Yemen food costs soar as currency plunges to new low

Yemen food costs soar as currency plunges to new low
A money changer holds bundles of Yemeni currency at an exchange shop in Sanaa, Yemen. (Reuters/File)
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Updated 04 November 2020

Yemen food costs soar as currency plunges to new low

Yemen food costs soar as currency plunges to new low
  • Aden central bank battles to control runaway exchange market

AL-MUKALLA: Yemen’s currency has tumbled to a record low against the US dollar despite fresh measures by the country’s central bank to bring the chaotic exchange system under its control.

The riyal hovered around 840 against the dollar early on Wednesday, plunging from 800 in recent weeks.

In an attempt to shore up the currency, the Aden-based central bank closed unlicensed exchange companies, banned the internal transfer network between exchange companies — known as hawala — and provided oil importers with dollars.

During a meeting with local moneychangers last month, central bank officials proposed initiating a formal method of transferring money under the bank’s supervision to replace the hawala system.

The bank’s measures helped the riyal to bounce back from 850 in September to 780 the same month before falling against the dollar to almost the same level on Wednesday. 

Despite the bank’s repeated threats to punish local exchange companies that failed to adhere to the measures, many firms continued to operate the hawala system, wiring millions of dollars and Saudi riyals internally away from the central bank’s observation, officials at local companies told Arab News.

While Houthi rebels imposed a fixed exchange rate for local companies in their territories and had observers monitoring daily transactions, the central bank in Aden has largely failed to enforce monetary policies.

“No one has adhered to the measures,” an official at an exchange company in the port city of Al-Mukalla told Arab News.

The official, who declined to be named, said that the latest measures highlight the growing competition between the central bank in Aden and the Houthi-controlled counterpart in Sanaa.

“It is like a match between the two central banks. Each is trying to bring financial activities in the country under its control,” the official said.

In addition to the raging conflict in Yemen, economists argue that printing billions of riyals in new banknotes over the past four years, a fall in foreign remittances as well as oil and gas revenues, and misspending the Saudi deposit in the central bank are main reasons for the currency’s fall.

Ali Bawazer, a Yemeni economist, said that the latest plunge in the riyal shows that the central bank has lost control of the exchange market.

“Moneychangers’ speculation has led to the fall of the riyal and central bank appeals have been unable to stop them,” he said.

Bawazer said that the central bank should ask new exchange companies to deposit $1 million instead of the current $500,000 before a license is issued.

However, moneychangers have denied any role in the fall of the riyal, demanding the central bank and government tighten their grip on the market.

Subhi Baghafar, a spokesperson for Moneychangers Association in Aden, said that the riyal steadied in September after local exchange companies injected millions of dollars into the cash-strapped central bank.

“We stopped all buying and selling of foreign currencies and linked oil importing consultations with the central bank,” Baghafar told Arab News.

“The central bank should inject an adequate amount of foreign currencies into the market to achieve a real balance between supply and demand. It should reopen all external funds for importers,” he said. 
Shrinking salaries

The fluctuating value of the riyal over the past five years has pushed up the cost of basic foodstuffs, fuel and rent, forcing many Yemenis to take more than one job to make ends meets.

Public servants who once boasted about their income are now battling to stay afloat since salaries have lost almost third of their value due to the falling riyal and a halt to annual bonuses.

Abu Abdullah, a government official from Al-Mukalla, told Arab News that in early 2015 his YR100,000 monthly salary used to cover all his family’s expenses with a few thousand riyals left to save.

“I used to have a decent life. Now the salary has not changed for years due to the suspension of annual bonuses. I spend the salary during the first half of the month,” he said.


Lebanon must fix debts, end prosecutor action or face power cut, says Turkish firm

Lebanon must fix debts, end prosecutor action or face power cut, says Turkish firm
Updated 11 May 2021

Lebanon must fix debts, end prosecutor action or face power cut, says Turkish firm

Lebanon must fix debts, end prosecutor action or face power cut, says Turkish firm
  • Turkey’s Karadeniz supplies electricity to Lebanon from power barges

ISTANBUL: Turkey’s Karadeniz, which supplies electricity to Lebanon from power barges, told Beirut to halt action by the Lebanese prosecutor to seize its vessels and said it must draw up a plan to settle arrears to avoid a cut in supplies, a spokesperson said.
The spokesperson for Karpowership, a unit of Karadeniz that operates floating power plants, was speaking on Tuesday after Lebanon’s Finance Ministry cited a lawmaker saying the country had been threatened with a cut to its supplies.
A Lebanese prosecutor issued a decision last week to seize the barges and fine the firm after TV channel Al-Jadeed reported corruption allegations tied to the power contract. The firm denies the charges and says it has not been paid for 18 months.


Suez Canal boss reveals expansion plans as revenues jump on trade rebound

Suez Canal boss reveals expansion plans as revenues jump on trade rebound
Updated 11 May 2021

Suez Canal boss reveals expansion plans as revenues jump on trade rebound

Suez Canal boss reveals expansion plans as revenues jump on trade rebound
  • Revenues rose almost 16 percent in April to $551million

RIYADH: Suez Canal revenues rose almost 16 percent in April to $551 million compared to a year earlier, Asharq Business reported, citing Suez Canal Authority Chairman Osama Rabie.
Rabie also discussed plans to expand and deepen the southern sector of the canal in which the container ship Ever Given was stuck in March, creating chaos across the global supply chain.
That incident which brought a large proportion of seaborne trade to a near halt for a week, highlighted the need to ensure the  smooth operation of the key trade artery.
Rabie also revealed plans for dredging works for the maintenance of the navigational channel of the canal.
A plan is being implemented to restructure the authority’s companies, he said.
This year witnessed a slight increase in the number of ships passing through the waterway to 1,840 in April 2021 from 1,731 in April 2020, Al Arabiya reported.


Egypt jobless rate rises amid pandemic second wave

Egypt jobless rate rises amid pandemic second wave
Updated 11 May 2021

Egypt jobless rate rises amid pandemic second wave

Egypt jobless rate rises amid pandemic second wave
  • The size of the workforce was estimated at 29,284 million, compared to 29,965 million during the previous quarter

RIYADH: Egypt’s unemployment rate reached 7.4 percent of the total labor force in the first quarter of 2021 — up from 7.2 percent in the previous quarter.
The new data from the Central Agency for Public Mobilization and Statistics (CAPMAS), reflects the impact of the second wave of the pandemic.
The size of the workforce was estimated at 29,284 million, compared to 29,965 million during the previous quarter, representing a decrease of 2.3 percent, Al Arabiya reported.
The labor force in urban areas reached 13,034 million, with 16,250 million living in rural areas.
Gehan Saleh, economic affairs adviser to Egypt’s prime minister said in April that the second stage of the country’s economic reform program would be launched soon.
She said the plan aims to improve the quality of life of citizens and tackle unemployment through job-creating investments.


Smugglers post gold from Dubai to India hidden in Tang

Smugglers post gold from Dubai to India hidden in Tang
Updated 11 May 2021

Smugglers post gold from Dubai to India hidden in Tang

Smugglers post gold from Dubai to India hidden in Tang
  • It is the latest ruse by smugglers trying to avoid hefty import duties for the precious metal by employing increasingly intriguing methods

DUBAI: Indian customs have foiled an attempt to post gold from Dubai disguised in containers of the popular Tang drink.

After sieving the contents of the drink mix, Chennai customs officials discovered it had been mixed with gold granules, according to a statement from the Commissioner of Customs at Chennai International Airport.
Officials probing the racket found that the address of the receiver had been misused.
It is the latest ruse by smugglers trying to avoid hefty import duties for the precious metal by employing increasingly intriguing methods.
Earlier this year officials at Chennai airport also nabbed two men trying to smuggle gold through the airport underneath their wigs.
The hapless pair were nabbed after their unusual hairstyles caught the attention of officials.

They were found to be carrying two gold paste packets weighing almost 700 g


UK-based tower operator to acquire Omantel sites in $575m deal

UK-based tower operator to acquire Omantel sites in $575m deal
Updated 11 May 2021

UK-based tower operator to acquire Omantel sites in $575m deal

UK-based tower operator to acquire Omantel sites in $575m deal
  • The move signals Helios Towers’ entry to the Middle East market as a major tower infrastructure provider

DUBAI: British telecommunications company Helios Towers has signed a deal with Omantel to acquire 2,890 sites for $575 million from the sultanate’s largest mobile network operator.
The move signals Helios Towers’ entry to the Middle East market as a major tower infrastructure provider.
The deal is expected to bring in a $59 million bump in revenues in the first full year of operations.
It also involves a $35 million plan to add 300 new build-to-suit sites over the next seven years.
“We view Oman as a very attractive and supportive market for foreign investments, with strong growth and exciting future prospects,” the UK-based company’s chief Kash Pandya said in a statement.
He said the acquisition strengthens its business through “further hard-currency revenues and diversification” in what the CEO described as the fastest growing markets in the region.
“We look forward to working with Omantel and the other MNOs over the coming years to further develop next generation mobile infrastructure solutions and services in Oman,” he added.
The partnership reflects Oman’s FDI aspirations, Omantel CEO Tala Said Al-Mamari said, adding it will create jobs and opportunities in the country.
“This move also allows the monetization of our towers at attractive valuation levels, de-lever our balance sheet, and will accelerate network development in next generation advanced technologies,” he noted.
He said it would allow Omantel’s management to focus on innovation and product development while outsourcing infrastructure management to an independent firm.
The transaction will close by the end of 2021, and the long-term partnership will last for an initial period of 15 years.