Qatar offers Turkey relief by tripling FX swap line to $15bn

The lira touched a historic low earlier this month as investors fretted over a drop in the central bank’s net FX reserves and the country’s relatively high foreign debt obligations. (Reuters)
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Updated 20 May 2020

Qatar offers Turkey relief by tripling FX swap line to $15bn

  • Ankara had been urgently seeking access to funds from Doha and elsewhere to head off a potential currency spiral
  • Turkey’s central bank said the deal with its Qatari counterpart would support financial stability and trade

ISTANBUL: Turkey secured a tripling of its currency-swap agreement with Qatar to $15 billion, the central bank said on Wednesday, providing some much-needed foreign funding to reinforce its depleted reserves and help steady the Turkish lira.
Ankara had been urgently seeking access to funds from Doha and elsewhere to head off a potential currency spiral, and analysts say tens of billions of dollars might be needed. A senior Turkish official told Reuters talks are continuing.
Turkey’s central bank said the deal with its Qatari counterpart — which raised the existing FX limit from the equivalent of $5 billion — would support financial stability and trade.
The lira touched a historic low earlier this month as investors fretted over a drop in the central bank’s net FX reserves and the country’s relatively high foreign debt obligations, accelerating Ankara’s overseas funding search.
Reuters reported last week that officials from Turkey’s Treasury and central bank had appealed to counterparts in Qatar and China about expanding existing swap lines, and to the United Kingdom and Japan about possibly establishing them.
Turkey has a roughly $1.7 billion swap facility with Beijing.
“Talks on swaps are continuing and especially some are in a very positive situation. We expect positive results from them soon as well,” the senior Turkish official said before the central bank’s announcement.
The official, who requested anonymity, characterized some of the conversations as ongoing and others as on hold.
The lira has rallied over the last eight trading days on expectations of new funding that would stem earlier selling in the lira that some analysts said risked escalating as in 2018, when Turkey’s currency crisis shook emerging markets.
It was down 0.2% to 6.795 versus the dollar at 0822 GMT on Wednesday.
The Turkish central bank said the amendment of the limit on the 2018 swap agreement with Qatar’s central bank aimed to “facilitate bilateral trade” in local currencies and “support financial stability of the two countries.”
Under the facility, the central bank in Doha would accept Turkish lira in exchange for Qatari riyals.
Turkey has moved on from its preferred source of dollar funding, the US Federal Reserve, which appears unlikely to extend a swap line based on comments from current and former Fed officials.
Tatha Ghose, analyst at Commerzbank, said the lira rallied on speculation about deals with Tokyo and London, but added that swaps are a “secondary story” to prospects of a rebound in Turkish exports now that European economies are re-opening from coronavirus-related lockdowns.
Stronger export numbers would “dispel the lira’s current woes, although many problems will remain in the longer-term,” he wrote in a client note.
Net FX reserves at the central bank have fallen to $26 billion from $40 billion this year, in part due to state bank FX interventions to help stabilize the lira, analysts say. Turkey’s 12-month foreign debt obligations are $168 billion.


INTERVIEW: Abeer Al-Fouti sees Alwaleed delivering global response to COVID-19 pandemic

Updated 11 July 2020

INTERVIEW: Abeer Al-Fouti sees Alwaleed delivering global response to COVID-19 pandemic

  • Abeer Al-Fouti explains how the philanthropic world has come together in the COVID-19 era

DUBAI: Charity begins at home, they say, but in the era of the world pandemic such a domestic-focused approach is neither desirable nor effective.

That is why several global philanthropic organisations, and big name donors, have come to the fore in the course of the COVID-19 crisis to offer financial, practical and logistics support to those people in the world whose governments do not have the means to extend assistance to their entire population.

Perhaps the best known is Bill Gates, the American entrepreneur who has pledged to give away his entire multi-billion dollar fortune to beat the virus. Other eminent entrepreneurs have also given billions in the attempt to find an elusive vaccine or effective treatment.

But Saudi Arabia has its own famous philanthropist in the shape of Prince Alwaleed bin Talal, the Kingdom Holding magnate, who has for many years been dispensing charity via his organization Alwaleed Philanthropies.

Abeer Al-Fouti runs the global side of that enterprise and is convinced that only a global approach will work in the face of the biggest health challenge for nearly a century.

“The simple message is that actually COVID-19, despite all the challenges, whether economic, or emotional or health or luck, has one important lesson that we have all learned, or should learn: That we are one world, we are one.

“If you think selfishly, it is going to come back and haunt you anyway. So this is the time when we all need to come together and think we are one. Otherwise, we are all going to go down together,” she told Arab News.


As one of the ambitious young women coming to prominence as part of the Vision 2030 strategy of female empowerment, she obviously takes great pride in her work.

“This year we’re celebrating 40 years of our existence. If I can summarize it in numbers, we’ve been working for four decades in six continents, serving 200 countries with 355 global partners. We’ve finished 1,000 projects and spent over $4 billion, and we reached one billion beneficiaries across the world. That’s our latest update. And it’s all run by 10 Saudi females from Riyadh,” she said.

Alwaleed Philanthropies plays a major role in charitable giving within the Kingdom, supporting organizations and individuals across the spectrum of community development, health, education and empowerment. But Al-Fouti’s responsibilities are more global.

“I believe philanthropy pays a major role in filling the gap, with a regional platform bringing the government and private sector together, and focusing on those who maybe the system does not serve or does not cover. This is why His Royal Highness called us together, to do our research and then to explain who we think we should support,” she said.


“We decided to focus on those that were most vulnerable in the Arab world, in the Middle East and Africa,” she said.

Fighting the pandemic has been the main focus for the organization since the virus broke on the world earlier this year. In April, Alwaleed Philanthropies gave an extra $20 million to provide medical and economic help to poorer countries during the pandemic, bringing its total COVID-19 support to $30 million, on top of its usual budget.

“In these times of unprecedented crisis it is more important now than ever that we pull our resources together in the battle against COVID-19. With many developed nations struggling to cope with the COVID-19 pandemic, we must spare a thought for the developing countries of Africa and the less fortunate countries in the Middle East,” Prince Alwaleed said then.

“I’m sure you know it’s in the DNA of our culture and our religion — giving and charity. Everyone is required to give as part of the culture,’ Al-Fouti added. Alwaleed’s work runs alongside an equally generous program of charitable initiatives funded by the government of Saudi Arabia for projects both within the Kingdom itself and the rest of the world.


Maintaining the international partnerships that have been cultivated over the decades is a vital part of her work. The Gates Foundation, Gavi, the vaccination organisation, the World Health Organization and the United Nations are important allies in the global sphere.

“We have criteria for selection, and mainly we want to work with partners that are credible and share common values, and those which have long-term impact, in addition to other criteria. We have a detailed list of criteria and we tick those which have compatibility, reliability and credibility. We have to ensure that the money we give will reach those in need,” she said.

Another important ally is the Islamic Educational, Scientific and Cultural Organization, ISESCO, which has partnered with Alwaleed on many regional projects.

“We support initiatives in 200 countries, regardless of gender, race or religion — as long as they have shared values,” she explained.

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BIO

Born: Alkhobar, Saudi Arabia

Education: Bachelor’s and master’s degrees in health and hospital administration, King Saud University

Career: Various roles in government and private sector in human development, management and public relations

- CEO Al-Khair

- Partner, RVCC property development

- Co-founder, Smile Productions

- Executive manager, Global initiatives, Alwaleed Philanthropies

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Those initiatives fall into four main categories. Community development involves work on essential infrastructure — housing projects, employment initiatives and educational opportunities to help achieve the UN’s sustainable development goals.

Second comes empowerment initiatives for women and young people. In partnership with international institutions such as the UN, Alwaleed works to enhance opportunities for underprivileged women across the Middle East and Africa and to advance the interests of the big youthful demographic in the region. “We want people to become self-sufficient and empowered, Al-Fouti said.

For example, Alwaleed was a leading partner in the Turquoise Mountain project in Afghanistan, which sought to revive traditional craft industries in the war-ravaged country, providing employment for thousands of women and young people and helping to restore traditional buildings for use as medical and educational facilities.

Next comes disaster relief, again often in conjunction with UN organizations. Alwaleed played an active role in helping Albania to recover from the recent earthquake there, for example.

Finally, there is what Al-Fouti regards as her “favourite” work — the initiatives to “bridge cultures” through educational and cultural activities in several countries. Alwaleed is involved in projects in the Louvre in Paris and with Berlin Museum to explain Islamic culture to Europeans.

“We believe the best way for people to understand each other is through art and culture. We’re planning to work this year with all our educational centres, and with the Louvre and Berlin, to see how we can revisit this strategy and see how we can have more impactful projects in terms of bringing people together,” she said.

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READ MORE: Alwaleed Philanthropies, ICESCO MoU to help 10 African countries

Prince Alwaleed pledges $30m to fight pandemic

How Louvre-Saudi Islamic cultural ties are promoting peace and tolerance

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But the reaction to the pandemic has understandably taken up a lot of the organization’s time this year.

“We decide to get in and minimize or control the spread of the virus by strengthening local capabilities, for example through or work with ISESCO. In Africa they asked us to provide them with masks and with alcohol cleaning products. We decided that we were also going to go in and create or scale up factories, get jobs going and make the initiative available and sustainable, and this is what we are doing,” Al-Fouti said.

Through the collaboration with Gavi, Alwaleed has been able to bring medical relief to remote areas in the region. One of the repercussions of the pandemic has been that other essential medical projects, such as polio vaccination or routine immunization for children, have been scaled back drastically, partly because of travel restrictions but also because of the pressure on funds.

“In some places when people were being asked to stay at home, some didn’t have a home to go to. They were asked to wash their hands and they didn’t have water. That’s why we invested in areas where we thought there is a gap,” Al-Fouti explained.

So, those 10 women in Riyadh have the support and back-up of hundreds of partners around the world, with a global perspective in the midst of the COVID-19 crisis.

“We have partners and embedded collaborative relationships that we consider to be an extension of our team. So we are not alone. There is a saying ‘work smart, not hard.’ But we work hard as well. In fact, we really do work hard,” she said.