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Saudi: GAMI Signs MoUs to Establish Military Industrial Facilities

Representatives of Saudi General Authority for Military Industries (GAMI), Ministry of Industry and Mineral Resources, and the Royal Commission of Jubail and Yanbu (RCJY) sign the agreements (Asharq Al-Awsat)
Representatives of Saudi General Authority for Military Industries (GAMI), Ministry of Industry and Mineral Resources, and the Royal Commission of Jubail and Yanbu (RCJY) sign the agreements (Asharq Al-Awsat)
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Saudi: GAMI Signs MoUs to Establish Military Industrial Facilities

Representatives of Saudi General Authority for Military Industries (GAMI), Ministry of Industry and Mineral Resources, and the Royal Commission of Jubail and Yanbu (RCJY) sign the agreements (Asharq Al-Awsat)
Representatives of Saudi General Authority for Military Industries (GAMI), Ministry of Industry and Mineral Resources, and the Royal Commission of Jubail and Yanbu (RCJY) sign the agreements (Asharq Al-Awsat)

Saudi Arabia has concluded a number of agreements to establish military industrial facilities to help stimulate the industry and enable the local manufacturing of military products.

The Saudi General Authority for Military Industries (GAMI) signed two memoranda of cooperation with the Ministry of Industry and Mineral Resources, and the Royal Commission of Jubail and Yanbu (RCJY) to stimulate, empower, and localize military industries in the Kingdom. 

The agreements provide a comprehensive governance of supply chains for the military and civil industrial sector, enhance coordination, and unify efforts and effective joint action to support the development of military industries.

The governor of GAMI, Ahmed al-Ohali, stressed the importance of localizing the military industry and called for enhancing joint operation between all parties to ensure the sustainability of the sector and raise levels of transparency and efficient spending.

Under this agreement, local and international manufacturers will have the appropriate investment environment to build Saudi Arabia’s targeted industrial capabilities, according to Ohali.

He noted that this will lead to a large supply chain that serves the military and civil industrial sectors.

Deputy Minister of Industry and Mineral Resources Osama al-Zamil stressed that GAMI will govern and unify the procedures of factories that manufacture both civil and military products.

Zamil also indicated that cooperation and coordination will be ensured to serve the supply chains of military industries, promote local content, and provide incentives for investment.

The deputy minister noted that the agreements will be established after determining the requirements for issuing industrial licenses to military factories, and customs exemptions for production in the military industries sector.

Military expert retired Major General Mohammed al-Ghamdi indicated that such cooperation is vital.

Ghamdi told Asharq Al-Awsat that the cooperation between the Authority, the Ministry, and the Royal Commission in Jubail and Yanbu increases the Kingdom’s military power and contributes to the localization of the military industry, which is one of Vision 2030’s goals.

The expert stressed that such a step enhances Saudi Arabia's strategic independence and raises its military and security preparedness.

He added that increasing levels of coordination and joint efforts will contribute to establishing successful military industrial facilities.

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Dollar Steadies ahead of Trump Inauguration

A teller sorts US dollar banknotes inside the cashier's booth at a forex exchange bureau in downtown Nairobi, Kenya February 16, 2024. REUTERS/Thomas Mukoya/File photo
A teller sorts US dollar banknotes inside the cashier's booth at a forex exchange bureau in downtown Nairobi, Kenya February 16, 2024. REUTERS/Thomas Mukoya/File photo
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Dollar Steadies ahead of Trump Inauguration

A teller sorts US dollar banknotes inside the cashier's booth at a forex exchange bureau in downtown Nairobi, Kenya February 16, 2024. REUTERS/Thomas Mukoya/File photo
A teller sorts US dollar banknotes inside the cashier's booth at a forex exchange bureau in downtown Nairobi, Kenya February 16, 2024. REUTERS/Thomas Mukoya/File photo

The US dollar steadied on Thursday despite the sharp fall in US bond yields after Wednesday’s inflation data as market focus shifted to Donald Trump’s presidential inauguration next week and possible inflationary impact of his policies.

Meanwhile the yen rose against the dollar and the euro as investors expected the Bank of Japan to hike rates next week.

The US dollar index - a measure of the value of the greenback relative to a basket of foreign currencies - was up 0.1% at 109.12.

"Markets are cautious before the inauguration because there is still policy uncertainty," said Paul Mackel, global head of foreign exchange research at HSBC.

"If the risk of US tariffs begins to materialize, the dollar will get another lift," he added, Reuters reported.

The highlight of the day should be the nomination hearing of Trump's choice of Scott Bessent to head the Treasury Department.

Bessent, who will face questioning before the US Senate Finance Committee, is expected to keep a leash on US deficits and to use tariffs as a negotiating tool, mitigating the expected inflationary impact of economic policies expected from the Trump administration.

The US inflation curve "has a well-identifiable 40 bps 'hump' over the next 12 months, which is near-identical to the estimated impact of a 5% universal and 20% China tariff starting as soon as Trump gets in office," said George Saravelos, head of forex research at Deutsche Bank.

"The market is pricing quick but moderate tariffs," he added. "We see risks of slower but bigger tariffs."

Traders who have been growing more worried about inflation responded with relief to Wednesday's US data, buying stocks and sending benchmark 10-year Treasury yields down more than 13 basis points. The currency reaction was more muted.

Analysts flagged that the US consumer price data was better than expected, but still showing inflation above Federal Reserve targets. The figures provided the US bond market with an excuse to do some downside testing for yields, but such a move is unlikely to go far.

"We still think that it will be easy for the Fed to remain on hold for now and wait for more data and fiscal policy clarity," said Allison Boxer, an economist at PIMCO, adding that US data did not change their forecasts for core inflation.

"We expect this to be the message (Fed) Chair (Jerome) Powell aims to communicate at the January meeting."

There was little direct reaction in foreign exchange markets to the ceasefire deal in Gaza, though the Israeli shekel did touch a one-month high on Wednesday.

The yen rose 0.46% against the dollar, after hitting 155.21, its lowest level since Dec. 19. It was up 0.51% against the euro at 160.19.

Recent remarks from Bank of Japan Governor Kazuo Ueda and his deputy Ryozo Himino have made clear that a hike will at least be discussed at next week's policy meeting and markets see about a 79% chance of a 25 basis point increase, while pricing 50 bps of rate hikes by year-end.

"Yen strengthened on expectations for a rate hike, but now the focus is on what BOJ officials will say about the monetary policy outlook," HSBC's Mackel argued.

"They could signal a more gradual path for the future, which could limit yen gains."

Japan's annual wholesale inflation held steady at 3.8% in December on stubbornly high food costs, data showed on Thursday.

"Expectations of a BOJ hike and perhaps fears of more forex intervention in the 158/160 area have helped the yen outperform," said Chris Turner, head of forex strategy at ING.

"We expect that to continue into next week's BOJ meeting. However, dips may exhaust in the 153/155 area," he said.

The euro was up 0.05% at $1.0294.

Sterling dropped sharply against the yen and also weakened versus the dollar and the euro on Thursday as investors focused on monetary policy divergence after last week's selloff in gilts and the pound.

China's yuan, seen on the front lines of tariff risk, was pinned near the weak end of its trading band at 7.3468 throughout the Asia session.