Catch Up NOV 17 21 The Central Bank of Iraq: The change in the price of the dollar has nothing to do with the financial crisis
These are the articles I discussed on the My FX Buddies Podcast:
A meeting between Al-Abadi and Al-Amiri with the Chief of the Supreme Judiciary
link this can't be good hahaha what changes will come from this meeting hmmmm
The head of the Al-Fateh Alliance and former Prime Minister Haider al-Abadi met with the head of the Supreme Judicial Council, Faiq Zeidan.
A statement issued by Al-Abadi's office, received by "NAS" (November 15, 2021), stated that "Dr. Haider Al-Abadi, and the head of the Al-Fateh Alliance, Mr. Hadi Al-Amiri, visited today, Monday, the President of the Supreme Judicial Council, Judge Dr. Faiq Zaidan."
He added, "During the meeting, they discussed the situation in the country, the repercussions of the election results, the legal problems regarding them, the appeals submitted, and taking constitutional means to address them, and the importance of the differences not affecting our people.
IHEC to finish looking into election appeals next Thursday
The Independent High Electoral Commission in Iraq revealed today the date for looking into all election appeals.
Member of the media team in the commission, Imad Jamil, told Shafaq News Agency, “Next Thursday is supposed to be the last date for the judicial authority to announce the results.”
Jamil indicated that the commission can accomplish its tasks before the deadline, noting that the last date for resolving the appeals will be next Thursday.
Cougar: There Is No Budget Before June, And It Will Be A Copy Of 2021
The former member of the Parliamentary Finance Committee, Jamal Cougar, confirmed, on Monday, that it is not possible to approve the budget before next June, indicating that the budget will be reproduced for the current year.
Cougar said in a statement to Al-Maalouma, "The budget bill has not been submitted by the current government so far, and it is in the process of completing the project, and it will be transferred to the new parliament."
He added that "the budget for the next year does not differ much, except for some minor paragraphs, which are reproduced from the previous one. What is wrong with those budgets is the reliance on operational issues and leaving investment and revenues."
Cougar explained, "It is not possible to spend hundreds of billions annually in salaries and others without recovering that money from annual profits through the ministries, and the next government should pay attention to this matter and invest the surplus funds from the rise in global oil prices in industrial and commercial projects that generate income."
The Saudi Export-Import Bank signs agreements with 3 commercial banks worth 118 million dollars
The Saudi Export-Import Bank signed agreements with 3 commercial banks with a total value of $118 million, on the sidelines of the launch of the ninth annual Saudi Trade Finance Summit
The bank, according to what was reported by the Saudi Press Agency “SPA”, today, Monday, signed an insurance policy to enhance documentary credits with the Saudi British Bank “SABB” amounting to 238 million Saudi riyals; That is the equivalent of $63.5 million
The document allows SABB to raise its capabilities to accept and further enhance documentary credits in favor of Saudi exports, and to expand its dealings with foreign banks that issue documentary credits; As the insurance coverage contributes to increasing the opportunities for Saudi products to enter new markets and expand into existing markets
The Saudi Export-Import Bank also signed credit line agreements with the Jordan Money Bank and the National Bank of Iraq with a total value of 55 million dollars to support importers of Saudi goods, services and products in the Jordanian and Iraqi markets
The two agreements gain their importance from the promising opportunities for Saudi exports to the two brotherly countries and the good reputation of Saudi non-oil products that are characterized by high quality and competitiveness in vital sectors that enrich the region's markets and contribute to supporting trade relations between the Kingdom and the two brotherly countries
These agreements come within joint efforts to achieve industrial and financial sustainability, business development, attract investment, provide jobs, and operate logistics facilities, companies, banks, and other parties involved in export operations. This is in light of positive indicators in the second quarter of this year that indicated an increase in the contribution of the non-oil sector to the GDP by 8.4% compared to the second quarter of 2020
Today, Monday, the ninth annual Saudi Trade Finance Summit kicked off. With the active participation of the Saudi Export-Import Bank, the platinum sponsor of the summit; Under the title "Flexibility in trade, supply chains and treasury management .
The two-day summit, from 15-16 November 2021, brought together experts and leaders of leading financial institutions; To discuss stimulating plans to increase the effectiveness of the economic system, and the changing trends in the trade finance sector; In order to chart the features of the future of the Saudi economy; This is within the framework of joint efforts to develop financial strategies and build effective systems to advance the commercial finance sector
A financial official determines the possibility of changing the dollar exchange rate in next year's budget
The (former) Director of the Financial Supervision Bureau, Salah Nuri, has determined, on Tuesday, the possibility of restoring and considering the previous dollar exchange rate.
Nuri said in an interview with "Mawazine News" that "according to our information, the general budget for the next year is not much different from the budgets of previous years, in terms of financial allocations and disbursement, as they will be followed by the same mechanism, and that the method of preparing it and the financial and spending ceiling is similar."
He added, "There is a possibility to reconsider the dollar exchange rate gradually, and that the return will not be in the same way it was changed," noting that "the exchange rate remains on its status in the 2022 budget."
He pointed out, "The rise in the exchange rates of the dollar greatly affected the living situation of citizens, and that the benefit was obtained only for the Ministry of Finance by increasing its financial liquidity and disbursing salaries without the need to borrow."
He pointed out that "the currently approved exchange rate reduced the ability of the Iraqi citizen (the employee) to purchase by 48%, while the fragile classes were the most affected."
Chevron’s Latest Oil Deal With Iraq Is One To Watch
link red letters is the best part
The newly resuscitated Iraq National Oil Company (INOC) has been authorised by the government in Baghdad to directly negotiate with U.S. oil giant, Chevron, for it to develop the long-delayed Nasiriyah oil field in the southern DhiQar province, according to several domestic news sources.
The idea of developing the 4.36 billion-barrel Nasiriyah oilfield has been mooted by a rapid succession of governments in Iraq since it was discovered by INOC in 1975. The original plan to develop the field on a standalone basis was shelved in the lead-up to the Iran-Iraq war that began in 1980 and lasted until 1988. The field eventually came on-stream in 2009 and was listed on the 2009-2010 fast-track development plan, which aimed to raise its output to at least 50,000 bpd in the first phase.
In the first half of 2009, Chevron was one of four international oil companies (IOCs), along with Italy’s ENI, Japan’s Nippon Oil, and Spain’s Repsol, to be invited to submit bids to develop the field on an engineering procurement construction (EPC) contract basis. The Japanese consortium led by Nippon Oil, and comprising Inpex, and JGC Corporation, then looked set to win the contract before negotiations broke down again.
In 2014, a serious push was made to resuscitate the development of the Nasiriyah field within the broader scope of the ‘Nasiriyah Integrated Project’ (NIP) that also included the development of adjunct lesser oil sites to the main Nassiriyah site and the construction of a 300,000 barrels per day (bpd) refinery. Bids for this wider project were encouraged by the government-ordered changes to the original Iraq technical service contract (TSC) that were aimed at addressing the concern of many IOCs that saw the contract model as falling short of the production sharing contracts model that they preferred.
Unlike the previous contracts, the new TSC variant offered investors a share in project revenues, but only when production began, and the Oil Ministry would pay recovery costs from the date of commencement of work. This differed from the previous contract where the costs were only paid when the contractor raised production by 10 per cent. This said, investors would still have to pay 35 per cent taxes on the profit they made from the Nassiriya project, the same amount as in previous deals.
At that point in 2014, the international engineering and construction firm Foster Wheeler had already completed a front end engineering and design study for the refinery, and 12 potential bidders were on the list. These comprised: India’s Reliance Industries, Oil and Natural Gas Corp, and Essar Oil, Russia’s Rosneft, Lukoil, and Zarubezhneft, France’s Total, and Maurel & Prom, China’s CNPC, the U.S.’s Brown Energy, a Japanese joint bidding team from JGC and Tonen General, and South Korea’s GS Engineering & Construction.
Given longstanding IOC concerns about legal, accounting, and financial transparency in Iraq, this 2014 initiative to develop the Nassiriyah oil field foundered. As summarised by the independent international non-governmental organisation, Transparency International (TI), in its ‘Corruption Perceptions Index’, Iraq demonstrates: “Massive embezzlement, procurement scams, money laundering, oil smuggling and widespread bureaucratic bribery that have led the country to the bottom of international corruption rankings, fuelled political violence and hampered effective state building and service delivery.”
In 2017, China relaxed its directive of the previous two years to all state-owned hydrocarbons companies to cut budgets. From the Iraqi side, this coincided with a fresh impetus for expediting as much production from the south of the country ahead of the chaos in oil supplies from the north that was likely to result (and did) from Kurdistan’s independence referendum to be held in September.
These factors then led to China’s Sinopec and PetroChina proposing a deal that would see the NIP being rolled out as part of the broader ‘Integrated South Project’ (ISP). The ISP (later rebranded as the ‘South Iraq Integrated Project’) aimed to boost output across Iraq’s southern oilfields, and also to build out related infrastructure, including pipelines, transport routes, and the construction of the Common Seawater Supply Project (CSSP).
“The Chinese said that they would spend US$9 billion on the [NIP-related] refinery and the first phase of developing Nassiryah but as, under the terms of Iraqi oil contracts, the Iraqis would have to pay back this cost to the Chinese from the value of oil recovered,” a source who works closely with Iraq’s Oil Ministry told OilPrice.com. “The initial reaction from the Oil Ministry was to decline the offer, and to say that the development should only cost around US$4 billion, which the Chinese in turn flatly turned down.”
The Chinese had other demands that grated on Iraq at that time as well. “China also wanted its firms to receive their costs back in a much shorter timeframe than most other similar projects,” said the source. “This meant that they were effectively asking for a per barrel remuneration fee at a 15 per cent premium to the highest maximum fee being paid to any company in Iraq for a regular crude oil producing field, which was US$6 per barrel to PetroChina for al-Ahdab,” he added. “This would mean that the Chinese would get around US$6.90 per barrel, more than [Angola’s] Sonangol for its heavy oil extraction at Najmah [US$6 per barrel] and Qairayah [US$5 per barrel] and would dwarf the US$1.49 per barrel that [Malaysia’s] Petronas was getting for the same type of field of Gharraf,” he told OilPrice.com. “China also demanded that it was given [Iraq] dinar-denominated government-backed bonds for the entire amount [US$9 billion] that could be cashed in if the development did not start to generate large amounts of oil quickly,” he underlined.
Given the negative history of dealing with China over the Nassiriyah project and the fact that Russia is occupied elsewhere in the country and the region, the U.S. might be in an unusually positive position to take a significant role in either the Nassiryah field development alone or in the broader NIP. This has been bolstered by the apparent willingness of Iraq’s de facto leader - radical Shiite cleric Moqtada al-Sadr – to engage with U.S. ally, Saudi Arabia, and by the shift in tone from one key player in Iraq’s influential al-Hakim family.
Whether this shift in attitude towards doing substantial and enduring business with the U.S. across its oil, gas, and petrochemicals sectors is genuine, or whether it is just the usual games-playing by Baghdad to keep the money flowing from Washington, remains to be seen but the slew of deals signaled recently appear propitious at this stage.
The Central Bank of Iraq: The change in the price of the dollar has nothing to do with the financial crisis, and the rise in oil prices will not fill the budget deficit
The Central Bank of Iraq resolved the controversy over the return of the dollar exchange rate to its previous position simultaneously.
The Deputy Governor of the Bank, Ihsan Shamran Al-Yasiri, stated, in a statement to the National Iraqi News Agency ( NINA ), that “the change in the dollar exchange rate has been studied by several specialized technical, financial and executive bodies,” noting that “the exchange rate was modified only based on extensive studies between the Ministry of Finance, the executive authority and the monetary authority, which is the central bank, in agreement with important international institutions to clarify the fair price of the dollar.”
He added, "We reached this price of 1450 dinars against the dollar, to which the central bank commission and the bank's commission are added to the public, which means that the price of the financial policy is 1450 dinars against the dollar, the price of the central bank is 1460 and the price of banks is 1470 dinars to the public."
On the repercussions of changing the exchange rate on the financial crisis, the Deputy Governor of the Central Bank stressed that “the financial crisis has nothing to do with changing the exchange rate, and that solving it does not mean a return to reducing the exchange rate of the dollar against the dinar, because the exchange rate is a monetary financial instrument that has nothing to do with the immediate problem.” Noting that "there has been a delay since 2010 that was supposed to amend the dollar exchange rate, and now it has been modified, as we hope for the return of the activity of economic institutions in light of the current exchange rate."
And regarding the rise in international oil prices and the surplus from the general budget, Al-Yasiri explained that “the surplus from the improvement in international oil prices will help reduce the budget deficit, but I do not think that the rise in oil prices by the end of this year can reach to bridge the deficit,” noting that “part of the The public budget deficit can be financed."
Al-Yasiri pointed out, “There were proposals to use oil price differences in financing projects, governorates, and others, but the opinion of the government, the previous parliament, and the Ministry of Finance was to fill the deficit first rather than expand spending.”
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