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Dollar Steady as Traders Weigh Escalating Iran War, Ceasefire Hopes

US dollar banknotes are seen in this illustration taken March 24, 2026. (Reuters)
US dollar banknotes are seen in this illustration taken March 24, 2026. (Reuters)
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Dollar Steady as Traders Weigh Escalating Iran War, Ceasefire Hopes

US dollar banknotes are seen in this illustration taken March 24, 2026. (Reuters)
US dollar banknotes are seen in this illustration taken March 24, 2026. (Reuters)

The dollar was steady on Monday, while the yen flirted with the crucial 160 per dollar level, as nervous investors took stock of the escalating Iran war, with all eyes on the latest deadline from US President Donald Trump to reopen the Strait of Hormuz.

In an expletive-laden Easter Sunday social media post, Trump threatened to target Iran's power plants and bridges on Tuesday if the strategic waterway is not reopened, setting a precise deadline of 8 p.m. Tuesday Eastern Time (0000 GMT).

With most of Asia and Europe closed for holiday on Monday, liquidity is likely to be thin, with investor focus on the possibility of a ceasefire after a media report suggested a last-ditch push from negotiators was underway.

"Trump's latest deadline itself is bearish not because investors think war is guaranteed tomorrow if ‌Iran does not ‌open the strait, but because every new ultimatum makes the disruption look longer, ‌stickier ⁠and more macro-negative," ⁠said Charu Chanana, chief investment strategist at Saxo in Singapore.

The euro was at $1.1523, while sterling last fetched $1.3211. The dollar index, which measures the US currency against six rivals, was slightly lower at 100.12.

The Australian dollar was 0.3% higher at $0.69045, wobbling near the two-month low that it hit last week.

In the kind of mixed messaging that has baffled supporters, foes and financial markets alike, Trump told Fox News on Sunday that Iran was negotiating, with a deal possible by Monday.

Axios reported the US, Iran and regional mediators are discussing terms of a potential 45-day ceasefire that could ⁠lead to a permanent end to the war.

Global markets have been rattled since ‌the US-Israel war on Iran broke out at the end of February, ‌with Tehran effectively closing the Strait of Hormuz, a key waterway that is a thoroughfare through which about a fifth ‌of the world's total oil and liquefied natural gas passes.

"If the strait is reopened fully around that ‌time (Trump's Tuesday deadline), oil will fall sharply and risk will rally hard," said Prashant Newnaha, senior rates strategist at TD Securities.

"However, if the US escalates, expect global markets to reprice sharply. It's wait-and-watch in what's turning out to be a binary event."

The closure has caused oil prices to surge well above $100 per barrel, stoking fears of high inflation and upending rates outlooks across the ‌world. Worries about the hit to economic growth have also weighed as stagflation risks swirl.

Traders are now no longer pricing a move from the Federal Reserve ⁠well into the second ⁠half of 2027, compared with expectations of two rate cuts in 2026 at the start of the year.

Data last week suggested US labor market conditions remained calm in March, though economists warned that a prolonged war in the Middle East posed a downside risk.

YEN WATCH

The Japanese yen was flat at 159.55 per US dollar, not far from the 21-month low that it hit last week as traders watch for indications of Tokyo intervening in the wake of strong warnings from officials in the past few days.

Japanese Finance Minister Satsuki Katayama on Friday put currency traders on notice, saying the government stands ready to act against speculative moves in foreign exchange markets as volatility has risen "significantly."

Still, many doubt the firepower of any intervention at a time when geopolitical turmoil in the Middle East is fueling relentless demand for the safe-haven dollar. The yen is down 1.5% since the war started, stuck near the 160 level.

Speculators have also been adding to their short yen positioning, with the latest weekly data showing a short position worth $5.7 billion, the highest since July 2024, when Japan last intervened in the FX markets.

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Business

Türkiye, Syria Step Up Banking Ties as Lenders Eye Expansion

Türkiye’s Ziraat Bank tower is seen in Sarajevo, Bosnia and Herzegovina, May 16, 2018. (Reuters)
Türkiye’s Ziraat Bank tower is seen in Sarajevo, Bosnia and Herzegovina, May 16, 2018. (Reuters)
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Türkiye, Syria Step Up Banking Ties as Lenders Eye Expansion

Türkiye’s Ziraat Bank tower is seen in Sarajevo, Bosnia and Herzegovina, May 16, 2018. (Reuters)
Türkiye’s Ziraat Bank tower is seen in Sarajevo, Bosnia and Herzegovina, May 16, 2018. (Reuters)

Türkiye and Syria are accelerating cooperation between their central banks, Trade Minister Omer Bolat said on Tuesday, adding that Syria’s central bank governor will meet Turkish banking ‌regulators.

Speaking at ‌a business ‌forum, ⁠Bolat said closer ⁠banking ties and the entry of Turkish lenders into Syria could help boost trade and industrial ⁠investment.

State lender Ziraat ‌Bank ‌and private lender Aktifbank ‌are both working to ‌establish a presence in Syria, company officials said separately, with applications submitted ‌and operations expected to begin in the near ⁠term.

Business ⁠leaders at the forum said restoring banking services and resolving customs and logistics issues would be key to increasing bilateral trade.

Business

Türkiye Not Facing Energy Security Problem Amid War but Situation ‘Volatile’

Travelers cross from Iran into Türkiye at the Kapikoy border crossing in eastern Van province, Türkiye, Saturday, April 4, 2026. (AP)
Travelers cross from Iran into Türkiye at the Kapikoy border crossing in eastern Van province, Türkiye, Saturday, April 4, 2026. (AP)
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Türkiye Not Facing Energy Security Problem Amid War but Situation ‘Volatile’

Travelers cross from Iran into Türkiye at the Kapikoy border crossing in eastern Van province, Türkiye, Saturday, April 4, 2026. (AP)
Travelers cross from Iran into Türkiye at the Kapikoy border crossing in eastern Van province, Türkiye, Saturday, April 4, 2026. (AP)

Türkiye is not ‌facing any problems regarding energy supply security due to the Iran war, but the situation is "volatile", Energy Minister Alparslan Bayraktar was quoted as saying by Turkish media on Tuesday.

"We hope the war will not last any longer. But the process is currently under our control," Bayraktar told reporters on Monday evening after a cabinet meeting, broadcaster Haberturk reported.

"There is no problem or difficulty in energy ‌supply security."

Türkiye ‌is a big energy importer which ‌neighbors ⁠Iran and is among ⁠the most exposed emerging market economies to the global energy price jump.

Bayraktar said in late March that Türkiye’s dependence on Middle East oil was at a "manageable" 10% of total supplies and that the country had taken protective diversification steps.

At the ⁠time he said every $1 increase in ‌oil prices adds about $400 million ‌to Türkiye’s energy bill, while there had not been ‌any natural gas supply cuts so far from ‌Iran, Türkiye’s fourth largest supplier last year.

On Monday, Bayraktar told reporters that he had spoken with the Hungarian foreign minister and discussed the issue of protecting the security ‌of the TurkStream pipeline, which carries Russian natural gas to southern Europe through ⁠the ⁠Black Sea and Türkiye.

Explosives were found near the TurkStream pipeline in Serbia at the weekend, prompting Hungarian Prime Minister Viktor Orban to convene an emergency defense council.

Russia and Türkiye formally launched the TurkStream pipeline, which has a capacity of 31.5 billion cubic meters per year, in January 2020. The pipeline allows Moscow to bypass Ukraine as a transit route to Europe.

"The security of the pipeline in the Black Sea and on our side is important," Bayraktar said.

Business

SME Financing Moves to the Core of Saudi Arabia’s Non-Oil Economy

A night view of Riyadh, Saudi Arabia (SPA file)
A night view of Riyadh, Saudi Arabia (SPA file)
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SME Financing Moves to the Core of Saudi Arabia’s Non-Oil Economy

A night view of Riyadh, Saudi Arabia (SPA file)
A night view of Riyadh, Saudi Arabia (SPA file)

In a sign of a deep shift in the structure of financing within Saudi Arabia’s economy, and reflecting the goals of Vision 2030 to diversify the production base, credit facilities extended to micro, small and medium-sized enterprises reached a record high at the end of 2025.

Banks and finance companies injected around SAR 467.7 billion ($124.5 billion) into the sector last year, marking a 33 percent annual increase. The surge highlights the transition of these enterprises from the margins of economic activity to the center, positioning them as a key driver of non-oil growth and job creation.

On a yearly basis, total facilities rose 33 percent from about SAR 351.7 billion ($93.6 billion) in 2024, according to monthly bulletin data from the Saudi Central Bank (SAMA).

The banking sector accounted for the largest share, with facilities provided by banks reaching approximately SAR 446.6 billion, up 34 percent year on year. Finance companies contributed around SAR 21.1 billion, an annual increase of 15.4 percent.

By enterprise size, growth rates varied. Lending to medium-sized firms rose 18 percent year on year to SAR 220.9 billion. Small enterprises recorded stronger growth of 34 percent, reaching SAR 163.5 billion. Micro-enterprises saw the sharpest increase, with facilities surging 97 percent to SAR 83.3 billion, underscoring a notable expansion in financing to this segment.

Structural shift

The strong growth has been driven by several factors, most notably the clear strategic direction under Vision 2030, which places SMEs at the heart of economic diversification, along with the expanding role of institutions supporting the sector.

Among these is Monsha’at, which has helped improve the business environment and connect enterprises with funding sources, according to economist Hussein Al-Attas.

“This level of facilities is not just a record figure. It reflects a structural shift in the philosophy of financing within the Saudi economy,” Al-Attas told Asharq Al-Awsat.

He identified four main drivers behind the growth: a clear economic vision, a stronger regulatory environment, the expansion of credit guarantee programs, and a shift in how banks view the SME sector.

The Kafalah program has been particularly important, helping reduce lending risks and enabling banks to increase exposure to SMEs. This has coincided with improvements in financial data quality and governance practices, which have strengthened lenders’ confidence in the sector.

Sustainable growth

Al-Attas said the current trend reflects not a temporary expansion in credit but a redefinition of the role of SMEs in the economy, with growth expected to continue over the medium term.

However, he pointed to several challenges that could affect the pace of expansion. These include limited managerial expertise in some firms, the risk of defaults if financing is poorly managed, concentration of lending in specific sectors, and the potential impact of future interest rate increases.

Authorities are aware of these risks. This is reflected in a growing focus on improving governance, strengthening management efficiency, and linking financing more closely to actual operating performance to ensure funds are directed toward sustainable and productive activities.

The importance of this expansion extends beyond the headline figures. It supports a higher contribution of SMEs to non-oil GDP and plays a central role in job creation, given the sector’s labor-intensive nature.

According to Al-Attas, the growth also strengthens economic diversification by supporting the entry of new firms into promising sectors such as technology, industry, and services. It also increases local value added and reduces reliance on imports and large corporations.

Looking ahead, he expects financing growth to continue at a healthy pace over the next three to five years. This outlook is supported by the expansion of digital financing solutions, continued integration between government and banking sectors, and improving market maturity and enterprise quality. Large-scale projects and non-oil expansion are also expected to create new financing opportunities, gradually shifting the focus from the volume of funding to the quality of its economic impact.

Digital transformation

Mohammed Al-Farraj, senior head of asset management at Arbah Capital, said the development reflects alignment between ambitious government policies aimed at raising SMEs’ contribution to GDP to 35 percent and a responsive banking sector that has led the growth and captured the largest share of financing.

He noted that guarantee and incentive programs, as well as the SME Bank, have played a key role in reducing credit risks and boosting banks’ willingness to lend.

Digital transformation and the rise of fintech companies have also marked a turning point by improving access to financing and lowering operating costs. This has created a more flexible and attractive environment for business growth beyond traditional constraints.

Despite these positive indicators, Al-Farraj cautioned that rapid expansion requires strategic vigilance, particularly regarding credit risks and potential defaults amid interest rate volatility and increased competition in sectors such as retail.

He continued that the next phase will require a shift from quantitative growth, focused on expanding financing volumes, to qualitative growth that emphasizes credit quality, project sustainability, and resilience to economic changes.

Alternative financing tools such as venture capital are expected to play a growing role. These tools can ease pressure on bank balance sheets while directing funding toward strategic sectors including technology, tourism, and industry to ensure meaningful value creation in the national economy.

Developments seen in 2026 suggest early returns from this expansion. These include the emergence of a new generation of high-growth firms, increased SME contribution to non-oil exports, and greater use of instruments such as sukuk tailored for SMEs as a cost-effective long-term financing option.

Al-Faraj said SMEs are no longer a peripheral segment but a central driver of innovation and growth in Saudi Arabia’s economy. Sustaining this momentum will require continued regulatory development and more flexible repayment mechanisms to ensure durable growth aligned with long-term economic development goals.