Asian currencies slip on risk off after Israel strikes Iran
BENGALURU: Asian stock markets and currencies fell on Friday as investors rushed to safe havens after Israel struck Iran's nuclear and military sites, deepening market jitters already stoked by global trade tensions.
Israel said it was declaring a state of emergency in anticipation of a missile and drone strike by Tehran, after what it called a 'preemptive strike' over Iran's nuclear programme.
Crude prices surged over 9% on worries about disrupted oil supplies. Rising oil prices typically pressure emerging Asian currencies by widening current account deficits in net oil-importing countries.
The South Korean won and the Philippine peso fell 0.8% each. The Indian rupee fell 0.6% while the Indonesian rupiah dropped 0.5%.
An index measuring the dollar against six other currencies rose 0.5%, rebounding from a multi-year low hit earlier this week.
Israel-Iran tensions are leading to a more cautious tone in markets and in turn weighing on regional currencies, said Alan Lau, FX strategist at Maybank.
The development comes ahead of multiple central bank meetings next week such as the Bank of Japan, the Bank of England and the Federal Reserve 'of which the outcomes on net could support a USD rebound,' Lau said.
The Thai baht weakened 0.2%. Maybank analysts said in a note that while higher oil prices are weighing on the currency, the uptick in gold prices was providing some support.
The Malaysian ringgit lost 0.5%, in line with the broader movement, even as Malaysia stands out as the only net oil and gas exporter among the major emerging Asian economies.
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Business Recorder
15 hours ago
- Business Recorder
Asian currencies slip on risk off after Israel strikes Iran
BENGALURU: Asian stock markets and currencies fell on Friday as investors rushed to safe havens after Israel struck Iran's nuclear and military sites, deepening market jitters already stoked by global trade tensions. Israel said it was declaring a state of emergency in anticipation of a missile and drone strike by Tehran, after what it called a 'preemptive strike' over Iran's nuclear programme. Crude prices surged over 9% on worries about disrupted oil supplies. Rising oil prices typically pressure emerging Asian currencies by widening current account deficits in net oil-importing countries. The South Korean won and the Philippine peso fell 0.8% each. The Indian rupee fell 0.6% while the Indonesian rupiah dropped 0.5%. An index measuring the dollar against six other currencies rose 0.5%, rebounding from a multi-year low hit earlier this week. Israel-Iran tensions are leading to a more cautious tone in markets and in turn weighing on regional currencies, said Alan Lau, FX strategist at Maybank. The development comes ahead of multiple central bank meetings next week such as the Bank of Japan, the Bank of England and the Federal Reserve 'of which the outcomes on net could support a USD rebound,' Lau said. The Thai baht weakened 0.2%. Maybank analysts said in a note that while higher oil prices are weighing on the currency, the uptick in gold prices was providing some support. The Malaysian ringgit lost 0.5%, in line with the broader movement, even as Malaysia stands out as the only net oil and gas exporter among the major emerging Asian economies.
Express Tribune
16 hours ago
- Express Tribune
WB approves $700m Reko Diq loan
The IFC loan represents its first mining investment in Pakistan, helping to lay the foundation for further investment in mining and to support resilience in a fragile economic region. Photo (file) Listen to article Finance Minister Muhammad Aurangzeb said on Friday that the World Bank Group had approved a $700 million loan for the Reko Diq mining project, despite strong opposition from India, which attempted to block the investment required to meet the project's overall $3 billion financing needs. The World Bank Group approved the concessional package by rejecting Indian objections, Aurangzeb said while speaking during a meeting of the Senate Standing Committee on Finance. Of the total, $300 million will be provided by the International Finance Corporation (IFC), and $400 million will be extended by the International Development Association (IDA), both part of the World Bank Group. This marks the third instance in the past month where India has failed to block lending. India attempted to block the board meeting of the World Bank Group from approving the $700 million loan for the Reko Diq project but was once again unsuccessful, he added. The minister further said that India was lobbying against Pakistan in international financial institutions but had failed to create any problems. All three major global lenders — the International Monetary Fund (IMF), the World Bank Group, and the Asian Development Bank (ADB) — have refused to pay heed to Indian propaganda against Pakistan and have approved separate lending packages since May 9. The IFC is also acting as the lenders' coordinator for the $6.6 billion Reko Diq gold and copper mining project. Of the total cost, $3.7 billion will be arranged by the three shareholders: Barrick Gold, the federal government, and the provincial government of Balochistan. The IFC's lending will help lay the foundation for further investment in the mining sector and support resilience in an economically fragile region like Balochistan. The IFC will provide $300 million from its own account, while another $400 million will be issued as a blended finance loan under the World Bank Group's IDA-20 package. The World Bank stated that the project is expected to generate a peak of up to 10,000 jobs during the construction stage, with the Reko Diq Mining Company's local recruitment policy prioritising residents of Balochistan for both skilled and low-skilled positions. This will provide a stable source of income for households, which is expected to include a substantial number of women. The mining company plans to contribute 1% of construction costs and 0.4% of annual revenue to projects identified by local Community Development Committees throughout the project's life. Additionally, through blended finance loans structured as sustainability-linked financing, the IDA will set key performance indicators focused on efficiency in water abstraction, female employment, local jobs, and local procurement. In March this year, Pakistan revised upward the total cost of the first phase of the Reko Diq copper and gold mine project to $6.6 billion — a 56% increaseby expanding the scope of the strategically important scheme and accounting for inflationary impact and higher production requirements. Pakistan's three government-owned companies — Oil and Gas Development Company Limited (OGDCL), Pakistan Petroleum Limited (PPL), and Government Holdings (Private) Limited (GHPL) — each hold 8.33%, making up a collective 25% federal government stake. Of the remaining Pakistani share, 25% is held by the government of Balochistan, and 50% is held by Barrick Gold Corporation, which operates the project. The project is on track to begin production by the end of 2028, starting with 200,000 tonnes of copper annually in its first phase, which is expected to cost $5.7 billion. Completion of this phase is projected by 2029. In Phase II, expected to be completed by 2034, another $3.3 billion will be invested to increase production capacity to 90 million tonnes per annum. This will bring the total project cost to nearly $9 billion. The Reko Diq deposit is one of the largest untapped copper deposits in the world. The IFC loan represents its first mining investment in Pakistan, helping to lay the foundation for further investment in mining and to support resilience in a fragile economic region. Global demand for metals is rising due to growth in energy, digital technologies, and infrastructure. Copper is a critical mineral essential for renewable energy technologies, electric vehicles, and efficient electrical grids. However, existing supply will not meet growing demand, and new mines such as Reko Diq must come online to bridge the gap. Once fully developed, Reko Diq will be one of the world's largest copper mines. Pakistan's mining industry has the potential to play a key role in meeting rising global copper demand. The project will also generate export and foreign currency earnings, with 100% of its revenue in foreign currency. The World Bank Group has estimated that, depending on copper and gold prices, the project could contribute a gross value added of around $2 billion annually to Pakistan's economy. The WBG is currently working on a scoping study expected to further demonstrate the benefits of developing a mining district around Reko Diq. The area is home to other prospective copper deposits. Once the project is successfully developed, it could pave the way for additional mining ventures in the region, positively impacting local economic development.
Express Tribune
20 hours ago
- Express Tribune
Optical delusions
Listen to article Within the past thirty days, we have witnessed two wars waged to consolidate power and for optics. India tried to invade Pakistan for all the worst reasons imaginable. Shortly after the Pahalgam incident, when India failed to produce a smoking gun — some serious evidence to implicate Pakistan or even apprehend the actual perpetrators who still remain at large -—Indian client analysts in international think tanks, or those appearing on international news channels, tried to present war or strikes deep inside Pakistan as a political imperative. Modi had to maintain this image of strength, you know. That's why they had to attack Pakistan. And India was confident that, through back-channel pressures, it could compel Pakistan not to retaliate. That plan did not go well, and the overconfident Indian spin masters ended up presenting India as a state that can risk nuclear escalation for one man's image management. But look at the fallout. Since the early 1990s, India had somehow convinced the West that its cooperation was critical in containing China. As this image grew, it asked for Pakistan's head on a platter. While the West could not do that, it did the next best thing: wealth and unprecedented influence. India used both to isolate Pakistan. But with one irrational act, it ended up exposing its chinks in the armour. With one strategic blowback, the world now knew India was nowhere near there. It wasn't the West that needed India; it was India that needed the West. Who wants that kind of liability? Everyone will only look at the main asset the country has got: its wealth. All relationships will be transactional from now on. As for Pakistan, three decades of Indian blackmail against the country have ended, and the world is ready to work with Pakistan. Domestically, Modi's image has been badly shaken. The deep state and the hardliners see him as a liability and are counting the days till they get rid of him. To save face, Modi got the help of Niti Aayog (the body that replaced the Planning Commission), and through some numerical voodoo, the body declared that India's economy had beaten Japan to become the world's fourth-largest economy. Japan has been India's main benefactor. Imagine how these reports played out within the country. The world now knows that the Indian deep state knows that Modi has no value to contribute. Some optics. The second case is that of Israel's Netanyahu, who has been using political radicalism to offset three major corruption cases against him. As a result, the Israeli polity has constantly radicalised. In the aftermath of October 7's ghastly attacks, instead of prioritising the rescue of the hostages, he declared a forever war, which has exposed the sheer brutality of the regime. Meanwhile, he has used all elements to regularly manipulate political outcomes in the US and other Western democracies. This policy has been the law of diminishing returns. Only a day ago, Israel carried out a massive attack on Iran. Purpose? Optics again. The global outrage against Israel's genocide in Gaza is growing. In any case, the blood of the Gazans is not enough to indefinitely feed the tiger of political hate he rides. So, why not expand the war? I hold no brief for Iran, but this is too transparent to go unnoticed. Israel called these attacks 'pre-emptive strikes', and the US called them a unilateral action. Remember the days when the US used to carry out "pre-emptive strikes" on Israel's behalf? The law of diminishing returns, indeed. Meanwhile, the cases against Netanyahu are where they were. As Ta-Nehisi Coates once said: Your oppression will not save you. History has some lessons for these politicians. Four days after Pearl Harbour, Adolf Hitler made perhaps the most catastrophic decision in modern warfare - declaring war on the United States purely to maintain his image as a loyal ally to Japan. Despite having no treaty obligation and every strategic reason to avoid a two-front war, Hitler couldn't bear appearing weak or unreliable to his Axis partners. The declaration was born entirely from ego and optics, not strategy. In one impulsive moment, driven by his need to project strength, Hitler handed Roosevelt the perfect gift - a declaration that galvanised American support for the very strategy planners had envisioned: an enormous two-front commitment that would treat Germany as the principal threat. You know what happened next. Jimmy Carter was drowning in the polls when Iranian revolutionaries seized American hostages, and the pressure to look presidential became unbearable. Despite military advisers warning about the mission's complexity, Carter greenlit Operation Eagle Claw — not primarily to save the hostages, but to save his presidency. The mission was always more about optics than operations, a desperate attempt to project strength in an election year. When helicopters collided in the Iranian desert, killing eight servicemen and leaving classified documents behind, the rescue attempt became a symbol of American impotence. Carter, seeking to appear decisive and strong, instead looked more helpless than ever. The failed mission sealed his electoral fate, and Ronald Reagan rode the backlash all the way to the White House. Douglas MacArthur was a genuine American hero, a brilliant tactician who had saved countless lives through his strategic genius in the Pacific. But even great men can fall victim to the siren call of complete victory. After his masterful Inchon landing, MacArthur faced a choice that would define his legacy: stop at the 38th parallel or push for total triumph in North Korea. The general, having tasted success and facing pressure from Washington not to settle for half-measures, chose to cross the line. It was an understandable decision from a commander who had delivered miracle after miracle. Yet history had one more lesson to teach: China entered the war, forcing the longest retreat in American military history. The general who had never known defeat watched his forces flee south, and President Truman ultimately relieved him of command. MacArthur's pursuit of total victory cost him everything he had built. General Leopoldo Galtieri was a desperate man leading a desperate government when he ordered the invasion of the Falkland Islands. With Argentina's economy collapsing and massive protests filling the streets, the military junta needed a patriotic victory to survive. The Falklands seemed perfect — a beloved national cause that would unite the country behind its leaders. "We need this," Galtieri reportedly told his cabinet, and for a brief moment, it worked. Massive crowds celebrated in Buenos Aires as Argentine flags flew over Port Stanley. But history cared nothing for Galtieri's political survival. Margaret Thatcher dispatched a task force 8,000 miles across the Atlantic, and within weeks, Argentina's military was in shambles. From Delhi to Tel Aviv, from Berlin to Buenos Aires, history keeps repeating its lesson: optics may win headlines, but strategy decides legacies.
