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NEW DELHI — India's long-held position as the world's top diamond polisher is being challenged by soaring output from China, compelling the south Asian country to seek help from ally and top rough diamond supplier Russia to defend its market share.

India has traditionally relied on the middlemen in trading hubs of Antwerp, Tel Aviv and Dubai for its supply of rough diamonds, which mainly come from Russia or Africa. Most of the world's diamond output is sent to India for cutting and polishing before being retailed around the world.

But China has managed to break the established trade route by getting diamonds directly from African mines in which Chinese companies have a stake. This has boosted the value of China's net exports of polished diamonds by 72 per cent in the past five years to $8.9 billion.

While India's exports, supplied by firms such as Asian Star, Gitanjali Gems Ltd. and Venus Jewel, rose 49 per cent to $14 billion over that time, shipments have seen a sharp drop this year.

"China's active procurement of rough supply from African countries was reducing the supply available to Indian manufacturers," said Sandeep Varia, an executive of Indian industry body Assocham. "Many units across the country had to lay off workers due to losses."

As a result, China's share of the global polished diamond market has tripled to 17 per cent in the past decade, according to data from the United Nations. India's share has fluctuated between 19 and 31 per cent.

Bring in Russia

Indian Prime Minister Narendra Modi, who comes from the western state of Gujarat where the polishing industry is centred, has answered calls to bolster the diamond sector by convincing Russia to sell rough diamonds directly to India.

During President Vladimir Putin's visit to New Delhi this month, Russia's state-run diamond monopoly Alrosa  signed a dozen deals to increase direct rough diamond deliveries to India that would help reduce the cut taken by middlemen in the secretive precious gems trade.

The direct deals would also reduce risks linked to Western sanctions imposed over Russia's annexation of Crimea, while Modi is additionally seeking arrangements that would allow Russian jewellery makers to send rough diamonds to India and re-import polished stones duty free.

But to compete effectively with China, India will also need to streamline its tax and import rules, industry sources said.

"China is not going to displace India as the leading diamond polishing hub any time soon, but India needs to reform its archaic tax rules to make the Indian diamond polishing industry more attractive for foreign miners," said Martin Rapaport, chairman of diamond and jewellery service firm Rapaport Group.

India is looking to build a special notified zone where companies can import rough diamonds on a consignment basis and re-export unsold ones, mirroring China's investor friendly trading zones that avoid complicated export and import taxes.

"These are positive moves for the industry," said Mehul N. Shah, committee member of India's Bharat Diamond Bourse. "It will increase profit margins of the Indian diamond manufacturing industry and make it more competitive."

Despite China's upper hand in securing rough diamonds, its cutting and polishing industry is not as organised as India's and rising labour costs are a problem.

"The Chinese diamond polishing industry works on a contract-basis and through joint ventures," said Rapaport. "They are consistent at mass producing small stones, but lack the expertise required for bigger and finer stones."

RIYADH — Saudi Arabia announced a 2015 budget with a huge deficit at the weekend as the world's largest crude exporter begins to feel the impact of its own decision not to shore up oil prices.

The government announced the $38.6 billion deficit on state-run television, saying it would nonetheless boost projected spending by tapping its vast financial reserves.

The lead producer in the Organisation of the Petroleum Exporting Countries (OPEC), Saudi Arabia has insisted the group will not move to strengthen global oil prices despite a drop of nearly 50 per cent since June.

OPEC has maintained a production ceiling of 30 million barrels per day, in a move analysts say is aimed at stifling competition from new market players with higher costs, in particular North American shale oil producers.

Saudi officials have vowed not to boost production no matter how low prices go, regardless of the impact on the country's coffers.

The budget announced for next year sees spending at 860 billion riyals ($229.3 billion) and revenues at 715 billion riyals ($190.7 billion).

Projected spending is slightly higher than planned for this year, but revenues are 140 billion riyals lower than estimates for 2014, said the statement read after a Cabinet session chaired by Crown Prince Salman Bin Abdul Aziz.

The 2015 budget shortfall is the first deficit projected by the OPEC kingpin since 2011 and the largest ever for the kingdom.

Finance Minister Ibrahim Al Assaf said the kingdom was in good enough shape to see out the downturn.

"The challenge was bigger than expected. We continued to revise the budget figures as oil prices dived," Assaf told Saudi TV. "Despite the deficit, we will continue to spend on development projects... We have the buffers to bear the drop."

Assaf said everyone agreed oil would rebound and that it was only a question of when.

In the past decade, Saudi Arabia overspent budget projections by more than 20 per cent and if the trend is maintained next year, analysts say the deficit will be much higher.

"I believe we are headed for a difficult year in 2015. I think the actual deficit will be around 200 billion riyals because actual revenues are expected to be lower than estimates," Saudi economist Abdul Wahab Abu-Dahesh said.

"Spending in the budget is not in line with the sharp decline in oil prices," he added.

The finance ministry also announced the 2014 preliminary actual budget figures, saying it expects a deficit of 54 billion riyals, the first shortfall since 2009.

Highest spending
in history 

The ministry said that, according to the preliminary figures, revenues in 2014 were at $278.9 billion, 22 per cent higher than projected.

But spending was at $293.3 billion, the highest in the kingdom's history and about $33 billion more than expenditures in 2013.

The rise was due to huge expansion projects at Muslim holy sites in Mecca and Medina, an increase in spending on development and foreign aid.

The price of oil, which makes up around 90 per cent of public income in Saudi Arabia, has lost about half of its value since June due to a production glut, weak global demand and a stronger US dollar.

In royal decrees issuing the budget, King Abdullah called for "rationalisation of spending" and for the "accurate and efficient implementation of the budget" in 2015.

If oil prices remain at the current level of about $60 a barrel for benchmark Brent crude, Saudi Arabia is expected to lose half of its oil revenues of $276 billion posted in 2013. Oil income this year is expected at $248 billion.

But the wealthy kingdom, which pumps about 9.6 million barrels per day, can easily tap into huge fiscal buffers, estimated at $750 billion, to meet the deficit.

King Abdullah authorised the finance minister to draw from the reserves or to borrow to meet the deficit.

Ratings agency Standard and Poor's lowered its outlook for Saudi Arabia to stable from positive following the oil price slide.

But it also affirmed its high ratings for Riyadh over the "strong external and fiscal positions" it has built up in the past decade.

MOSCOW — Russia's central bank offered on Wednesday to help leading exporters refinance foreign debts next year, expected to be one of the toughest of President Vladimir Putin's 15-year rule for the economy due to Western sanctions and a plunge in oil prices.

The bank said it would lend dollars and euros to major companies that were willing to put up their foreign borrowings as collateral.

The move means the state will in effect take on credit risk for the companies, whose foreign debt obligations have shot up in ruble terms because of the currency's sharp slide this year.

Even before the move, Standard & Poor's (S&P) ratings agency put Russia's sovereign credit outlook on "credit watch negative", meaning it could be downgraded to junk as soon as January due to a "rapid deterioration of Russia's monetary flexibility".

S&P, Moody's and Fitch all now rate Russia one notch above junk. The finance ministry said it was holding talks with ratings agencies to explain the situation in the economy.

The authorities have taken several steps in recent weeks to arrest the ruble's slide and avoid a spike in inflation after years of stability, developments that could threaten Putin's popularity.

They include a sharp interest rate hike, curbs on grain exports and informal capital controls.

While Russia's sovereign foreign debts are minimal, state and private companies and banks have accumulated $600 billion in foreign debts, of which around $100 billion are due next year.

The ability to repay the loans or roll them over has been severely reduced this year by Western sanctions, imposed on Russia for its actions in Ukraine, which effectively shut its companies and banks out of Western debt markets.

But the economic crisis in Russia's heavily oil-dependent economy goes wider. Moody's ratings agency said on Tuesday that it expected Russia's gross domestic product (GDP) to contract by 5.5 per cent in 2015 and 3 per cent in 2016, under the effect of the plunge in oil prices and the ruble's slide.

"These developments will likely lead to a severe deterioration in the operating environment for Russian corporates, namely higher inflation, unemployment and debt-servicing costs as well as lower domestic demand, resulting in a deeper and more protracted decline in domestic economic activity than previously anticipated," Moody's said.

Russia has around $414 billion in foreign exchange and gold reserves, down from around $510 billion at the start of the year, after spending heavily to prop up the ruble as the price of oil, Russia's main export earner, almost halved from this year's peaks in June.

The ruble, which dipped last week to 80 to the dollar, has since recovered to around 55, still about 40 per cent down since the start of the year.

The central bank said Wednesday's move was aimed at "helping to refinance foreign credits by Russian exporters in foreign currencies maturing in the near future at a time of their restricted abilities to access international capital markets".

It said these lending operations would also help to bring the ruble exchange rate into line with fundamentals and reduce volatility. Loans are to be provided for up to one year at auctions, at a minimal rate of Libor plus 0.75 per cent.

Oleg Kouzmin, an economist at Renaissance Capital, said the amount allocated was small enough not to undermine the central bank's ability to support the ruble.

State-controlled VTB Bank said it would use the facility if needed but that "currently, there is no such need".

The central bank and the finance ministry have also promised to help banks with extra ruble liquidity and regulatory measures.

The lower house of parliament rushed to pass a draft law on Friday that will give the banking sector a capital boost of up to one trillion rubles ($18.33 billion).

Dmitry Polevoy, chief economist for Russia at ING, said the central bank had taken too long to act: "The problems with foreign exchange funding emerged in early September and have only been getting worse since then. The Central Bank of Russia has mostly been putting out fires rather than preventing them."

Separately, an influential farm lobby group said on Wednesday that Russia's grain exports have stopped due to curbs brought in to protect domestic supply, putting big deals at risk.

Russia's main wheat buyers are Turkey, Iran and, very vulnerable to supply disruption, Egypt.

Moscow imposed informal grain export controls with tougher quality monitoring and limits on railroad loadings earlier this month, as it tackles a financial crisis linked to plunging oil and Western sanctions.

"Since last Thursday not a single vessel, which had been due to sail under contracts, has left," Arkady Zlochevsky, the head of Russia's Grain Union, the farmers lobby group, said.

Officials also plan to impose duty on grain exports.  Zlochevsky said its exact level was an unimportant detail, as he was sure it would be prohibitive.

"All loadings are suspended, there is only a need to legally formalise it," Zlochevsky added. Global wheat futures rose after his comments.

A spokeswoman for Russian Deputy Prime Minister Arkady Dvorkovich, who had promised to prepare the proposal for an export duty, was not available for comment.

Repeated restrictions

Zlochevsky criticised the decision to impose restrictions for the third time in six years.

Russia imposed a duty on wheat exports in 2008 and an official ban in 2010 when a drought hit its crop.

The 2010 ban was partially responsible for triggering social unrest and a revolution in Egypt as more than 500,000 tonnes were not supplied and global prices rose damaging Egypt's state bread subsidy programme, Zlochevsky said.

About 3 million tonnes of grain due for export until the end of January were now stuck, Zlochevsky indicated.

As a result, Russia may fail to supply wheat to Egypt's General Authority for Supply Commodities (GASC), the state buyer of the world's largest wheat importer, in January, he said. "Of course, it includes supplies to GASC. How would we be able to supply it?" 

He remarked that shipments would only be possible if and when the government makes an exception for Egypt.

Mamdouh Abdel Fattah, GASC's vice chairman, told Reuters on Wednesday that trading companies were obliged to abide by their contracts to ship Russian wheat to Egypt.

GASC purchased 180,000 tonnes of wheat for January shipment, of which 120,000 tonnes for January 11-20 shipment purchased on December 11 and 60,000 tonnes for January 21-31, bought on Saturday.

"If there will be no Russian wheat available for Egypt by a government decision then the firms can proceed to negotiate with GASC to change the origin in the contract," a Cairo-based trading source said.

Russia, expected to be the world's fourth-largest exporter this year, had been exporting record volumes from a large grain crop of 105 million tonnes.

"What's clear is that they won't sell anything anymore," a European trader said. "Now the market wants to have more details on what the government will do concretely."

MUSCAT — From desert camping to luxury hotels, turtle watching, and even the Arabian Peninsula's first Italian-style opera house, Oman is hoping to carve out a place on the global tourist track.

Heavily reliant on energy exports, the tiny Gulf sultanate is keen to diversify its economy, especially as the drop in global oil prices begins to bite.

But despite its natural beauty and rich culture, Oman's tourism industry has a long way to go.

"Oman reflects the true Arabian history and culture," said Amina Al Balushi, an assistant director with the tourism ministry.

"We really need to capitalise on this," she added, indicating that the ministry is preparing a 25-year tourism strategy to be unveiled next year.

Western tourists like 46-year-old Marc Jost, who has made five trips to Oman, need no convincing.

"I can't get enough," the Swiss visitor told AFP as he strolled in the Mutrah Souk, a historic covered market in the capital Muscat. "The weather is always good. People are very nice."

Bordering Saudi Arabia, the United Arab Emirates and violence-wracked Yemen, Oman has been an island of stability under Sultan Qaboos, who has ruled since overthrowing his father in a bloodless coup in 1970.

Qaboos, now 74, has won praise at home and abroad for transforming a former backwater into a modern state.

In 2011, Oman was caught up in the Arab Spring protest movement which touched much of the region. 

Several civilians died in demonstrations that shook the government, leading Qaboos to implement a series of reforms and to arrest scores of activists.

Oil price pressure 

One of the biggest challenges facing the country now is its reliance on oil, which accounts for 75 per cent of state revenues, after the price of crude nearly halved since June.

The drop has put pressure on the government, which needs a higher oil price than most other Gulf states to balance its budget. Oman does not have financial reserves as vast as its neighbours.

"The government of course is aiming to diversify the economy through developing tourism as an important sector," Balushi said.

Oman attracted roughly 2.1 million visitors in 2013, up about 50 per cent over the previous two years, according to the tourism ministry.

More than 37 per cent of visitors last year came from Gulf countries, although Oman is also attracting a growing number of tourists from Britain, Germany, the United States and other Western nations, tourism ministry data show.

The country also invested more than $660 million (540 million euros) last year in new hotels and other tourism assets, according to the World Travel and Tourism Council, an industry body.

Still, tourism's direct contribution to the gross domestic product (GDP) reached only 3 per cent, or about $2.5 billion, last year.

This "looks like beans", said Fabio Scacciavillani, chief economist at the Oman Investment Fund, the country's sovereign wealth vehicle.

"These figures do not portray a thriving situation," Scacciavillani told a tourism conference in Muscat. "That's strange, because Oman can probably live off tourism. If Oman didn't have oil, it would most likely be an economy based on tourism."

'Ancient soul' 

Tourism guidebooks have lauded the country, with Lonely Planet praising its "abundance of natural beauty" and "ancient soul". 

But Oman has suffered from a lack of tourism infrastructure and the belief among many tourists that the entire Middle East is off-limits because of unrest.

Officials are hoping to change that, both with continued investments and efforts to put forward the country's stability.

"We are trying to promote... that Oman is separate, Oman is safe," said Haitham Al Ghassani of the tourism ministry's promotion department.

For years, Oman said that by 2020 it aimed to attract 12 million tourists annually, more than double the number that visited Jordan last year.

But Balushi said when the ministry releases its 25-year strategy next year it will probably set an easier goal.

"We are not looking for mass tourism," Ghassani said. "We are more selective."

He admitted the country's lack of infrastructure was a problem, making hotel room rates in Oman "very expensive" because of the lack of supply.

Oman has already won over tourists like Markus Roloff, who hopes the government steers development carefully.

The 47-year-old German made the first of his seven trips to Oman in 1990.

"It's just a beautiful country and I'm impressed by what the sultan did after 1970, how the country developed," he said.

Over the past two decades, Roloff has watched the tourist scene transform from a smattering of visitors to crowds pouring off cruise ships.

He worries that if too many discover Oman, its quiet charms may be lost. 

"I think that tourism will change the country," Roloff said.

MANAGUA — Nicaragua on Monday announced the start of work on a $50 billion shipping canal, an infrastructure project backed by China that aims to rival Panama's waterway and revitalise the economy of the second-poorest country in the Americas.

The groundbreaking was largely symbolic, as work began on a road designed to accommodate machinery needed to build a port for the canal on the Central American country's Pacific coast.

Nicaragua's government says the proposed 278-kilometre canal, due to be operational by around 2020, would raise annual economic growth to more than 10 per cent.

The canal could also give China a major foothold in Central America, a region long dominated by the United States, which completed the Panama Canal a century ago.

Construction of the new waterway will be run by Hong Kong-based HK Nicaragua Canal Development Investment Co. Ltd. (HKND Group), which is controlled by Wang Jing, a little-known Chinese telecom mogul well connected to China's political elite.

Flanked by Nicaraguan President Daniel Ortega, who is a former Marxist guerrilla leader, Wang Jing said the tender for the preliminary design of the project would be offered by the end of the first quarter of 2015, by which time an environmental impact study would also be finished.

By the end of the third quarter, excavation work would begin, with a tender for the design of the locks due by the end of the year, he added.

More than a year since it was first announced, the project faces widespread scepticism, with questions still open about who will provide financing, how seriously it will affect Lake Nicaragua and how much land will be expropriated for it.

"Given how much this will cost, it's hard to take a stance on whether it will happen or not until there is a signal whether that money is available or not," said Greg Miller at consultancy IHS Maritime.

In the Americas, only Haiti is poorer than Nicaragua.

Earlier, Nicaraguan presidential spokesman Paul Oquist said feasibility studies, including a McKinsey report that experts say will define interest in financing the canal, had been delayed by changes to the route and would be ready by April.

Oquist said the "core financing" would come from public and private Chinese money, without giving a percentage.

But he added that Nicaragua is seeking international funding and rejected the idea that China will bankroll the project worth roughly four times Nicaraguan gross domestic product.

According to Wang Jing, HKND Group is preparing to launch an initial public offering.

He told reporters in Managua that he hoped the listing would take place in the stock market that offered the best conditions.

Wang Jing gave no details of how much HKND aimed to raise, nor when the offering might be. He said the company was preparing a prospectus which would reveal the investors behind the waterway.

TEL AVIV — Israel's Antitrust Authority on Tuesday moved to scrap a deal that gave US giant Noble Energy and Israeli partner Delek control over the Leviathan offshore gas field, citing monopoly concerns.

The decision, pending a confirmation hearing, effectively dismantles the monopoly held by Noble and Delek over Leviathan and Israel's smaller offshore gas findings.

"The entry of Delek and Noble into Leviathan created a situation in which these groups control all the gas reserves off Israel's coasts," the Antitrust Authority said in a statement.

The authority added that it would consider defining the two firms' Leviathan partnership as a "cartel".

The size of the Leviathan field is estimated at 535 billion cubic metres (bcm) of natural gas, along with 34.1 million barrels of condensate, making it the largest gas deposit found in the world in a decade.

Noble and Delek also control the Tamar field, which holds 250 bcm of natural gas, and lies 80 kilometres west of the northern Israeli port city of Haifa.

The authority had initially proposed an agreement under which Noble and Delek would enter Leviathan on condition they sell two smaller offshore gas fields to enable competition, which was to have been submitted to court within two weeks.

But it eventually went back on its decision.

"The authority received significant indications the agreement would not create a solution to the problem of competition," the statement said.

Deputy attorney general Avi Licht had recently called upon director generals of the government ministries to "rethink" the gas fields arrangement.

In a letter sent last week, Licht warned of the situation of "an essential infrastructure in Israel" being held "by one private body”, and called to "rethink" the regulation of the field.

Noble Energy slammed the antitrust authority's move, warning it would cast "a shadow over the future of the gas and crude oil industry in Israel".

Ahead of the announcement, Bini Zomer, director of Noble's local branch, warned any such move would "affect the future of Noble Energy investments" in Israel.

And Yitzhak Tshuva, owner of Delek, warned the move would lead to a drop of Israel's credit ratings, calling himself a "victim" in an interview on military radio.

Israel's offshore gas findings have shifted it from costly and unreliable imports to a growing self-sufficiency and the potential to become an energy exporter, recently advancing agreements to export gas to neighbours Jordan and Egypt.

Israel had relied on Egypt for roughly 40 per cent of its gas needs, but in April 2012 Egypt annulled the contract following a spate of bomb attacks that targeted the pipeline used to transport natural gas to Israel and Jordan.

SEOUL — South Korea on Monday trimmed its economic growth forecast for 2015 to 3.8 per cent from 4 per cent as it vowed to continue expansionary policies aimed at spurring domestic consumption.

The revised projection comes after the country's central bank this month warned its own 3.9 per cent growth forecast would be "difficult" to maintain as domestic demand alternated between positive and negative territories and a weak yen hurt the price competitiveness of South Korean firms against Japanese rivals abroad.

The finance ministry said Monday that, in addition to the 2015 growth forecast being lowered, its estimate for this year's economic growth was also revised down to 3.4 per cent from 3.7 per cent. South Korea's economy grew 3 per cent last year.

"We must maintain our expansionary macroeconomic and fiscal policies so that people can feel the effect of economic recovery," President Park Geun-hye said at a meeting of economic ministers on Monday.

Consumer spending has recovered at a slower-than-expected pace this year despite a government stimulus package and a series of cuts in the Bank of Korea's key interest rate, which now stands at 2.0 per cent.

The ministry said domestic demand may pick up next year, helped by lower oil prices.

"Our economy will pick up gradually thanks to our expansionary macroeconomic policy, lower international oil prices and an expected global economic recovery," Finance Minister Choi Kyung-hwan said.

But economic weakness in China and Europe, as well as the US Federal Reserve's expected policy tightening, might weigh on South Korea's growth, the ministry said.

It also said consumer prices are expected to rise about 2 per cent next year, faster than this year's estimated 1.3 per cent rate.

The country's current-account surplus for 2015 may fall to $82 billion in 2015 from $89 billion this year, it added.

LONDON — Plunging oil prices have increased the strain on the many small energy firms operating in the North Sea who were already facing diminishing returns from an area that once helped power the British economy.

With fields more mature and oil harder to find, heavyweights such as BP and Shell turned their attention elsewhere long ago, leaving smaller independent firms to explore the more remote areas.

As many as 133 companies are now active in the British part of the North Sea. However, a third of those companies are deemed by experts to be too small to finance big ticket projects and a  fall of around 45 per cent in oil prices since June has lessened the sector's appeal to big investors.

Efforts to find new oil and gas fields have slumped to the lowest level since exploration started in the 1970s because of reduced investment. That has sharply cut the amount of revenue the government can expect to take from the sector in taxation.

"Nothing less than radical change will prevent the premature demise of the basin, let alone maximise economic recovery," said Dave Blackwood, former head of BP's North Sea business, adding his voice to industry calls for tax cuts.

Britain's finance ministry has said it is working on a reform of its oil and gas tax policy but its drive to reduce the budget deficit will limit its ability to cut rates. An election next May only adds to the political uncertainty.

British oil companies pay a supplementary levy on top of production income tax, which will drop by 2 percentage points to 30 per cent on January 1. The oil industry is crying out for steeper cuts to help dampen the impact of surging costs.

"You've got to get the tax change right. If you put it up too much, and arguably that has happened, then it strangles activity," Mark Routh, chief executive at small North Sea player Independent Oil and Gas, told Reuters.

Receipts fall

During the early 1980s, annual tax receipts to Margaret Thatcher's government peaked at 12 billion pounds ($18.8 billion) when booming North Sea oil output coincided with high oil prices, four times the 3 billion pounds predicted for 2014.

Promised oil revenues were in part used to justify Scotland's independence movement which banked on oil to underwrite a historic break for the rest of Britain, thwarted in a referendum in September.

Instead, Brent crude prices fell as low as $58.5 a barrel last week and the major oil firms are shifting their focus to more promising new areas in Southeast Asia, Africa and shale oil plays in North America.

While Britain's growing pool of small-scale firms, such as Parkmead, Hurricane Energy and Infrastrata , can be more nimble when it comes to adopting new technologies, many of the areas remaining to be explored are remote and therefore costly.

"If they don't have the money they can't fund activity," indicated Brian Nottage, general manager at oil and gas advisory Hannon Westwood.

An example is Atlantic Petroleum, which produces oil in the UK North Sea and has cut its exploration spending for 2015 by 75 per cent, arguing it needed to save cash to fund its operating fields in the current oil price environment.

An increasing number of firms looking to enter new fields are now offering "farm-outs", allowing investors including rival companies, to take a stake in the new project.

"[But] not that many are successful, hence the problem that we see in exploration activity," Nottage said.

Of the 133 companies in the UK North Sea, more than a third have not developed reserves in the basin, meaning they cannot bank on any revenue from production in the short term.

In the longer term, the large number of small-scale players accessing the North Sea exploration market could lead to merger activity to create more robust businesses.

"The UK North Sea is definitely at an inflection point. That inflection point will either send it down or have the potential to make sure it remains as a basin for another 10-15 years," said Alison Baker, head of PwC's UK oil and gas practice

AMMAN – The Central Bank of Jordan (CBJ) on Sunday closed down a major currency exchange company for administrative and financial violations.

Alaa Eddine Diraniyeh, president of the Jordanian Exchange Association (JEA), said Monday the CBJ decided to close down Samhouri Exchange for a month until the company rectifies violations committed by the management. 

In a phone interview with The Jordan Times, Diraniyeh said the CBJ and the syndicate are working to secure that all money transfers be paid by the company soon. 

Vijay Neekhra, an Indian worker in Jordan, transferred $5,000 to the US and he was afraid the money would never reach the beneficiary. 

The amount was transferred on December 5. 

Also, Binu Johan transferred $1,583 to his family in India on December 8. 

Both money senders were concerned they lost the money when they heard the news about the closure of Samhouri Exchange, which operates seven branches in Amman. 

Copies of the transaction receipts were made available to The Jordan Times. 

But Diraniyeh assured all money transactions made via the exchange company will reach their destinations. 

"I want to assure all clients of the exchange firm that all inbound and outbound money transfers will be paid by Samhouri very soon," he said. 

There are around 120 currency exchange firms in Jordan, according to the syndicate's figures. 

MOSCOW – Deep recession, skyrocketing prices and a fragile banking system: Although the ruble seems to have stabilised after its abysmal drop past week, Russia still faces the heavy consequences of the turbulence.

For most Russians, the week ended with relief: After trading at unbelievable levels of 80 to the dollar and 100 to the euro, the ruble appears to have stabilised at around 60 and 73, respectively.

A double whammy of Western sanctions over Ukraine and plunging oil prices finally caught up with the country that depends on energy exports for half of government revenue, and the authorities came out of their apparent stupor only as the ruble's plunge in value had already gained momentum.

After the ruble fell by nearly 10 per cent on Monday, the central bank moved beyond its limited currency market interventions and in the middle of the night hiked the key interest rate by a tremendous 6.5 percentage points to 17 per cent.

But that failed to stop the panic, with the ruble dropping by 20 per cent on Tuesday — bank websites crashed as too many users tried to connect, and crowds packed Ikea until 2:00am to get a hold of goods before announced price increases took effect.

'Confidence shaken'

President Vladimir Putin tried to put a brave face on the crisis at his annual year-end press conference, saying that recovery is "inevitable", although he acknowledged it could take up to two years to materialise. 

He did not announce any economic reforms or specific solutions to the crisis.

"The trend of the economy in the next six months is certainly going to be much worse" after this past week, said Chris Weafer, an analyst with Macro Advisory consultancy. 

"Confidence is shaken — in the central bank, in the currency, in the direction of the economy," he told AFP. 

"Consumption and investment are going to take a hit because of higher [interest] rates, inflation will be higher because of the weaker currency... the banks are going to turn to the government and shelves will be empty after the New Year."

In a sign of the challenges ahead, several suppliers have halted deliveries in a bid to raise prices. 

Some stores decided to close their shutters — Apple stopped sales via its Russian online store, while Ikea suspended sales of kitchens and home appliances and warned that prices on the website "may differ from prices in stores".

Opel and Chevrolet are no longer delivering to dealerships.

Russian media said that stores selling imported alcohol or clothing including Zara, Topshop and Calvin Klein are also trying to avoid selling at a loss while observers predict that many Western brands will soon disappear from Russia.

That trend has begun and inflation — already close to 10 per cent — threatens to reach 15 per cent in the coming months. 

This will hit the purchasing power of Russians, whose real incomes already declined in the first 11 months of the year compared with 2013.

With the ruble having now lost nearly 50 per cent of its value against the dollar in the past year imported food and consumer goods are quickly becoming luxuries.

Even the central bank estimates the economy could suffer a sharp contraction of nearly 5 per cent next year if oil prices stay at current levels.

'Crisis spreading' 

"Events have moved quickly and there are now growing signs that the currency crisis is spreading to the banking sector," wrote emerging markets economist at Capital Economics William Jackson.

Russia's financial sector is particularly vulnerable, as its state-controlled banking behemoths and a multitude of smaller institutions have been unable to raise funds in the West due to sanctions over Russia's annexing Crimea and support for separatists in Ukraine.

The central bank announced measures Tuesday aimed at ensuring their survival by improving access to liquidity and easing accounting standards.

On Friday, Russian lawmakers approved a bill on the recapitalisation of banks worth 1 trillion rubles ($16 billion, 13 billion euros). The finance ministry is also hoping to increase capital in the banking sector by 13 per cent and the volume of loans issued by 15 percent.

For many Russians, the downward spiral of the ruble brought back memories of the crisis in 1998, when Russia defaulted on its debt. 

"People are behaving like it's 1998 but there is no reason for it: Russia was a bankrupt country then and now it's actually financially in a pretty good shape," Weafer said.

High oil prices over the past decade have allowed Moscow to pile up substantial hard currency reserves. Even after having spent heavily to support the ruble, the central bank's reserves still stand at around $400 billion. 

Public debt is just over 10 per cent of GDP. The budget remains balanced and the government has a big rainy day fund to draw upon to sustain social spending.