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Lebanon’s Central Bank sets new rate for withdrawals from US dollar deposits

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Lebanon’s central bank said on Thursday it had set a new rate of 8,000 Lebanese pounds to the US dollar for withdrawals from bank deposits denominated in dollars but which can now only be accessed in the local currency.

The rate was previously set at 3,900 pounds, which implied a “haircut” or loss of more than 80 percent at the current market rate of around 25,000 pounds per dollar. The new rate represents a haircut of around 70 percent.

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The central bank also set a withdrawal ceiling of $3,000 per month equivalent in Lebanese pounds for account-holders, who have been unable to freely access their savings since the collapse of the financial sector in 2019.

The central bank had maintained a pegged rate of 1,500 pounds per dollar until summer 2019, when it unofficially allowed the currency to become untethered after accumulating tens of billions of dollars in losses.

The pound has since lost more than 90 percent of its value, throwing the majority of Lebanon’s population into poverty and leading to shortages of basic goods such as medicines in the formerly middle-income country.

The central bank officially maintains a rate of 1,500 but almost all goods trade at the market rate.

Read more: Lebanon risks becoming a republic of NGOs: UN Special Rapporteur on Poverty

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Dubai’s Emirates suspends flights to several US destinations on 5G concerns

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Dubai's Emirates airline announced on Tuesday that it will suspend flights to several destinations in the US as of Jan. 19 until further notice because of concerns over 5G mobile deployment.

The move is “due to operational concerns associated with the planned deployment of 5G mobile network services in the US”, the company said. It said the destinations include Boston, Chicago, Dallas Fort Worth, Houston, Miami, Newark, Orlando, San Francisco, and Seattle.

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Emirates flights to New York's JFK, Los Angeles International Airport and Washington DC's Dulles International Airport will continue to operate as usual, the company added.

“We are working closely with aircraft manufacturers and the relevant authorities to alleviate operational concerns, and we hope to resume our US services as soon as possible,” the carrier said.

The White House said earlier on Tuesday that it wants to reach a solution on 5G deployment that protects air safety while minimizing disruption to air travel.

Read more:

New 5G launch to affect Boeing 787 landings, warns US aviation authority

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Britain steps up Kenya investments with railway hub, eyes $1 bln deals

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Britain is partnering with Kenya to build a new rail hub in the capital Nairobi, and its development arm CDC Group will invest $1 billion in various sectors over the next five years, officials said on Tuesday.

Britain, the former colonial power, has increased its engagement with Nairobi in recent years, after signing a new post-Brexit trade deal in late 2020.

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It has also displayed a readiness to help Kenya develop its infrastructure, an area dominated by Chinese funds and firms in the past decade.
British engineering firm Atkin Global is designing a modern, eight-platform central rail station and a public space, which will anchor commercial and residential developments on a 425-acre spread that will host the railway transit hub.

The deal was first agreed between Kenya’s President Uhuru Kenyatta and British Prime Minister Boris Johnson at a meeting in London two years ago, both sides said.

“We are delivering that ambitious, strategic partnership that was agreed by our two national leaders,” said Vicky Ford, Britain’s minister for Africa.

The initial phase of the project will cost 1.35 billion Kenyan shillings, excluding consultancy fees, which will be paid by the British government, Philip Mainga, the managing director of Kenya Railways, told Reuters.

The railway city will take many years to implement, Kenyan government officials said.

KPMG, the global consulting firm, is leading the hunt for investors into the segments of the project with commercial viability, including office towers, residential homes and multi-story car parks, said James Woodward, director at KPMG.

Kenya will also benefit from $1 billion of investments into various sectors, including climate financing, over the next five years from Britain’s development finance arm CDC Group, said Tenbite Ermias, the agency’s Africa head.

The East African economy already accounts for 10% of the agency’s $4 billion investment portfolio on the continent, said Tenbite.

Read more: China FM in Kenya on tour of Africa to check Beijing-funded infra projects

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Erdogan says cost concerns force US rethink on EastMed gas pipeline

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The United States has pulled its support for a subsea pipeline that would supply natural gas from the eastern Mediterranean to Europe because it makes no economic sense, Turkish President Recep Tayyip Erdogan was cited as saying on Tuesday.

Touted as an alternative to help ease Europe’s dependence on Russian gas, the 1,900-km (1,180-mile) project would initially be expected to carry 10 billion cubic meters of gas a year. But it remains unclear whether the project will ever go ahead.

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Turkey has long opposed the project, which is backed by Greece, Cyprus and Israel and had also enjoyed the support of the former Trump administration in the United States.

Last week, however, Reuters reported that the Biden administration, in an apparent U-turn, had expressed misgivings about the EastMed project, citing concerns over its economic viability and environmental costs.

“This project is not something that can happen. They (the United States) carried out all the analyses, and they saw it had no positive sides. In other words, the cost calculations don’t add up,” Erdogan told reporters during a visit to Albania, according to broadcaster NTV.

“The United States takes all its steps based on capital in any case. Since the cost calculations for this didn’t add up, it pulled its support,” he added.

Erdogan reiterated his view that the project “cannot work without Turkey.”

Under a cooperation deal sealed two years ago, Greece, Cyprus and Israel aim to reach a final investment decision for the pipeline in 2022 and to complete its construction by 2025.

It would transport gas from Israeli and Cypriot waters to Greece and into Europe’s gas network via Italy. But regional politics could well scupper such plans.

NATO allies Turkey and Greece are at odds over their competing maritime jurisdiction and energy rights in the eastern Mediterranean. Turkey has no diplomatic relations with the internationally recognized government of Cyprus, instead backing a breakaway Turkish Cypriot entity in the north of the island.

Amid an apparent thaw in Turkey’s long-troubled ties with Israel, Erdogan was quoted as saying on Tuesday that the two countries had previously attempted to cooperate on energy resources but that talks had never moved far ahead.

“Is there no hope of reaching something now? We can sit down and discuss terms,” he said, without elaborating.

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