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Egypt’s foreign reserves drop to $37 bln with Ukraine war shock

Egypt’s net foreign reserves fell sharply to $37.082 billion in March from $40.994 billion in February, the central bank said on Thursday, noting that it had moved to cover high foreign investor outflows triggered by Russia’s invasion of Ukraine.
Egypt’s economy came under sharp pressure as investors exited emerging markets following the invasion. Egypt is a major importer of wheat from Russia and Ukraine, and both countries are important to Egypt’s tourism sector.
“In the wake of the Russia/Ukraine crisis and in line with the CBE’s mandate to maintain price stability, the CBE decided to temporarily mobilize its excess foreign currency reserves to calm the markets,” a statement from the central bank said.
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“Such mobilization was aimed at covering substantial foreign investor outflows and partially covering local demand in order to ensure the availability of imported strategic goods and to repay external debt obligations in a timely manner.”
Egypt allowed its currency to devalue sharply in late March, and Gulf Arab states are channeling up to $22 billion to Egypt in investments and deposits.
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Europe ready for Baltics emergency switch-off from Russian grid

European grid operators are ready to implement immediately a long-term plan to bring the Baltic states, which rely on the Russian grid, into the European Union system in the event Moscow cuts them off, three sources familiar with the matter told Reuters.

Concern about depending on Russia for any form of energy has mounted across Europe because of reductions in Russian gas supplies to some countries following Moscow’s invasion of Ukraine.

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The Baltic states are nervous because Lithuania has clashed with Russia for blocking goods to Moscow’s Kaliningrad enclave.

Thirty years after splitting from the former Soviet Union and 17 years since joining the European Union, the Baltic States of Estonia, Latvia and Lithuania depend on Russia to ensure stable power supplies.

The Baltic States have a long-standing plan to become part of the European decentralized network of power grids, known as ENTSO-E, by 2025.

The sources said that could be implemented immediately if necessary, under contingency plans drawn up by ENTSO-E for such an eventuality. They spoke on condition of anonymity because of the sensitivity of the issue.

The Russian and Continental European systems both operate at a frequency of 50 Hertz, but whereas the Russian system is run from Moscow, the continental European grids are decentralized, meaning each national grid operator is responsible for maintaining the stability of its system.

However, in an emergency, those in the European system can provide help.

Already in March, the EU and Ukraine linked their grids – 2-1/5 years earlier than planned – enabling Ukraine to receive emergency power from Europe if military attacks caused outages.

Ideally, the Baltic States would only disconnect from the Russian grid in 2025, following the completion of investment backed by 1.6 billion euros ($1.68 billion) of EU funding to upgrade their infrastructure.

The sources said, however, the Baltic States would already be able to cope if they have to. The grids would operate in a stable manner but the lack of the infrastructure upgrades could mean higher power prices, one of them said.

Trial run

Lithuania last year installed and successfully tested equipment to link up the Baltic power grid with Poland, an ENTSO-E member.

ENTSO-E was not available to comment on Thursday, and the Polish power grid declined to comment.

A spokesperson for Litgrid, which operates the Lithuanian grid, told Reuters last year’s test of the Lithuanian-Polish LitPolLink connection upgrade showed that “in an emergency, the Baltic countries will receive help and be able to connect to the networks of continental Europe.”

“We coordinate with regional partners and are ready to ensure reliable power supply in all scenarios,” the spokesperson said.

Removing the Baltics from the regional grid would also cut off Russia’s Kaliningrad exclave, which is wedged between Lithuania, Poland and the Baltic Sea, meaning it would have to run the grid independently.

A test of whether Kaliningrad could do this was planned for Saturday but Russia called it off shortly before it was due.

No-one could immediately be contacted in Russia to comment on the Baltic grid plans.

However, Russia has said it is committed to fulfilling its energy supply contracts.

It says reduced gas deliveries this month via the Nord Stream 1 pipeline to Germany were caused by the delayed return of turbine equipment being serviced by Germany’s Siemens Energy in Canada.

Read more: Technical problem with Nord Stream 1 a Russian pretext: German minister

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OPEC+ to maintain oil output policy, steers away from plans for September

OPEC+ said on Thursday it would stick to its planned oil output hikes in August but avoided discussing policy from September onwards as prices have risen on tight global supplies and concerns about the groups' collective ability to pump more crude.

Thursday’s meeting of the group that includes Saudi Arabia, Russia and other major oil producers was held days before US President Joe Biden travels to the Middle East, including Riyadh where he is expected to press the Kingdom for more oil.

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At its last gathering on June 2, OPEC+ decided to increase output each month by 648,000 barrels per day (bpd) in July and August, up from a previous plan to add 432,000 bpd per month.

Washington welcomed the June 2 decision for a faster production rise, after months of Western pressure on OPEC+, which includes the Organization of the Petroleum Exporting Countries.

Oil prices rocketed to their highest levels since 2008 after the United States and Europe imposed sanctions on Russia over its invasion of Ukraine in February, which Moscow calls a “special military operation.”

Prices has slipped since then but were still above $115 on Thursday on tight supply and concerns that OPEC states had little extra capacity to raise output swiftly.

French President Emmanuel Macron claimed that he had been told Saudi Arabia and the United Arab Emirates, the only two OPEC states considered to have significant spare capacity, could barely raise output.

According to Macron, Sheikh Mohamed said the UAE was at its “maximum” capacity and Saudi Arabia could raise production by only 150,000 bpd.

This report was refuted by the Energy and Infrastructure Minister Suhail bin Mohammed al-Mazrouei, who said: “The UAE is producing near to our maximum production capacity based on its current OPEC+ production baseline, which the UAE is committed to until the end of the agreement,” according to the official WAM news agency.

The UAE is able to produce 4.2 million bpd, according to its declared maximum production capacity.

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Emirates Airline, MBC partner to provide exclusive Shahid content in the air

Emirates Airline has partnered with MBC-owned streaming platform Shahid to offer over 135 hours of premium on-demand content in the flight cabin’s entertainment system from July.

The partnership makes available 15 exclusive shows on the ‘ICE’ system on board, making it the only other platform to offer this content aside from the subscription-based platform, Shahid.

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“We are excited to welcome the world’s leading Arabic streaming service content onboard – so passengers can catch up on all their favorite entertainment inflight, just as they do at home,” Patrick Brannelly, Emirates’ Senior Vice President Retail, IFE & Connectivity, said in a statement.

He added that Emirates looks forward to grow the partnership further, signaling the possibility of a larger content availability on board in the future.

“We are excited to offer Shahid’s content for Emirates’ customers to enjoy, just in time for the busiest travel season of the year,” Natasha Matos-Hemingway, Chief Commercial and Marketing Officer (VOD) at MBC Group, said.

The Arabic content programs include subtitles to increase accessibly to an international audience, a statement clarified.

The newly added content from Shahid adds to the extensive collection of Arabic content already available on Emirates, including live television channels, films and shows.

Shahid’s biggest original production Rashash will be streamed for the first time by an airline on-board Emirates. Other original titles include Anbar 6, Hell's Gate, Dor Al Omor, Nemra Etnein, al-Shak, al-Jedar al-Rabea, Rahn El Tahqiq, 2020, Bi Saraha Ma’a, Dofa'at Beirut, Aghani Min Hayati, Kaf w Dafoof, and Salon Zahra.

This content originates from Saudi Arabia, Kuwait, Egypt, and Lebanon.

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