Turkey-Iran central banks ‘agree to trade in local currencies’

Turkish Prime Minister Binali Yildirim (R) and Iran's First Vice President Eshaq Jahangiri (L) shake hands as they hold a joint press conference at Cankaya Palace in Ankara on October 19, 2017. (AFP)
Updated 19 October 2017
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Turkey-Iran central banks ‘agree to trade in local currencies’

ISTANBUL: Turkey and Iran’s central banks have formally agreed to trade in their local currencies, Prime Minister Binali Yildirim said on Thursday in a move aimed at increasing bilateral trade.
Under the deal, the Iranian rial and Turkish lira will be easily converted to help reduce the costs of currency conversion and transfer for traders. The countries had been using euros.
“Trading with local currencies is the most significant step to improving economic ties. The central banks of both countries agreed on this issue and they will inform other banks about how the deal will be applied,” Yildirim told a joint news conference with Iran’s First Vice President Eshaq Jahangiri.
“Trading in local currencies will be encouraged and this will contribute to making trading easier and increase the trade volume and diversity,” Yildirim added.
Earlier this month, Turkish President Tayyip Erdogan said the deal was aimed at raising Turkish-Iranian trade volume to $30 billion from current $10 billion.
The deal is in line with Iran’s efforts to dodge unilateral US sanctions, which remain intact despite the lifting of international financial sanctions on Tehran last year under a 2015 nuclear deal between Iran and six major powers.
US banks are still forbidden to do business with Iran.
European lenders also face major problems, notably with rules prohibiting transactions with Iran in dollars — the world’s main business currency — from being processed through the US financial system.
Iran has secured banking ties with only a limited number of smaller foreign institutions as major foreign banks are wary of the US sanctions.
“This is an important step to expand the level and volume of trade cooperation between Iran and Turkey,” Jahangiri told the joint news conference.


Dubai regulators move against Abraaj Capital

Updated 22 min 12 sec ago
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Dubai regulators move against Abraaj Capital

  • Dubai regulators have implemented a winding up order against Abraaj Capital stopping it from doing any new business in the emirate’s financial center
  • The DFSA said it has also stopped Abraaj Capital from moving funds to other parts of the group

DUBAI: Dubai regulators have moved against Abraaj Capital, the UAE arm of the beleaguered private equity group, implementing a winding up order against it and stopping it doing any new business in the emirate’s financial center.

The Dubai Financial Services Authority, the regulatory arm of the Dubai International Financial Center (DIFC), announced the moves after the DIFC Courts earlier this month received a petition to wind up the troubled firm under UAE insolvency laws.

The court has appointed two liquidators from the accounting firm Deloitte to oversee the winding up order.

“The DFSA will continue to take all necessary actions within its remit to protect the interests of investors and the DIFC,” the regulator said in a statement.

 

The DFSA also said it has stopped Abraaj Capital from moving funds to other parts of the group.


The DFSA has been monitoring events at the company since the scandal at Abraaj broke in February, involving redirection of investment funds to purposes for which they were not intended.

Only a relatively small part of Abraaj’s operations fall under the remit of the DFSA. Most of its business and assets are located in the Cayman Islands, the domicile for its ultimate holding company Abraaj Holdings Limited (AHL) and its main operation business Abraaj Investment Management. The Cayman entities are also going through liquidation procedures.

The DFSA said: “Given the onset of financial difficulties of the wider Abraaj Group, the DFSA has been closely monitoring the activities of its regulated entity ACL. The DFSA has taken regulatory actions over the past few months in order to safeguard the interests of investors and the DIFC.

“Given such actions and the current matters surrounding the Abraaj Group, the DFSA continues to monitor the limited financial services activities currently being undertaken by ACL,” it added.

ACL was authorized to conduct various financial services from DIFC, including managing assets and fund administration, but restricted to funds established by the firm or members of its group.

It could also advise on financial products, arranging deals in investments, and arranging and advising on credit.

It is unprecedented for the DFSA to comment on a case while it is still under investigation, but the application in the DIFC Courts on Aug. 1 presented an opportunity to address investors and DIFC members who were concerned about the scandal, which some observers believe has been damaging for Dubai’s reputation as a regional financial hub.

FACTOID

The Dubai Financial Services Authority has been monitoring events at Abraaj since a scandal emerged involving redirection of investment funds to purposes for which they were not intended.