Qatar Offers Turkey $10Bn to Curb Lira’s Collapse

Qatar Offers Turkey $10Bn to Curb Lira’s Collapse
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Qatar Offers Turkey $10Bn to Curb Lira’s Collapse

Qatar Offers Turkey $10Bn to Curb Lira’s Collapse

Turkey’s Central Bank has received $10 billion from a currency swap agreement it secured with Qatar on Wednesday, according to the bank’s analytical balance sheet on Friday.

The bank announced on Wednesday it struck a deal to increase its currency-swap agreement with Qatar to $15 billion from five billion dollars, providing some much-needed foreign funding to reinforce its depleted reserves and shore up the Turkish lira.

Ankara had urgently appealed to Qatar and China about expanding existing swap lines, and to the United Kingdom and Japan about possibly establishing them.

As Turkey ran down its hard currency buffers this year, it lobbied Group of 20 nations to be included in swap lines like those the US has extended to other emerging economies.

The government has been on ongoing negotiations with G20 nations since April 10, without reaching any solution.

So far unable to reach arrangements with the central banks of G-20 nations, Turkey resorted to Qatar.

The agreement between both countries was concluded in 2018, when the lira lost 40 percent of its value.

Analysts attributed the swap negotiation crisis between the Turkish central bank and other central banks to the Turkish central bank’s lack of independence.

The US Federal Reserve has refused to negotiate with the Turkish Central Bank due to Erdogan's continued interference in the bank's policies.

President of the Federal Reserve Bank of Richmond Thomas Barkin earlier stated that the Federal Reserve had swapped lines with countries that have a relationship of “mutual trust” with the United States and the highest credit standards.

It has opened the taps for central banks in 14 countries to access dollars. These are Australia, Brazil, South Korea, Mexico, Singapore, Sweden, Denmark, Norway and New Zealand, Canada, England, Japan, Switzerland, and the European Central Bank.

In this context, Turkey’s Banking Regulation and Supervision Agency (BDDK) has announced it would exempt Euroclear Bank and Clearstream Banking from recently-imposed limits on lenders’ lira transactions with foreign financial institutions.

This step is aimed at protecting the clearing of lira-denominated bonds and Sukuk and ensuring Turkish lira securities are traded efficiently, the BDDK noted.

The country’s 12-month foreign debt obligations are $168 billion, with about half due by August, while disappearing tourism income has inflated its monthly current account deficit to nearly $5 billion.

Last week, the Central Bank lowered its one-week repo rate by 50 base points, in line with market expectation.

A statement said the bank's Monetary Policy Committee had decided to reduce the policy from 8.75 percent to 8.25 percent.

Since the beginning of this year, the bank has cut the rate by a total of 375 basis points.

In 2019, the bank reduced the rate gradually by 1,200 basis points to 12 percent from 24 percent.



Saudi Arabia: Global Mining Needs $6 Trillion in Investments to Meet Demand

Saudi Minister of Industry and Mineral Resources Bandar Al-Khorayef speaks at the start of the event. (Asharq Al-Awsat)
Saudi Minister of Industry and Mineral Resources Bandar Al-Khorayef speaks at the start of the event. (Asharq Al-Awsat)
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Saudi Arabia: Global Mining Needs $6 Trillion in Investments to Meet Demand

Saudi Minister of Industry and Mineral Resources Bandar Al-Khorayef speaks at the start of the event. (Asharq Al-Awsat)
Saudi Minister of Industry and Mineral Resources Bandar Al-Khorayef speaks at the start of the event. (Asharq Al-Awsat)

The global mining industry requires $6 trillion in investments over the next decade to meet rising demand, presenting a major challenge for the sector. This figure was revealed by Saudi Minister of Industry and Mineral Resources Bandar Al-Khorayef during an international meeting of mining ministers.

The announcement underscores the mining sector’s appetite for investments, coinciding with Saudi Arabia’s increasing focus on making mining the third pillar of its national industrial strategy.

The meeting was part of the Future Minerals Forum hosted by Saudi Arabia under the theme “Creating Impact,” which gathered representatives from nearly 90 countries and over 50 organizations. The conference highlighted the vital role of mining in Saudi Arabia and the global economy.

Key topics discussed included boosting value addition in mineral-producing countries and developing green metals using advanced technologies and renewable energy.

The ministerial meeting facilitated the signing of several memorandums of understanding aimed at strengthening international partnerships and advancing Saudi Arabia’s mining and minerals sector.

In 2022, Saudi Arabia increased its estimated untapped mineral wealth from $1.3 trillion to $2.5 trillion, a move intended to support the Kingdom’s efforts to diversify its economy.

Global mining investments

In his opening remarks, Al-Khorayef stated that the global mining industry would need investments of $6 trillion over the next decade to meet growing demand, particularly driven by the global energy transition. He emphasized that metals are the foundation of supply chains and are essential for meeting the increasing demand for critical materials.

The minister also stressed the importance of continuing three initiatives launched at last year’s conference, namely, the International Framework for Critical Minerals, a network of centers of excellence to build mining expertise in the Middle East, and a priority-based approach to supply chain development.

He proposed forming a ministerial-level steering committee to oversee these initiatives and called on multilateral organizations to develop a roadmap to mitigate investment risks and enhance collaboration.

In remarks to Asharq Al-Awsat on the sidelines of the conference, Al-Khorayef said that Saudi Arabia is working closely with Arab countries, particularly those with established mining sectors like Morocco, Jordan and Egypt.

The minister highlighted the need for regional integration in mining, as companies often operate across multiple areas, stressing that mining is a key component of Saudi Vision 2030, particularly as the world shifts toward sustainable energy solutions and technologies that require large quantities of minerals.

Yonis Ali Guedi, Djibouti’s Minister of Energy and Natural Resources told Asharq Al-Awsat that his country had signed a new cooperation agreement with Saudi Arabia to enhance collaboration in the mining sector and exchange training expertise. The agreement also includes resource-sharing and highlights Djibouti’s need for Saudi investments, he added.

The minister underlined the significant role Saudi companies could play in developing Djibouti’s mining sector, while also acknowledging progress in local industries. On a broader level, Guedi pointed to the growth of Africa’s mining sector and underscored the importance of maintaining this momentum to meet global demand.

Focus on critical minerals

In comments to Asharq Al-Awsat, Julius Maada Bio, Sierra Leone’s Minister of Mines and Mineral Resources, said that financing remains the greatest challenge for his country’s mining sector.

Exploration of critical minerals, he explained, requires significant investments with high risks, a challenge faced by many African nations. Bio underscored the importance of improving Sierra Leone’s infrastructure and value chain capabilities, from exploration to processing, and expressed interest in leveraging Saudi expertise in mining.

He added that Sierra Leone is seeking to strengthen international cooperation to create a comprehensive framework for critical minerals, with a focus on sustainability.

Malaysia’s Minister of Natural Resources, Environment, and Climate Change Nik Nazmi Nik Ahmad highlighted that the key challenge for his country’s mining sector is its technological gap. He noted that advanced technologies for producing and processing rare earth minerals are concentrated in a few major countries, limiting Malaysia’s competitiveness in global markets.

The minister also pointed to geopolitical tensions disrupting global supply chains, which has complicated matters for countries like Malaysia that rely on trade with both China and the United States.

Despite these challenges, Ahmad stated that his country is working to boost its domestic processing capabilities for rare earth minerals, aiming to reduce its reliance on raw material exports.

Yemeni Minister of Minerals Dr. Saeed Al-Shamasi emphasized Yemen’s valuable mineral resources, including lithium, which is essential for batteries and renewable energy technologies. Yemen also holds reserves of copper and other strategic minerals.

He called for urgent foreign investments to develop the sector, given Yemen’s lack of advanced infrastructure. Al-Shamasi also highlighted Yemen’s efforts to strengthen cooperation with Saudi Arabia, noting the establishment of a Saudi-Yemeni Business Council to facilitate investment across various sectors.

International agreements

During the ministerial meeting, Al-Khorayef signed cooperation agreements with six countries: Djibouti, the United Kingdom, Jordan, Zambia, Austria and France. These agreements aim to strengthen international partnerships and advance the Kingdom’s mining sector.

The accompanying exhibition featured cutting-edge technologies and innovations in mining, promoting global collaboration to achieve sustainability in the sector.

Meanhwile, two global alliances, including local and international companies, won exploration licenses for six mining sites in Saudi Arabia during the seventh round of mining competitions, according to the Ministry’s statement on Tuesday.