What is 2021 Holding for the GCC Financial Markets?

SourceAl Bawaba
SectorFinancial Markets
CountryGulf

The last year was unlike any other in our living memory with the Covid-19 pandemic having a deep impact on almost all areas of life across almost the entire globe. And yet, financial markets reached record highs – thanks to abundant liquidity created by easing monetary and fiscal policies. Though optimism is further buoyed by the recent vaccine developments, the logistics of inoculating mass population is complex and possibility of a second wave of infections remains intact. In such a scenario, we look at the main themes threading through the GCC financial markets.

Currencies: With abundant easing of monetary and fiscal policies in the US expected to remain unchanged in the coming year, the USD is set to soften against most major currencies. Consequently, given the pegged status, most GCC currencies will weaken in tandem. EUR, GBP, INR, AUD etc all are expected to strengthen against the Dirham. So any delay in your currency exchange requirements may not be a good bet this year. Oil: Global economic recovery is expected to boost the demand for oil. On the other hand, supply appears well contained by sincere efforts being taken by Opec+. Most analysts expect oil prices to average around $50 ...read more...