Interpreting Middle East Economic News and Analyzing Market Trends

Archive for March, 2013

… Meanwhile, Saudi banks suffer from too much cash

It’s a terrible time to be a bank in the Eurozone.  Countries in southern Europe are stuck in a depression, banks all over Europe are stuck with too much bad debt, and recently a major loss of confidence after the public theft of Cypriot depositors.  Banks in Saudi Arabia, on the other hand, face a different challenge: what to do with all that cash?

 

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Libya considers giving aid to Egypt

Now here’s a story you would have never expected to see before 2011.  Here’s the article from the Voice of America:

 

Libya is considering extending financial aid to Egypt to help its North African neighbor overcome a severe economic crisis, Libyan Prime Minister Ali Zaidan said on Wednesday.

Egypt, which has endured more than two years of political instability since the overthrow of President Hosni Mubarak in 2011, is struggling with sliding currency reserves, falling tourism and a soaring budget deficit.

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The Cypriot euro launched today

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Heavily-guarded trucks loaded with euros headed to the Central Bank of Cyprus

Banks in Cyprus will open today at noon for the first time in nearly two weeks.  The terms of the bail-in by the Trioka were only finalized on Monday, which called for a ‘levy’ on uninsured deposit (deposits over €100,000) of up to 40%.  Banks remained closed in the meantime until further clarification and to give the government time to put in place capital controls, in effect creating a new currency, the Cypriot euro.  Here’s more from The Wall Street Journal:

 

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Egypt close to default and Bahrain one step away from junk bond status

Cyprus has been dominating the financial news over the past two weeks.  The crisis seemed to come out of nowhere and rattle financial markets.  There are many questions that come up with events like these.  One key question is, did this crisis really come out of nowhere?  Another key question is, how can we spot potential crisis in the future?  What about the Middle East and the GCC in particular, are there any trouble spots?

 

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US tells Iraq to stop allowing Iran supply flights to Syria over its airspace while it pushes ahead with arming rebels

It is no secret that the CIA has been helping the rebels in Syria.  Initially, the US gave the green light to Saudi Arabia and Qatar to send aid and military supplies to the rebels, but two years on and frustration growing, the US is becoming more aggressive.  As the US increases its support for the rebels, it is now asking Iraq to stop allowing Iranian supply planes to fly over Iraq in an attempt to halt Iran’s aid to Assad’s regime.  Will Iraq comply?  No.

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