Sunday Special: A government comment on changing the dollar exchange rate after the rise in the oil price

Sunday Special: A government comment on changing the dollar exchange rate after the rise in the oil price

These are the articles I discussed on the My FX Buddies Podcast: 

Clear optimism about an economic recovery after the formation of the new government

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There is a clear state of optimism among economists and observers in Iraq regarding a significant recovery of the Iraqi economy, thanks to the indicators that herald a new economic start.

After the year 2021 full of developments, which was marked by the start of economic recovery following the crisis of the Corona pandemic, many parties seem optimistic, with expectations of higher growth at the beginning of next year as a result of high oil prices and the increase in the percentage of tourist delegations heading to Iraq.

Expectations indicate an improvement in the growth rate by the end of the current year, reflecting the growth of the added value after providing water for the grain crop, and the increase in the number of workers in this sector.

Some economic observers, whom Al-Sabah met, confirmed that the improvement in the growth rate is also a result of the tangible progress made at the level of the vaccination campaign against the Corona virus, and the fiscal stimulus policy followed, in addition to the trend to facilitate loans in the real estate market. In turn, the International Monetary Fund expects to record an enhanced recovery of the Iraqi economy thanks to the rise in oil prices, the good performance of the agricultural season and the results of the policies that have been implemented to confront the repercussions of the pandemic.

According to the latest report of the International Monetary Fund on "Regional Economic Prospects", Iraq's performance was average at the level of the vaccination campaign and investment in the future to get out of the crisis more robust, as the region faces chronic structural issues that have become a focus recently with the onset of the pandemic. 

The economist, Ali Abu Khamisi, had confirmed in a statement to “Al-Sabah” that the assumptions on which the International Monetary Fund was based, if a new budget law was prepared close to these directives, would be realistic and ambitious expectations, and take into account future developments at the local and international levels. Adding, there is no doubt that the cloud of the Covid-19 crisis has begun to clear, as indicated by the improvement in the epidemiological situation and the remarkable progress that has been made at the level of the national vaccination campaign, indicating that this depends on imposing the stability of the security situation and settling the pre-political blockage. A situation that motivates investment companies and workers in all sectors to resume their activities to contribute to raising the economic level, which also depends on the performance of the new government, which will have to move forward with the implementation of various major projects.

The government's financial advisor: Adjusting the price of the dinar against the dollar needs several requirements that the government must take

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The government's financial advisor, Mazhar Muhammad Salih, confirmed that adjusting the dinar exchange rate in light of the improvement in oil revenues needs several requirements that the government must take.

Muhammad Salih said in a statement to the National Iraqi News Agency ( NINA ) that adjusting the exchange rate requires the foreign currency to cover the local liquidity, indicating that the superiority of foreign reserves over the cash reserve should not threaten the wealth of the country’s foreign reserves.

” He added: “Foreign reserves should cover at least A number of import months, including no less than 6 months, especially in the case of Iraq, which is adopted and very open to foreign markets.

An economist stresses the need to form a government and achieve political stability to support the economy

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Economic expert Safwan Qusay stressed the need to form a government to achieve political stability that attracts local, regional and international investments, stressing the need to use economic minds to save Iraq from economic collapse and rebuild its infrastructure.

Qusai said in a statement to the National Iraqi News Agency ( NINA ): "Political stability is one of the most important indicators to support the process of attracting local, regional and international investments, and the speedy crossing of the curve of political disputes to form a government with full powers before the end of the year will support the approval of the federal budget for the fiscal year." Coming at the appropriate time, and this means the initiation of faster steps in the process of comprehensive reform."

He pointed out: "The building of the democratic system in Iraq is of great importance, to consolidate the right of everyone to participate and not be alone in making decisions, and this requires preparing the program of the next government in a transparent manner with specific quantitative and descriptive goals and relying on competencies in transforming slogans into achievements, and then everyone will be the winner." Otherwise, everyone will be the loser."

The economic expert called to "make all efforts to complete the formation of the government of the economy, because Iraq needs creative minds that pull it towards safety and prosperity."

Expert: High oil prices will not benefit Iraq due to the budget deficit

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Oil expert Hamza Al-Jawahiri confirmed on Sunday that Iraq will not benefit from the rise in crude prices this year due to the financial deficit in the federal budget, while reassuring that clean energy will not compete with fossil fuels.

Al-Jawahiri said in an interview with Shafaq News Agency, "The rise in oil prices will reflect positively on Iraq, but it will not benefit from this rise during the current year because it will go to fill the deficit in the 2021 budget."

And he indicated that "it is possible that funds will be available next year for sustainable development, which depends on the budget that will be set and the amount of money that may be available."

Regarding clean energy and its competition with fossil fuels, Al-Jawahiri explained that “clean energy, no matter how developed, will not compete with oil, coal and gas in energy production, and therefore Iraq will remain for decades an oil producer because the costs of clean developmental energy are high, in addition to that its technology has not developed enough to give you low cost energy products.

He stressed that "oil is an important source and cannot be abandoned so easily, as it is a major source of energy production and petrochemicals, and its importance is constantly increasing, and the demand for it is increasing annually by 3 million barrels, and thus Iraq will continue to produce and sell oil at good prices."

Al-Jawahiri concluded by saying that "coal is still competing and playing an important role in energy production, although many spoke in 1910 that it would disappear after the emergence of oil and gas, but we see that it still occupies a position in energy production and comes in second place after oil."

Finance Minister: The Government Is Adopting A Set Of Programs And Plans To Stimulate The Economic Situation

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Today, Sunday, Finance Minister Ali Abdel Amir Allawi Confirmed That The Government Is Adopting A Set Of Programs And Plans To Stimulate The Economic Situation.

The Ministry Said In A Statement Received By Al-Ahed News That "Minister Ali Abdul-Amir Allawi Received Today The South Korean Ambassador To Baghdad, Jang Kyung-Wook, And His Accompanying Delegation," Noting That "During The Meeting, Aspects Of Joint Cooperation Between The Two Countries Were Reviewed, And The Strengthening Of The Aspect Of Cooperation Between The Two Countries Was Emphasized, Partnership In The Economic And Commercial Fields And Opening New Horizons For Partnership Between The Two Friendly Peoples.

He Added, "The Minister Reviewed The Fundamental Reforms Achieved By The Ministry Of Finance And Raising The Indicators Of Commercial Activity In Light Of The Current Economic Challenges And The Corona Pandemic Crisis."

Allawi Stressed, According To The Statement, That "The Iraqi Government Is Adopting A Set Of Programs And Plans That Have An Impact On Stimulating The Economic Situation And Enhancing Development Opportunities."

For His Part, The Korean Ambassador Praised The “Rising Performance Of The Iraqi Economy,” Expressing “The Direction Of His Country’s Government Towards Raising Levels Of Cooperation With Iraq, And The Desire Of Sober Korean Companies To Expand Their Activities And Partnership With Iraq In Various Fields, Especially Those Related To Investment And Infrastructure Aspects.

Bloomberg .. a possible rise in oil prices to $ 100 a barrel

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America, India, Japan and other countries intensified pressure on OPEC members to increase production, amid fears of a possible rise in oil prices to $ 100 a barrel, according to "Bloomberg".

According to the agency, “Officials from the United States, Japan and India spoke to each other separately, and also communicated with major oil consumers and exporting countries. The calls began about three weeks ago, but intensified in recent days after the price rose to $85 a barrel.

The agency stresses that the United States, India, Japan and other countries have been exerting "the strongest diplomatic pressure on OPEC for many years, whether openly or privately."

Observers also write that Japan has taken a rare step for itself and joined these calls. While China remains silent, it shares this view.

Bloomberg added: “The Biden administration is increasingly concerned about high gasoline prices, which have reached their highest levels in seven years. For several weeks, the “OPEC +” group has been urging the production of more oil.

Russian President Vladimir Putin had said in mid-October at the plenary session of the Russian Energy Week, that he believed that it was “very possible” that the price of a barrel of oil would reach $100. At the same time, he made it clear that Russia is doing "everything in its power to fully stabilize the oil market."

According to the agency, during the past year, the concern of oil consuming countries increased with the rise in the price of crude oil, first to 50 dollars per barrel, then to 75 dollars, and now to more than 85 dollars. These countries fear that the price of a barrel of oil will rise to $100.

Katyusha rockets fell in Al-Mansour, west of Baghdad

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On Sunday, a security source reported that Katyusha rockets fell in the Mansour area, west of Baghdad.

The source told (the Iraqi Information Agency / INA) that "three Katyusha rockets fell at dawn today, in the Mansour area in the capital, Baghdad."

He added, "One of the missiles landed in the Syndicates Street near the Red Crescent Hospital, the second on Princesses Street near the external fence of the Economic Bank (the building is abandoned), and the third at the beginning of the entrance to Al-Zaytoun Street inside the Isalat Al-Mansour Water Department station."

The source confirmed, "Its fall led to material damage to a civilian car and the outer fence of the liquefaction department."

The Minister of Finance confirms his meeting with the Korean ambassador, Iraq's keenness to consolidate its relations with various countries of the world

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Minister of Finance, Dr. Ali Abdul-Amir Allawi, affirmed today, Sunday, Iraq's keenness to consolidate its relations with various countries of the world.

A ministry statement said: The minister met with South Korean Ambassador Jang Kyung-wook and his accompanying delegation, in which they reviewed aspects of joint cooperation between the two countries, and emphasized strengthening the partnership aspect in the economic and trade fields and opening new horizons for partnership between the two friendly peoples.

Allawi reviewed the fundamental reforms achieved by the Ministry of Finance and raising the indicators of commercial activity in light of the current economic challenges and the Corona pandemic crisis.

Allawi said that the Iraqi government is adopting a set of programs and plans that have an impact on stimulating the economic situation and enhancing development opportunities.

For his part, the Korean ambassador praised the escalating performance of the Iraqi economy, expressing the country’s government’s tendency to raise levels of cooperation with Iraq, and the desire of sober Korean companies to expand their activities and partnership with Iraq in various fields, especially those related to investment and infrastructure aspects

 

A government comment on changing the dollar exchange rate after the rise in the oil price

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Mazhar Muhammad Salih, the financial and economic advisor to Prime Minister Mustafa Al-Kazemi, commented on Sunday, on the possibility of changing the exchange rate of the dollar against the Iraqi dinar, after the rise in oil prices.

Saleh told Shafaq News Agency, "Adjusting the dinar exchange rate in light of the improvement in oil revenues requires several requirements that the government must take. This requires foreign currency coverage of local liquidity, and the superiority of foreign reserves over cash reserves should not threaten the wealth of foreign reserves." for Iraq."

He added that "foreign reserves should cover at least a number of import months, including at least 6 months, especially in the case of Iraq, which depends heavily on openness to foreign markets. If these factors are available, the issue of changing the exchange rate of the dollar against the Iraqi dinar can be studied."

It is noteworthy that the Iraqi government reduced the value of the Iraqi dinar against the US dollar in the Federal Budget Law for the year 2021, as the exchange rate of the dollar reached 1450 dinars to the dollar, after its price was 1200 dinars to the dollar. Mazhar Muhammad Salih, the financial and economic advisor to Prime Minister Mustafa Al-Kazemi, commented on Sunday, on the possibility of changing the exchange rate of the dollar against the Iraqi dinar, after the rise in oil prices.

Saleh told Shafaq News Agency, "Adjusting the dinar exchange rate in light of the improvement in oil revenues requires several requirements that the government must take. This requires foreign currency coverage of local liquidity, and the superiority of foreign reserves over cash reserves should not threaten the wealth of foreign reserves." for Iraq."

He added that "foreign reserves should cover at least a number of import months, including at least 6 months, especially in the case of Iraq, which depends heavily on openness to foreign markets. If these factors are available, the issue of changing the exchange rate of the dollar against the Iraqi dinar can be studied."

It is noteworthy that the Iraqi government reduced the value of the Iraqi dinar against the US dollar in the Federal Budget Law for the year 2021, as the exchange rate of the dollar reached 1450 dinars to the dollar, after its price was 1200 dinars to the dollar.

The Iraqi Finance Minister confirms his country's keenness to consolidate its relations with various countries of the world

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Today, Sunday, Iraqi Finance Minister Dr. Ali Abdul Amir Allawi affirmed his country's keenness to consolidate its relations with various countries of the world.

 

This came during his meeting with South Korean Ambassador Jang Kyung-wook to discuss bilateral relations.

 

The two sides reviewed - according to what was reported by the National Iraqi News Agency - ways to enhance joint cooperation between the two countries and partnership in the economic and trade fields.

 

For his part, the South Korean ambassador praised the escalating performance of the Iraqi economy, expressing the direction of his country's government towards raising levels of cooperation with Iraq, and the desire of Korean companies to expand their activities and partnership with Iraq in various fields, especially those related to investment and infrastructure aspects.

The coordinating framework informs Al-Sadr of his refusal to renew Al-Kazemi’s rule

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The coordination framework of the Shiite forces informed, on Sunday, the leader of the Sadrist movement, Muqtada al-Sadr, his refusal to renew the second term of the outgoing Prime Minister Mustafa Al-Kazemi.

The source told Shafaq News Agency, "The envoy from the coordination framework sent a message to the negotiating delegation of the Sadrist movement, its content is that the leaders of the Shiite blocs agreed in a previous meeting that the prime minister in the next stage would be consensual and from within the Shiite house and that he would be chosen according to the supreme interest of Iraq." With everyone's consent."

The source added, "There is agreement and consensus within the coordination framework to reject, grant and renew the second term of the outgoing Prime Minister Mustafa Al-Kazemi."

The coordination framework urged, according to the source, the Sadrist movement to "sit down to a dialogue table with the Shiite blocs represented by the coordination framework in order to agree on choosing a suitable person for the prime ministership in the next stage."

On Sunday, the leader of the Sadrist movement, Muqtada al-Sadr, announced his intention to form a national majority government, while indicating that he had no disagreement with other political blocs, except for "the issue of internal and external reform."

The Sadrist bloc, led by Muqtada al-Sadr, had confirmed earlier on Sunday that its political vision had changed from the previous one and would not accept quotas and power-sharing this time.

The Sadrist bloc, headed by al-Sadr, topped the results of the Iraqi legislative elections that took place on October 10, with 73 parliamentary seats, according to the preliminary announcement of the results by the Electoral Commission.

It is noteworthy that well-known political parties have announced their fear of forming a Sadrist government, for fear of al-Sadr's direct intervention in its administration, as well as their fear of arranging a specific order to reopen corruption files and the consequences that follow.

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