WOTS THUR FEB 10 21 scroll down to see the WOTS
These are the articles I discussed in the podcast at:
A final round of the dollar and the Iraqi dinar in the budget .. Can the exchange rate be changed?
Since the Iraqi government announced a change in the exchange rate of the dollar against the dinar as a result of the drop in oil prices, and what the Corona pandemic has produced on the Iraqi economy, the citizen, in addition to the merchant with various groups, is living a period of wandering in financial dealings, which resulted in a "good opportunity" for conflict between the exploiters For crises in such circumstances.
The value of the US dollar after the Iraqi government resorted to reducing the dinar, in an attempt to pull the country out of the financial and economic crises, reached 1450 dinars, after it had been stable at the threshold of 1200 dinars over the past years, which led to great losses, close to a quarter of the value of the Iraqi savings of money , As well as a quarter of their monthly salary.
Negative effects despite reassurances
Economic academic Jawad Al-Kaabi comments, in a statement to "Ultra Iraq," saying that "the decision to reduce the dinar has led to more impoverishment of the poor, bankruptcy and the suspension of small and medium businesses, due to the increase in the prices of food, medicine and imported production requirements by more than 30%, indicating that" and after each The damage that occurred The decision-makers (the prime minister, the minister of finance, and the governor of the central bank) continue to insist on their unfair decision for the right of the poor citizen and productive business owners in the real economy. "
This comes at a time when the Iraqi government reassured citizens about the decision to reduce the value of the official currency, stressing that it "will not affect the classes that depend on local goods." Prime Minister Mustafa Al-Kazemi also cited during his speech at the Iraqi Council of Ministers session, in several countries, including "the Emirates." And South Korea and Singapore when they made difficult decisions in the past to reform the economy.
Will the return attempts succeed?
A number of MPs in Parliament are calling for rallying pressure towards restoring the exchange rate to its previous position or reducing it to 130,000 as a compromise solution, while Deputy Nahida al-Daini, in a televised interview affiliated with Ultra Iraq, did not rule out an agreement between the leaders of political blocs to raise the exchange rate of the dollar. Against the Iraqi dinar, hoping to reduce the deficit in the country's general budget, noting that "the economic crisis will continue for the coming years with the absence of industry and agriculture," while parliamentarians say that manipulating the exchange rate is not within the powers of the House of Representatives.
A member of the Parliamentary Finance Committee, Sherwan Mirza, believes that “the exchange rate of the dollar has not been tampered with in the 2021 budget, given that the country's financial policy has been drawn on the price stated in the draft law, stressing that“ the exchange rate is within the government's authority and we do not think it intends to change it in The attached copy of the bill. "
Regarding the inclusion in the budget of a paragraph in the budget for the compensation of contractors in Iraq from the damage of the exchange rate, the expert, economist Ahmed Hathal, criticizes this step, stating that "the greatest harm was on the shoulders of citizens, and the government should compensate citizens in the same way as compensating contractors, especially those covered by care networks." Social and low-income people. "
Hathal says to "Ultra Iraq", "The policy of raising the exchange rate to 1450 can be likened to a shock, and this policy is considered wrong to use because the economic situation did not allow this with the possibility of dispensing with the step and going to fight corruption in the financial pockets and outlets to save money, pointing to "Attempts to return the price to 130 thousand, which is currently being presented, should not be accepted as it would represent a new shock to the market and citizens regarding the debtor-creditor relationship."
Terms and conditions
In the end, the 2021 budget is approaching the date of approval next week, according to statements by MPs, and it seems that the issue of changing the exchange rate is impossible because the law was built on the basis of 1450 dinars to the dollar, with the price of a barrel of oil at 45 dollars.
And economic analyst Hussein Al-Askari confirms, "The issue of the dollar exchange rate came as a result of conditions imposed by the World Bank on Iraq after discussions that lasted for more than a month before the decision, indicating that" these conditions are in return for allowing an increase in currency exports abroad, and thus this represents another plundering process. After the damage to local goods and materials, whose prices have become very low, this weakens the national product. "
In his speech to "Ultra Iraq," Al Askari indicated, "There is some kind of truth in the movements of the representatives in the Iraqi parliament to return the exchange rate to the lowest level to preserve the purchasing power of citizens, as they depend on monthly and perhaps daily salaries and income, pointing to the need for Iraq to leave the issue of the economy. Rent-seeking and the end of dependence on abroad to import goods. Accordingly, the infrastructure must be rebuilt first, including the agricultural and industrial sectors. For example, the existence of the framework agreement between Iraq and China is the key to a solution available for implementation. "
Meanwhile, the Al-Fateh Alliance came out with a new position, to depend on the vote of its more than 50 deputies on the 2021 budget bill by adopting the dollar exchange rate of 119 thousand dinars, in addition to four other conditions demanding job grades and payment of dues to categories of free lecturers, at a time when MPs are demanding Their number exceeded 40 deputies by proposing a return of the exchange rate to 130 thousand dinars as a compromise solution to end the push and pull and conflict in the markets and stock exchanges.
With the movement of some political blocs in this regard, the Parliamentary Finance Committee confirms that the Iraqi dinar exchange rate against the dollar cannot be changed by the House of Representatives proposal or the signatures of parliamentarians.
Mirza: The draft budget will be ready for voting next Saturday or Sunday
Member of the Finance Committee in the House of Representatives, Shirwan Mirza, suggested that the committee finish its work, and that the draft budget be ready to be submitted to the vote on the next Saturday or Sunday.
Mirza explained that the committee has completed a large part of its work so far and continues to hold its meetings to end the remaining paragraphs of the budget project, indicating that the governments of Baghdad and Erbil have reached an agreement, but what hinders its implementation is the disagreement within Parliament and the Finance Committee, and the continued submission of new proposals by the Shiite blocs, and from Among them are proposals described as unconstitutional, and related to handing over the region's entire oil file and oil fields to Baghdad.
Will Kuwait devalue its currency to meet the liquidity shortage
IMF Executive Board Concludes 2020 Article IV Consultation with Iraq
February 11, 2021
Washington, DC: On February 8, 2021 the Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation [1] with Iraq.
The COVID-19 pandemic and a sharp decline in oil revenues have exacerbated Iraq’s longstanding economic vulnerabilities. Real GDP contracted by an estimated 11 percent in 2020, reflecting a slowdown in non-oil activity and cutbacks in oil output as a result of OPEC+ decisions. Large fiscal and external current account deficits of 20 and 16 percent of GDP, respectively, constrained the government’s ability to mount an effective fiscal response to the crisis.
The authorities have begun to take much-needed steps towards ensuring macroeconomic stability while protecting the vulnerable. To help safeguard foreign exchange reserves and reduce the external imbalance, the Central Bank of Iraq has announced a devaluation of the exchange rate. Alongside, the draft 2021 budget, submitted to Parliament, aims to reduce the fiscal deficit through measures to contain the unsustainable expansion of government wage and pension bills and to raise non-oil revenues, while significantly boosting targeted assistance to shield the most vulnerable. The authorities have also set aside sizable resources in support of their efforts to minimize the loss of life to COVID-19, including through acquisition and distribution of a vaccine.
The economy is expected to gradually recover, and the imbalances to narrow, although the outlook remains challenging. Real GDP is projected to return to its pre-pandemic level by 2024. The fiscal and external current account deficits are projected to decline over the medium term. Government debt is expected to peak in 2023 and decline gradually thereafter.
This outlook hinges on strong implementation of reforms and is subject to significant downside risks. Political constraints ahead of the parliamentary elections, renewed bouts of social unrest, or security risks could undermine the reform efforts, putting macroeconomic stability at risk. Furthermore, pandemic‑related risks and oil market uncertainties could further complicate the economic situation.
Executive Board Assessment [2]
Executive Directors agreed with the thrust of the staff appraisal. They noted that the COVID 19 pandemic and the sharp decline in oil revenues have further exacerbated Iraq’s existing significant socio-economic fragilities. Directors also noted the authorities’ efforts to strengthen the health policy response, boost social safety nets, and reduce the fiscal and external deficits. Nevertheless, downside risks to the economic outlook remain significant amid a challenging socio-political environment. Directors emphasized that implementing strong policies and structural reforms is essential to ensure macroeconomic stability and achieve sustainable and inclusive growth.
Directors emphasized that reducing fiscal imbalances is critical to ensuring fiscal and debt sustainability. They welcomed the authorities’ planned fiscal reforms in the “White Paper” and encouraged their careful prioritization and swift implementation while minimizing the impact on the vulnerable. To create room for the much-needed reconstruction and social safety nets, Directors highlighted the importance of strengthening public finances. To this end, they called for a comprehensive civil service reform to contain the public wage bill and recalibration of the pension system to put it on solid financial footing. Priority also needs to be given to increasing non-oil revenues and strengthening public financial management to reduce the fiscal risks stemming from off-budget expenditures and government guarantees.
Directors concurred that the recent exchange rate adjustment would help reduce external imbalances and preserve foreign exchange reserves. They underscored that a strong fiscal framework remains critical to ensuring the credibility of the new exchange rate peg as well as minimizing future need for monetary financing of the budget. Directors also saw need for further monetary policy measures by the central bank to contain inflation.
Directors stressed that wide-ranging structural reforms are necessary to cement macroeconomic stability and pave the way for higher and more inclusive growth. They underscored that reform efforts should focus on stemming the financial losses in the electricity sector. This requires sustained efforts to strengthen governance and improve collection, as well as gradual adjustment of tariffs to increase cost recovery and reduce arrears. In addition, Directors emphasized the importance of reducing corruption in key public institutions, continued improvement and effective implementation of the AML/CFT framework, restructuring of large state-owned banks to foster financial stability, and developing the private sector.
Directors noted the authorities’ interest in emergency financing with the Fund to support their stabilization and reform efforts with some Directors encouraging a longer-term arrangement to address structural challenges.
It is expected that the next Article IV consultation with Iraq will take place on the standard 12-month cycle.
then there is a long table or graph or whatever so if you want to see that go to the link link
Below here is the regular WOTS report
According to a reporter for The Shafq News Agency, the Central Struggle Stock Exchange in Baghdad recorded today, 145,900 Iraqi dinars for $100.
Baghdad's Central Struggle Stock Exchange opened at 145,950 Iraqi dinars on Wednesday, compared with 100 US dollars.
Our correspondent pointed out that the prices of buying and selling stabilized in the banking shops in the local markets in Baghdad where the selling price reached 146,250 Iraqi dinars, while the purchase price reached 145,500 dinars per 100 U.S. dollars.
In Erbil, the capital of Kurdistan province, the dollar also fell slightly, with the selling price at 146,100 dinars per 100 dollars, and the purchase at 146,000 dinars per 100 U.S. dollars.
Favorite Currencies Forex Quotes
| Symbol | Bid | Ask | High | Low | Open | Change | Time |
|---|---|---|---|---|---|---|---|
| USD/IQD |  1459.0000 | 1464.0000 | 1458.5000 | 1458.4000 | 1458.4000 | 0.2000 | 00:10 |
| USD/VND | 23010.0000 | 23020.0000 | 23003.2700 | 23003.2700 | 23003.2700 | 0.5200 | 01:30 |
| USD/CNY |  6.4569 | 6.4589 | 6.4572 | 6.4560 | 6.4560 | 0.0003 | 00:10 |
| USD/KWD |  0.3019 | 0.3029 | 0.3020 | 0.3019 | 0.3020 | -0.0002 | 05:11 |
| GBP/USD | 1.3821 | 1.3824 | 1.3859 | 1.3813 | 1.3833 | -0.0012 | 05:14 |
| USD/IRR | 42000.0000 | 42210.0000 | 42097.5000 | 42097.5000 | 42097.5000 | -914.4000 | 07:13 |
| USD/IDR | 13988.0000 | 13994.0000 | 14012.0000 | 13937.0000 | 13987.0000 | 1.0000 | 05:10 |
Representative source: The session to vote on the budget next Saturday
A representative source said that the parliament session to vote on the draft federal budget law for 2021 will be next Saturday.
A member of the Parliamentary Finance Committee, Sherwan Mirza, revealed two days ago the date for the 2021 budget to be presented for a vote in the House of Representatives.
Mirza told {Euphrates News} last Monday that “it is hoped that the final version of the general budget for 2021 will be presented next Saturday and we are waiting for political moves during these few days, and there is almost a political agreement on its formula.”
Mirza stressed that “next week it will be approved.”
The rise in oil covers a "disaster committed by the dollar" in Iraq: the results of a disaster will appear soon, unless there is a quick solution to it!
The economic expert, Ihssan Al-Kinani, warned that the continued exit of hard foreign currency from inside Iraq to the outside will have negative effects on the Iraqi economy, pointing out that any decrease in oil prices will have disastrous consequences for the loss of the currency.
Al-Kinani said, in statements monitored by "Yes Iraq": "The exit of foreign currency from Iraq has not noticed its negative effects at the present time due to high oil prices and the large amount of dollars entering the country.
He added that "the banking policy in Iraq is incorrect because of its reliance on the auction of selling the currency and not launching any investment projects to maximize revenues."
And that "the political class’s acquisition of banks, especially the currency auction, will lead to disastrous results that lead to the exit of most of the foreign currency from Iraq to the outside, either through politicians to deposit it in foreign banks or through trade exchange, as Iraq depends 95 percent on foreign goods." .
For his part, the economic and banker, Samir al-Nusiri, confirmed that hard currency in Iraq is still subject to leakage outside the country without return due to unplanned and uncontrolled imports of goods and consumer goods and unnecessary and of poor origin and outside the Iraqi standard specifications, revealing a set of proposals that would preserve The hard currency that Iraq needs in the current crisis it is going through.
Al-Nasiri said, in statements monitored by "Yass Iraq", that "imports in every country are traded in hard currency, while in Iraq since 2003 and until now, local production has not been supported, which is the basis for determining imports," noting that "import is complementary to local production." It is not a substitute for it, but after the opening of the borders and markets and the arrival of poor consumer products at low prices compared to the local product due to the insecurity of raw materials and government support, which led to the exit of hard currency through imports of the private sector mainly.
Al-Nusiri added, "The best solution to preserving hard currency is for the government to support local production and activate the laws on protecting the local product and protecting the consumer, which are laws that have been on the shelves for years and have not been activated," stressing, "the importance of providing raw materials and electricity to the factories and structuring government factories. And the participation of the private sector in its management.
He continued that "Iraq without local products comparable to the importer cannot maintain its hard currency as required," noting "the need for the government to address the structural imbalance in the economy, activate the productive sectors and address the deficit in non-oil revenues and the deficit in the balance of payments and the trade balance."
Al-Nusairi concluded his speech by saying: "We are a country. We do not have a clear economic approach, and the private sector has not been involved in making economic decisions, which requires and must meet with support from the government."
For his part, a responsible judge in the Supreme Judicial Council revealed earlier that there were major legal violations and smuggling of foreign currency abroad.
A report published by Al-Qada newspaper stated that the Judicial Council directed the investigation courts to take legal measures against all those who caused damage to the national economy from foreign currency dealers and merchants monopolizing goods and commodities.
The competent judge stated, according to the report, that "the investigation that reached advanced stages revealed illegal operations, fraud and fraud to participate in the auction of selling the currency and smuggling foreign currency outside the country."
The Rusafa investigation court, which is competent to look into issues of integrity, money laundering and economic crime, decided to take legal measures against thirteen banks for violations of entering the currency auction without submitting customs permits that support the entry of goods, tax accounting, and suspicions of falsifying documents related to this.
Earlier, the Integrity Commission revealed the results of its investigation of the stages of selling the dollar at an auction window for selling the currency, while it called for the enactment of a law prohibiting the exit of funds except with special official approvals to ensure control over them and prevent their laundering.
In a statement, the Federal Integrity Commission called for the "acceleration of the establishment of an integrated database (automation) at the General Customs Authority, and linking it to all departments that have a relationship with the import process and the entry of goods, which would prevent manipulation, forgery and waste of public money."
The authority indicated that “a working team from the prevention department at the authority recommended, in a report prepared on the visits that it had made to (the Central Bank of Iraq and both the General Authority for Taxes and Customs and the Border Ports Authority, in addition to the two departments of foreign economic relations and the companies registrar in the Ministry of Trade) ; To shed light on the stages of selling the dollar and the verified economic and financial impact.
The report of the commission recommended, “the necessity of re-introducing the letter of the Prime Minister’s Office on 3/24/2015 which includes deducting private insurance in customs fees at a rate of (5%) and deducting private insurance with income tax at a rate of (3%), provided that it is settled later by the two public authorities. Of taxes and customs, in addition to working to enact a law that prevents money out of the country except with special official approvals; To ensure control and prevent washing.
Mastercard Inc said on Wednesday it was planning to offer support for some cryptocurrencies on its network this year, joining a string of big-ticket firms that have pledged similar support.
The credit-card giant's announcement comes days after Elon Musk's Tesla Inc revealed it had purchased $1.5 billion of bitcoin and would soon accept it as a form of payment.
Asset manager BlackRock Inc and payments companies Square and PayPal have also recently backed cryptocurrencies.
Mastercard already offers customers cards that allow people to transact using their cryptocurrencies, although without going through its network.
"Doing this work will create a lot more possibilities for shoppers and merchants, allowing them to transact in an entirely new form of payment. This change may open merchants up to new customers who are already flocking to digital assets," Mastercard said. (https://mstr.cd/3tLaPZM)
Mastercard specified that not all cryptocurrencies will be supported on its network, adding that many of the hundreds of digital assets in circulation still need to tighten their compliance measures.
Many cryptocurrencies have struggled to win the trust of mainstream investors and the general public due to their speculative nature and potential for money laundering.
CBI Update: Just a note:
No comments:
Post a Comment