Saudi Arabia, South Africa to Discuss Agreements on Technologies, Green Economy, Hydrogen

South Africa’s ambassador to Saudi Arabia, Mogobo David Magabe, speaks during an interview with Asharq Al-Awsat. (Photo: Ali Zaheri)
South Africa’s ambassador to Saudi Arabia, Mogobo David Magabe, speaks during an interview with Asharq Al-Awsat. (Photo: Ali Zaheri)
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Saudi Arabia, South Africa to Discuss Agreements on Technologies, Green Economy, Hydrogen

South Africa’s ambassador to Saudi Arabia, Mogobo David Magabe, speaks during an interview with Asharq Al-Awsat. (Photo: Ali Zaheri)
South Africa’s ambassador to Saudi Arabia, Mogobo David Magabe, speaks during an interview with Asharq Al-Awsat. (Photo: Ali Zaheri)

A senior South African diplomat said that negotiations were underway to sign cooperation agreements with Saudi Arabia that would cover various sectors, including agriculture, industry, green economy, climate and technology.

In an interview with Asharq Al-Awsat, South Africa’s ambassador to the Kingdom, Mogobo David Magabe, said that his country was determined to advance its agricultural, industrial and mining cooperation with Saudi Arabia in the coming period, along with the green economy, climate and technology.

He stressed that he was looking forward to the influx of large Saudi investments, especially in the energy sector.

Saudi Arabia maintains its position as the second largest export market for South Africa in the GCC region, after the UAE, with total bilateral trade approaching USD 40 billion in 2021, according to the ambassador.

He added that in 2021 total exports to the Kingdom amounted to USD 3.3 billion, while total imports reached USD 36.5 billion.

According to Magabe, South Africa and Saudi Arabia were renowned for their progress in the field of digital technologies; therefore bilateral cooperation in this field would further enhance this reputation.

“We are also exploring new areas of economic cooperation, especially in investment, agriculture, tourism, transportation, health, and the exchange of experiences in various fields such as mining,” he underlined.

The South African ambassador noted that his country and Saudi Arabia enjoyed strong bilateral relations at the strategic level, after the formalization of diplomatic ties in 1994.

He pointed to the role of the Joint Economic Commission (JEC) in driving the partnership between the two countries.

Magabe said that the most important South African exports to Saudi Arabia included edible fruits and nuts, citrus and melon peels, oilseeds and oleaginous fruits, organic compounds and chemicals, machinery and mechanical devices, nuclear reactors, boilers, aluminum and iron or steel equipment.

As for Saudi exports to South Africa, those include mineral fuels, mineral oils and distillation products, bituminous materials, plastics, fertilizers, organic chemicals, salt, sulfur, stone, plastering materials, cement, aluminum products, chemical products, inorganic chemicals, and organic or inorganic compounds from precious metals, rare earth metals and copper.

On the impact of the Russian-Ukrainian crisis on the economy, energy and food in his country, Magabe said: “South Africa has adopted a non-aligned position on the war and we continue to call for a peaceful solution. Indeed, the conflict has negatively affected the country’s economy and the average citizen in South Africa, especially with regard to the daily needs of food and energy.”



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
TT

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.