Wednesday, October 6, 2021

WOTS TUE OCT 5 21 Banking reform and fiscal stimulus

 WOTS TUE OCT 5 21 

Banking reform and fiscal stimulus

No My FX Podcast Buddies Today

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Baghdad - the price on the stock exchange    

148,200  

....  

The price is in most Baghdad exchanges   

Purchase  

147,500  

Sale  

148,500  

——————————— 

Erbil - Bursa  

148,250  

——————————— 

Mosul - Bursa  

148,300  

——————————— 

Basra - Bursa  

148,250


The Markets:


Precious Metals:

Brent 81 WTI  77   Bitcoin: 50,138  10 yr yield: 1.50

Favorite Currencies Forex Quotes

SymbolBidAskHighLowOpenChangeTime
 USD/IQD  1435.3000  1487.0000 1458.1000 1458.0000 1458.1000  0.3000 13:14
 USD/VND  22754.0000  22756.0000 22743.6600 22738.0400 22738.0400  7.0800 04:31
 USD/CNY  6.4452  6.4482 6.4462 6.4459 6.4462  -0.0004 00:21
 USD/KWD  0.3010  0.3020 0.3012 0.3011 0.3012  -0.0001 04:52
 GBP/USD  1.3620  1.3621 1.3627 1.3584 1.3601  0.0019 05:30
 USD/IRR  42000.0000  42210.0000 42097.5000 42097.5000 42097.5000  0.0000 00:00
 USD/IDR  14227.0000  14227.0000 14282.0000 14220.0000 14270.0000  -43.0000 05:30

Things in the News:


Iraqi Articles:

Banking reform and fiscal stimulus

link


Several months ago, the government issued the white paper, which is the roadmap for the desired macroeconomic reform for the coming years. The white paper, on pages 56 and 57, identified the main objectives of banking sector reform in the medium and long term, between 3-5 years. In fact, it is an accurate diagnosis of the problems that have already been diagnosed by the Central Bank and the World Bank.

It has already developed urgent and strategic solutions and mechanisms for it as is evident in the Central Bank’s strategy (2016-2020) and strategic banking projects for the years (2019-2023). 
The paper focused on the basic objectives of private banking reform. 
In turn, we identify proposals for a number of urgent measures and solutions for banking reform 
Come: 

First - take decisions on financial policy to restore balance between government banks and private banks in terms of capital, activity and tasks, and focus on starting to restructure the Rafidain and Rasheed Banks, according to what was stated in agreement with the World Bank since
several years.

Second, through an analytical view of the reality of the Iraqi economy and the challenges facing the fiscal and monetary policies, in particular stimulating and revitalizing the economy with bank financing requires clarity of financial policies and coordination with monetary policy in stimulating 
Economy.  

Third - Take immediate measures to redistribute the banking density of private banks in proportion to the actual need of the Iraqi economy and towards stopping the granting of new licenses to establish new banks and start rehabilitating troubled banks, and studying the economic feasibility of continuing to work or merging them in accordance with the merger guide issued by the Central Bank in
2019.

Fourth - that the nature of the activities of banks depends on the nature of the activities of other economic sectors, and as long as the economic activity is concentrated in trade (imports), the activity of banks remains focused on external transfer, and this means that the problem of the currency window is not in the supply of the dollar from the central bank, but rather the reason is the demand for the dollar .. Therefore, unless other sectors (industry, agriculture, tourism and others) move, we cannot expect diversification of banking activity.

Fifthly, it is necessary to provide a legal environment and extend the rule of law in order to eliminate the phenomenon of default in the payment of loans, as the non-performing debts amounted to (5 trillion dinars), 70% of which are the debts of government banks and 30% of the debts of private banks, which constitute a large percentage of the total monetary credit 
granted.

Sixth – Activating the implementation of the decisions of the Council of Ministers and the Economic Affairs Committee in the Council of Ministers, which were previously directed to support the banking sector, in particular private banks by opening accounts for ministries and government departments, accepting certified instruments and opening documentary credits to the government in the amount of 50 million dollars without going through the Ministry of Finance and the Iraqi Trade Bank and decisions Others pertain to borrowing for investment projects, collecting taxes and customs duties, and settling salaries.
Seventh- Considering the cases of bad debts owed by customers in private banks are urgent cases and excellent debts, similar to the debts 
governmental.

Eighth – Working to provide conditions and take measures to help private banks obtain the internationally approved credit rating, and then strengthen international banking relations with correspondent banks.

Finance reveals the repercussions of raising the exchange rate on the Iraqi economy

link

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The Ministry of Finance revealed, on Tuesday, the positive effects of raising the exchange rate on the Iraqi economy.

The ministry said in a statement received by "Al-Iqtisad News", that it has continuously followed up the indicators of devaluation of the currency against the dollar and over the past nine months. If it was $54 billion in December 2020, this came after implementing reform measures.

"The change in the exchange rate also helped reduce the demand for foreign currency, which was positively reflected in the decrease in imports and the increase in domestic production," she added.

The indicators confirm, according to the statement, the improvement of “commercial activity in the past nine months of the current year 2021” in light of the spread of the Corona virus, as well as “stopping the penetration of the Iraqi market and dumping it with cheap goods that curb attempts to upgrade local production.”

The ministry indicated that it is working "to reinvest the revenues of the generated funds with the aim of building a targeted production base outside the oil sector and relying on other sectors, which will contribute to a decrease in demand for the dollar as a result of compensating some of the goods produced, which made the proportion of imports to local consumption decline."

He pointed out that it has adopted, "since the formation of the current government, the development of plans and mechanisms to work on reforming Iraq's fiscal policy, and culminated in the adoption of the reform paper (the White Paper), which outlined future economic and financial policy steps to advance local production and reduce imports for the country. This measure also contributed to improving the state of 


CBI Update:  Just  a note:

They have been having auctions and the ISX has been trading regularly; the sites just don't update in time to put the information in this report, unless it is 
here.   

Click on the link above for the latest update.

The CBI for rate is 1460

The currency auction For October 5th, 2021 total sales amount $208,818,800. 


ISX Update:   

www.isx-iq.net/

Shares Traded: not updated for today
Value Traded: not updated for today 

10-4-2021   Newshound Guru MilitiaMan  Article:  "Iraqi banks acquire 99% of government bonds"  From the looks of these Bonds at 250 billion dinars has a striking similarity to the UST requirement for banks to have quality assets. Imagine if this is similar and timed accordingly.  If an international calculation is applied to a new exchange rate like that of the AMFs recent valuations of approximately 3xSDR... One would see just how striking that maybe...IMO. There are no coincidences imo.

10-4-2021   Intel Guru MarkZ  [via PDK]    [Will the dong revalue when the dinar revalues?]  yes…we expect them to go at the same time.

10-4-2021   Newshound Guru MilitiaMan   Article:  "Adviser to the Prime Minister clarifies the bonds of {construction} and their objectives"  There is loads of talk about monetary policy lately.  There is a focus on Bonds to jump start the private sector. The theme is to create opportunity to reduce the money supply on the street by using bonds...as an instrument or incentive to entice citizens and investor money into the bonds which reduce the money supply. Reducing the money supply creates value by a supply and demand basis. The opposite is true too, when increasing the money supply reduces value, as noted in the last devaluation.

10-4-2021   Intel Guru MarkZ  [via PDK]   I have been unable to get any news out of Iraq for the last couple of days. I’m hoping this is a good sign…i have not been able to get any messages from contacts there in about 3 days. They may have changed [rates] and we just not know it yet... They did it that way in Kuwait…they blacked out the information for about 10 days...

10-4-2021   Intel Guru Frank26  Article: "New Instructions for buying and selling foreign currency for the year 2021 and the stability of the dinar exchange rate"   Possibly new instructions for a new currency and new exchange rate!!!

10-4-2021   Newshound/Intel Guru Petra  No proof of next year at all. K [PM Kazemi] has invested too much and CBI has the landing strip paved. Lol...

10-4-2021   Newshound Guru Pimpy  Question:  "If the dinar rate is a false program rate why are they devaluing it at all?  If the true value is $3+ why would a small devaluation matter?"  I'm not sure where the story of this being a false rate came from...My guess is it stems from the currency being devalued once the U.S. attacked Iraq.  It was greatly devalued from one of the richest countries in the world and so it makes sense that the IQD will increase in value.  This is my opinion and my opinion only.  Now whether all that is done at one time through an RI or an RV or done in increments is another story... 


Catnip's Corner:
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ARTICLE 1-A (from PM Kadhimi's  website; posted only on Arabic side, not on English side)

The most important statement of the Prime Minister, Mustafa Al-Kazemi, during his inauguration of the Dhi Qar Governorate Reconstruction Fund Projects Conference 

🔵 Our determination to redevelop Dhi Qar Governorate by forming the Provincial Reconstruction Council, to supervise the implementation of projects worth one thousand three hundred billion dinars allocated to the governorate, and we have given the electricity file the utmost importance.

🔵 There are projects to expand 20 cities belonging to the governorate as part of a plan to break the population bottleneck in the governorate's cities.

🔵 We pledged to move towards the future in a manner befitting Iraq from north to south, and we did not care about the short life of this government, and our only concern is preparing for a future government that will complete what we have achieved.

🔵 In Dhi Qar, crafts began, which is the cradle of civilizations, and our governorates cannot remain in suffering, especially the dear sons of Dhi Qar to our hearts.

🔵 On the first visit to Dhi Qar, we held an emergency session of the Council of Ministers, from which a committee was formed to follow up on projects work, and directed government agencies to double the effort, raise the pace of work, and complete the stalled projects within a short period.

🔵 The committee succeeded in opening the Victory Bridge, which has been suspended for 9 years, and resurfacing the so-called (Death Road) in less than a month.

🔵 The government committee has reached 96% of the projects, and the trial launch of the Al-Islah-Jbayish water project, which will provide liquefied water to about 230 thousand people.

🔵 We have issued several decisions regarding the fight against corruption and lagging and illusory companies, and we have withdrawn investment licenses for all companies whose completion rate does not exceed 35% of the work; This helped the completion of 28 school buildings, and preparations for the delivery of 33 other school buildings throughout the governorate.

🔵 We were able to open the Turkish hospital, which has been suspended for 10 years, and the Dhi Qar concrete bridge, which has been suspended for two years.

🔵 We laid the foundation stone for the Nasiriyah airport development project, which will make the governorate a station and a destination for historical religious tourism, and His Holiness the Pope of the Vatican blessed it during his visit to Ur’s Ziggurat and the shrine of the Prophet Ibrahim (peace be upon him).

The governorate witnessed the opening of the Nasiriyah complex power station, as well as the opening of the industrial city, which has hundreds of factories, according to what is allocated by the governorate reconstruction fund.

🔵 We instructed that the Secretary-General of the Council of Ministers supervise the instructions related to the fund, prepare the schedule for vital projects that have direct contact with the lives of citizens in the governorate, and supervise, follow up and finance.

🔵 Work has already begun with the direct referral of more than 100 projects within the sectors of electricity, health, infrastructure, roads and bridges, youth and sports.

🔵 Dhi Qar Governorate is on the verge of a major reconstruction campaign; For one goal, which is to serve the citizens of Dhi Qar and meet their true demands, and I say that reconstruction will not stop until Dhi Qar is in the position it deserves and befitting its history.

Media Office of the Prime Minister
4 - October - 2021

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ARTICLE 1-B (from PM Kadhimi's  website; posted only on Arabic side, not on English side)

Prime Minister Mustafa Al-Kazemi briefed on the application of the latest electoral simulation ahead of the elections 

Today, Monday, the Prime Minister, Mustafa Al-Kazemi, was briefed on the application of the fifth simulation, which was implemented prior to the holding of the elections on the tenth of October, and this came during his visit to the Independent High Electoral Commission.

Mr. Al-Kazemi indicated that the successful implementation of the fifth simulation today, indicates the full preparations and preparations for holding fair and transparent elections, which express the aspirations of the Iraqis for the future.

The Prime Minister affirmed that the government fulfilled its pledges it made to the Iraqi people, and provided all measures that would facilitate the work of the Electoral Commission and enhance the democratic experience. His Excellency indicated that the October 10 elections are a historic opportunity for change and course correction.

Mr. Al-Kazemi stressed dealing firmly with any attempt of fraud, and not allowing it, and also stressed the continuous follow-up to abuses and violations by candidates and parties, as they will be dealt with legally by the Commission.

Media Office of the Prime Minister
4 - October - 2021

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ARTICLE 2 (from Government of Iraq twitter account)

The total percentage of the electoral sector's achievements as stated in the annual report of government performance on what the Iraqi government accomplished during the period (May 2020 - May 2021). Click here to view the full report https://bit.ly/3cqpEdt

The Annual Government Performance Report issued by the @IraqiGovt on the implementation of the government program included accurate details of what has been accomplished in all sectors. The table below shows what has been accomplished in the electoral sector.

PM @MAKadhimi overseas the last election simulation prior to the elections affirming that the successful simulation proves that Iraq is prepared and ready to hold transparent and clear elections that reflects Iraqi aspirations.

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ARTICLE 3

Al-Kazemi's advisor proposes solutions to support the private sector and reduce the value of the dollar
10/04/2021 - 9:13 PM 

Today, Monday, the financial advisor to the Prime Minister, Mazhar Muhammad Salih, determined the extent of the possibility of relieving pressure on the operating budget and addressing the financial situation in the country, while proposing solutions to support the private sector, reduce unemployment and reduce the value of the dollar against the dinar.

The financial advisor to the Prime Minister, Mazhar Muhammad Salih, said, "It is possible to benefit from the recovery in oil prices by moving the stalled projects, attracting manpower, and solving the problem of unemployment, which averages 450 thousand work force willing to work, and this results in the entire society."

He pointed out, “The importance of spending additional rentier resources on projects to relieve pressure on the operating budget,” noting that “the operational budget includes dozens of decisions and laws and bears financial burdens, and needs to double the 2021 budget to implement all its requirements.”

Saleh explained, "There is poor planning, as well as the accumulation of unemployment, and treatment cannot take place unless the state sets laws for the private sector, such as the Social Security Law, which grants privileges to its workers, including ensuring his retirement rights or transferring an employee from the private sector to the government and others."

He added, "The additional oil resources cannot be benefited from without directives to manage them," noting that "the private sector has the ability and leadership, and money must be disbursed to it within a specific plan and be in the form of soft, recoverable loans to preserve wealth, as for the disbursement of amounts as consumption. It is just a huge loss for the future.”

And he continued, "The government today is shackled by thousands of decisions and laws that carry consumer spending burdens par excellence, and cannot be applied even if the price of a barrel of oil reaches $ 160," referring the reasons to "the adoption of legislation without studying the financial burdens and thus costing the state to carry out a review of those legislation, and therefore Today, the Ministry of Finance is unable to implement dozens of legislations because of the financial burdens.”

And he indicated, "The transfer of problems from one cycle to another has caused a major imbalance, and long-term plans that are governed by laws must be developed and adhered to in order to rebuild the country properly," noting that "Iraq in recent years has followed a policy of deportation and it must be replaced by a policy of communication, meaning that the government is changing With the continued implementation of the drawn up plan, an example of this is the electricity sector, which has spent about 120 billion dollars and so far the country is unable to produce 20 thousand megawatts per day.”

And on the extent of the possibility of reducing the value of the dollar against the dinar, the financial advisor said, “The monetary policy depends on the amount of foreign reserves supporting the Iraqi dinar, that is, the efficiency of the reserves and their escalation towards safe lines.”

He added, "There are expectations that the Iraqi dinar will improve with the development of reserves, and this matter is left to the monetary policy, especially since the timing is appropriate and the opportunity is appropriate, provided that there is financial discipline and correct development, and without them there is no value for any attempts."

He pointed out that "the 2022 budget will be subjected to great pressures, especially since the 2021 budget is built on a deficit," stressing that "the improvement in oil prices will reduce the deficit in the 2022 budget, but there is an expansion if it is achieved, the spending ceiling will be fixed, meaning that the increase in revenues with Increasing operational spending does not achieve anything.”

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ARTICLE 4

Iraqi elections are necessary to establish rights
20:04 Monday 04 October 2021

Iraqi President Barham Salih called on the components and spectra of Iraqi society to participate widely in the early parliamentary general elections because it is a necessity for an effective and effective presence in the next parliament to establish the rights of the components. 

During his meeting with representatives of the components and spectra in various Iraqi cities and regions, he said, "Iraq is facing a great entitlement in a few days that will be embodied in the elections, which will be a turning point in the country and chart its future, and a real starting point towards reforming the current situation that guarantees good governance, recognizes rights and duties and imposes the rule of law." and the country,” according to a statement by the Iraqi presidency.

He added that "wide participation is necessary to prevent stalkers and those trying to manipulate Iraqis' votes, and that the electoral process will be subject to exceptional technical measures to prevent fraud and ensure the voice of Iraqis."

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ARTICLE 5

Art stars celebrate the Iraqi National Day
October 4, 2021 19:50 pm
 
A large number of art stars celebrated the Iraqi National Day, which fell on October 3, and published through their accounts on social networking sites the image of the Iraqi flag, and they hoped that Iraq would overcome its crises and return to its previous time. Every year and my country is good, every year and Iraq is progressing towards glory, may God have mercy on our martyrs, and heal our wounds.”
Director Yasser Al-Yasiri commented on Facebook: "It is as if the pride of the whole land.. belongs to it, and there is nothing in it except my father.. It is Iraq. ».

A number of Iraqi stars and singers were satisfied with spreading the Iraqi flag, including Muhammad Al-Salem, Saif Nabil, and Alaa Shaker, while a number of Arab artists congratulated the Iraqi people on the National Day, including Nisreen Tafesh, Jumana Murad, Vivian Murad and many others.
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