Happy Monday everyone!

Here’s what’s shaping the business landscape today:

🔹 US Tariffs to Strengthen Dirham & Gulf Currencies – A stronger dollar, fueled by potential US tariff hikes, could boost Gulf currencies while pressuring South Asian economies. Expatriates may benefit from higher remittance values, but inflation risks loom.

🔹 RTA & Dubai Holding’s AED 6B Deal – A major infrastructure push will enhance road networks across key Dubai developments, reducing travel times and improving connectivity.

🔹 $4B in US Military Aid to Israel – Secretary of State fast-tracks assistance amid ongoing Middle East tensions.

But before that: You can join our Whatsapp channel too to receive updates from the business world.

US Tariffs Set to Strengthen Dirham and Gulf Currencies, Impacting South Asian Economies

📰 What is it about?

• The dirham and other Gulf currencies, which are pegged to the US dollar, are expected to appreciate following potential US tariff hikes predicted by Goldman Sachs.

• A stronger dollar, driven by import tariffs and capital inflows, could widen the exchange rate gap between Gulf currencies and South Asian currencies like the Indian rupee and Pakistani rupee.

• This creates a dilemma for expatriates, who remit over $120 billion annually, as they weigh whether to send money home now or wait for further gains.

💡 Why it matters?

• The Indian rupee has already depreciated by 1.8% in early 2025, surpassing its 1.5% drop in 2023 and nearing half of 2024’s 3% decline. The Pakistani rupee remains under significant pressure.

• If the dirham appreciates by 5%, Indian families could receive Rs10,000 more per $1,000 remitted.

• However, Gulf residents may face rising costs, as a stronger dollar can drive inflation in the region.

• South Asian economies are at risk, with India’s oil import costs rising and foreign investors exiting Indian markets due to a weakening rupee.

🔜 What’s next?

• Goldman Sachs predicts the dollar index could hit 109 points, while the Indian rupee may weaken to Rs90 per dollar.

• South Asian central banks may intervene by selling dollars or imposing capital controls, but long-term dollar strength could strain forex reserves.

• India’s $600 billion forex reserves provide a buffer, but prolonged depreciation could increase inflationary risks.

• The Gulf’s economic position strengthens, but South Asia faces mounting financial headwinds, particularly in trade, remittances, and energy costs.

Markets

RTA and Dubai Holding Sign AED 6 Billion Agreement to Boost Dubai’s Road Infrastructure

📰 What is it about?

• Dubai’s Roads and Transport Authority (RTA) and Dubai Holding signed a AED 6 billion agreement to enhance road access and mobility across key developments in the emirate.

• The agreement includes new bridges, roads, and infrastructure upgrades in major areas such as Jumeirah Village Circle, Palm Jumeirah, Business Bay, and International City (Phase 3).

• The initiative aligns with Dubai’s urban expansion goals, improving connectivity and reducing travel times in key districts.

💡 Why it matters?

• The infrastructure improvements will reduce travel time by up to 70%, easing congestion in high-density residential and business districts.

• Pedestrian safety will be enhanced with new bridges in Palm Jumeirah and Business Bay, replacing at-grade crossings.

• The expansion of internal roads and intersections will support Dubai’s growing population and economic activities, ensuring seamless mobility for residents and visitors.

• The project strengthens Dubai’s position as a global leader in urban development and infrastructure innovation.

🔜 What’s next?

• Four new access points in Jumeirah Village Circle, doubling the capacity of entry and exit roads.

• New bridges to improve access to Dubai Production City, cutting internal road congestion by 50%.

• Upgrades in Business Bay, including an additional pedestrian bridge and smoother traffic flow at Sheikh Zayed Road intersections.

• Expansion of road networks in International City (Phase 3), reducing travel time from 15 minutes to just 5 minutes.

• Ongoing collaborations between RTA and developers to ensure future-ready infrastructure that keeps pace with Dubai’s rapid growth.

US Secretary of State Signs Declaration to Fast-Track $4 Billion in Military Aid to Israel

What is happening?

• U.S. Secretary of State Marco Rubio has signed a declaration to accelerate the delivery of $4 billion in military aid to Israel amid the ongoing Israel-Hamas conflict.

• The Trump administration has approved nearly $12 billion in arms sales to Israel since taking office on January 20.

• This latest move follows the State Department's recent approval of a $3 billion weapons sale, including bombs and demolition kits.

• The administration bypassed congressional review by invoking emergency authority to speed up the process.

Why it matters:

• Israel remains in a fragile ceasefire with Hamas, and the continued supply of military aid underscores U.S. support amid ongoing tensions.

• The decision to sidestep congressional oversight highlights the administration’s urgency in delivering arms without delay, despite concerns from some lawmakers.

• The rescinding of Biden-era policies means the U.S. is no longer required to report potential violations of international law involving U.S.-supplied weapons.

• Most U.S. humanitarian foreign aid has been eliminated, shifting focus entirely to military support.

What’s next?

• Israel has agreed to a new temporary ceasefire proposed by Trump’s envoy, Steve Witkoff, covering Ramadan and Passover.

• Ceasefire violations and accusations from both Israel and Hamas continue, casting doubt over the next phase of the truce.

• The second phase of the agreement is expected to include more hostage and prisoner exchanges, alongside steps toward a potential long-term resolution—but uncertainty remains.

🔍In other news…

• In just two years, Wio Bank PJSC has become one of the world’s top 10 most profitable neobanks.

• Umm Al Qura’s IPO Attracts $126 Billion in Record Demand.

• Kumulus Water Expands into the Gulf: Innovating Water Solutions for a Region Facing Scarcity.

The Latest from the Smashi Business Studio

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Here’s to a productive week ahead! 💪

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