the Bundesbank if things return to their pre-January 2016 state.

German banking lobby group Kreditwirtschaft has called on Berlin and other EU nations to clarify their stance — and to make sure banks and their clients are “effectively protected against possible American sanctions.”

KCI’s Melfi said time is running out for EU governments to act.

“Many firms just want to stop anything with Iran, since they can’t calculate the risk of staying,” she noted.

On Friday for the first time since the Iran nuclear deal came into force in 2015, China, Russia, France, Britain and Germany gathered in Vienna — at Iran’s request — without the US, to discuss how to save the agreement.

FACTOID