Sunday Special Edition November 14, 21 Iraqi Finance: We have adopted the dinar exchange rate to protect foreign reserves and support the budget
These are the articles I discussed on the My FX Buddies Podcast
The Iraqi Stock Exchange participates in the activities of the European Union - Asia
The General Secretariat of the Federation of Eurasian Exchanges organized, on 11-12/11/2021, various events in which the Iraq Stock Exchange participated.
The market participated in the meeting of the Board of Directors of the member stock exchanges, including the Iraq Stock Exchange, which was elected in June 2021. Also, in the meeting of the General Assembly of the Federation of Eurasian Exchanges (FEAS), in which the Iraqi Stock Exchange acquired its membership in May 2005.
In addition, the market participated in the Capital Markets Talks conference, in which the Securities Commission represented by its Chairman Faisal Al-Haymes participated, in addition to the Ministers of Economy and Finance in the State of Armenia and a number of chairmen of the boards of directors of the financial markets and the Iraq Stock Exchange represented by the expert Taha Ahmed Abdel Salam, Executive Director of the market And the participation of the Chairman of the Board of Governors and a number of members of the Board of Governors.
In an intervention during the conference, the Chairman of the Securities Commission Faisal Al-Haymes presented the commission's vision and the role of the stock market in developing the economy through the development of the establishment of joint stock companies and their inclusion in the Iraqi Stock Exchange.
He proposed the nomination of the Iraqi Stock Exchange to the membership of the Business Committee / Committee to Study the Development of the Brokerage Companies Members of the Federation and their role in marketing investment in securities, along with the Muscat Market and the Armenia Stock Exchange, and the approval of the members was obtained.
For his part, the Executive Director of the Iraq Stock Exchange, Taha Ahmed Abdel Salam, participated in the meeting of the Board of Directors of the Federation and in the General Assembly of the Federation, and among the most important plans proposed to the Federation and the financial markets is to nominate the topics required for case studies to universities, in addition to supporting letters and theses through Capital markets journal proposed to be organized as of 2022.
The meetings and the conference concluded by setting the vision of the Federation and the financial markets for the years 2022-2024, including the proposed development plans.
The stock exchanges in Iraq, Egypt, Oman, Iran, Armenia, Kazakhstan, Syria, Ukraine, Greece, Cyprus, Jordan and Union guests from other markets participated in the meetings and conference, along with the participants via the Zoom application.
Clarification from the Ministry of Finance regarding the dollar exchange rates - urgent
Today, Sunday, the Ministry of Finance confirmed that economic growth has begun to recover gradually, following the contraction of the Corona pandemic last year
The ministry said in a statement received by Alsumaria Yanuz, that it "adopted the exchange rate to supplement national production, protect the central bank reserves and support the budget," noting that "the ministry has borne, during the past three years, the burdens of a stifling financial crisis that threatened the state's ability to fulfill its obligations that are already burdened with the burdens of a large legacy." Represented by the inflation rate of public spending and the rise in the wage bill, which threatened the insurance of the salaries of its employees, in light of a sharp drop in international oil prices and a dangerous health situation due to the consequences of the Corona pandemic on the national economy and its repercussions on the economic reality and the social fabric.
He explained, "The ministry continues to balance the need for prudent public financial management with its obligations to ensure the protection of the weakest and most needy groups, as well as the international community's support for policies Ministry of Finance Acknowledge everyone International Monetary FundAnd the World Bank manages public finances under very difficult conditions
According to the semi-annual report of the World Bank on the Iraqi economy, economic growth began to recover gradually in the wake of the downturn that afflicted it as a result of the Corona pandemic last year, and this is partly due to the increase in non-oil activity
The report continued, “It is expected that the improvement in global oil market conditions will enhance economic growth in the medium term and transform financial and external balances into surpluses from 2021, to reverse the recent rise in debt,” noting that “the main downside risks are due to potential epidemiological developments, Volatility in oil prices, setbacks in the security situation, and impede the implementation of economic reform
He pointed out that "IraqIt is one of the most oil-dependent countries in the world, and over the past decade, oil revenues accounted for more than 99% of its exports, 85% of the government budget, and 42% of GDP, which is an excessive dependence on oil that exposes the country to macroeconomic fluctuations
And he stated, "The Corona pandemic had a significant impact on Iraq's GDP in 2020, which shrank by 15.7%, and budget revenues shrank by 9% to reach 32% of GDP, which led to a sharp decline in public spending and investments. "Starting from January 2021, the unemployment rate has increased by more than 10% than it was before the pandemic, which was 12.7%."
He continued, "At a time when economic conditions in the country are improving Iraq Gradually with the recovery of international oil markets, this recovery is also fraught with major risks posed by structural constraints, including public investment management constraints that have affected the delivery of public services, slow repayment of overdue debt especially those related to public wages and the burden of state-owned banks andCentral Bank of IraqSovereign debt players, in addition to the fragility of the political situation, weak health care system, and endemic corruption that continue to foment unrest across the country.”
He stressed, “The White Paper is a comprehensive framework to address oil dependence and structural problems, and represents a medium-term strategic framework for decisions comprehensive economic reform
He pointed out, "The recent developments, brought about a gradual recovery of the economy from its double shock in 2020, represented by (the drop in oil prices and the outbreak of the Corona pandemic), as the statistics indicate the gross domestic product by 0.9% for the first half of 2021, and the growth of the non-oil economy by More than 21% in the first half of 2021, and this is due to the strong performance in the service sectors after easing measures to prevent the emerging corona virus, after the spread of the vaccination campaign and the decrease in infections
He added, "This recovery reduced the lag in the oil sector, by 10% in the first half of 2021, as it adjusted Iraq Its share in OPEC early in the year, and since then, OPEC has gradually increased the production share of member states, which was reflected in an increase in GDP. The general and core inflation rate in Iraq In the period from January to July 2021, reaching 5.2% and 6.3%, respectively, due to the increase in domestic demand and the insufficient supply of commodities to fully meet the increasing demand, in addition to the positive impact of inflation due to the decline in import prices in some exporting countries facing a deterioration in the value of their local currencies.
On the external front, the report indicated that inability The current account also turned into a surplus of 4.7% of GDP in the first quarter of 2021, which contributed to an increase in the total official reserves of the Central Bank of Iraq by about 5 billion US dollars to reach 58.5 billion US dollars in the first quarter of 2021 compared to 54 billion US dollars. US dollars at the end of 2020.
Regarding the future outlook, the report stated, “The prospects for the Iraqi economy have improved with the recovery in global oil markets, but the spread of the new Corona virus variables and the challenges of climate change constitute new risk factors,” noting that “it is expected that the economy will gradually recover against the background of high oil prices and an increase in oil prices.” OPEC production quotas that are scheduled to be phased out in 2022.
He added, "The oil GDP will be the main driver of growth in the medium term. It is expected that the non-oil GDP will improve, but it will remain with an average growth of less than 3% between the years 2021-2023 due to the mutated generations of the Corona pandemic, in addition to the challenges it faces." The Iraqi economy, foremost of which is the lack of water and electric power, which affects agriculture and industry.
He concluded, "The indicators of the poverty line rose, which is linked to a direct relationship with the rise of the Corona pandemic, in addition to some social disturbances facing Iraq For years, appropriate planning is required to achieve effective social goals.
The Iraqi government justifies the reasons for adopting a new exchange rate for the dollar
Today, Sunday, the Iraqi Ministry of Finance clarified the reasons for adopting a new exchange rate for the US dollar against the local currency, noting that this came to supplement national production, protect the central bank's reserves and support the budget.
In a statement received by Shafaq News Agency, the Ministry of Finance said that, during the past three years, it has borne the burden of a stifling financial crisis that threatened the state's ability to fulfill its obligations that were already burdened by a large legacy represented by the inflation rate of public spending and the rise in the wage bill, which threatened to secure the salaries of its employees, in light of the low Sharp global oil prices and a dangerous health situation due to the consequences of the Corona pandemic on the national economy and its repercussions on the economic reality and the social fabric.
The Ministry of Finance indicated that the general budget continues between the need for a wise public financial management with its obligations to ensure the protection of the weakest and most needy groups, pointing to the support of the international community for the policies of the Ministry of Finance, as the International Monetary Fund and the World Bank approved public financial management under difficult circumstances. Extremely .
In a previous statement, the Iraqi Ministry of Finance issued, on the fifth of last October, a clarification regarding the exchange rate of the US dollar, noting that changing it worked to "stop the fall of the reserve currency and enhance import capabilities."
The indicators showed, according to the financial statement, a clear improvement in commercial activity in the past nine months of the current year 2021 in light of the crisis of the spread of the COVID-19 virus, and it also helped to stop the penetration of the Iraqi market and flood it with cheap goods that curb attempts to upgrade local production.
It is noteworthy that the Central Bank of Iraq, on December 19, 2020, officially announced the amendment of the foreign exchange rate (the US dollar) to be 145,000 dinars for every $100, according to the state’s general budget for the year 2021 approved by the House of Representatives
Iraqi Finance: We have adopted the dinar exchange rate to protect foreign reserves and support the budget
The Iraqi Ministry of Finance revealed, today, Sunday, the reasons for adopting the current exchange rate, while it expected a gradual recovery of the economy
A statement by the ministry said today, Sunday, that it "adopted the exchange rate to supplement national production, protect the central bank's reserves and support the budget
The ministry indicated that during the past three years, it had borne the burden of a stifling financial crisis that threatened the state's ability to fulfill its obligations that were already burdened by a large legacy represented by the inflated public spending rate and the rise in the wage bill, which threatened to secure the salaries of its employees, in light of a sharp decline in international oil prices and a dangerous health situation due to The consequences of the Corona pandemic on the national economy and its repercussions on the economic reality and the social fabric
The ministry explained that it "continues to balance the need for prudent public financial management with its obligations to ensure the protection of the weakest and most needy groups, as well as the support of the international community for the policies of the Ministry of Finance
According to the World Bank's semi-annual report on the Iraqi economy, economic growth has begun to recover gradually in the wake of the downturn that hit it as a result of the Corona pandemic last year, and this is partly due to the increase in non-oil activity
She report continued, "It is expected that the improvement in the global oil market conditions will enhance economic growth in the medium term and turn financial and external balances into surpluses from 2021, to reverse the recent rise in debt
She pointed out that "the main downside risks are due to possible epidemiological developments, fluctuations in oil prices, setbacks in the security situation, and impede the implementation of economic reform
He pointed out that "Iraq is one of the most oil-dependent countries in the world. Over the past decade, oil revenues accounted for more than 99% of its exports, 85% of the government budget, and 42% of GDP, which is an excessive dependence on oil that exposes country to macroeconomic fluctuations
And he stated, "The Corona pandemic had a significant impact on Iraq's GDP in 2020, which shrank by 15.7%, and budget revenues shrank by 9% to reach 32% of GDP, which led to a sharp decline in public spending and investments
The statement indicated that "starting from January 2021, the unemployment rate increased by more than 10% than it was before the pandemic, which was 12.7%
A large banking delegation will visit Saudi Arabia at the end of the week, and Riyadh is financing the establishment of an Iraqi outlet
An informed source in the Central Bank of Iraq said in a press statement, "A large banking delegation will visit Saudi Arabia, headed by the Governor of the Central Bank, Mustafa Ghalib, on November 19."
He added that "Saudi Arabia agreed to open two branches for the Trade Bank of Iraq and the National Bank of Iraq."
It is noteworthy that an Iraqi delegation visited Saudi Arabia last October and agreed to open the two branches, which would develop banking and economic relations.
Iraqi-Saudi relations began to improve with the government of Haider al-Abadi in 2017, and since then, a Saudi embassy has been opened in Baghdad, and the Iraqi-Saudi Coordination Council has been established.
Prime Minister Mustafa Al-Kadhimi and Saudi Crown Prince Mohammed bin Salman alike called for economic openness and increased expansionary economic integration in the Gulf.
The opening of the Arar crossing in 2020 was a first step to reopening the four border posts that were closed after the former regime's invasion of Kuwait in 1990.
Trade between the two countries currently amounts to one billion dollars annually.
Meanwhile, the spokesman for the Border Ports Authority, Alaa Al-Din Al-Qaisi, said that "Saudi Arabia has agreed to establish the Al-Jumaymah port in the Muthanna governorate, and it will bear the cost of its establishment from the Iraqi side."
"The authority approved the Saudi proposal at its last meeting, but it may need more than a year to establish it," he added.
"Al-Ahly of Iraq" launches certificates of deposit with an annual interest rate of 6.5%
On Sunday, the National Bank of Iraq announced the launch of certificates of deposit with an annual interest rate of 6.5%.
The bank said in a post on its Facebook site, which was seen by "Al-Iqtisad News", that it decided to "grant certificates of deposit with a guaranteed return rate of 6.5%."
He added that "the deposits of the National Bank of Iraq are subject to insurance by the Deposit Insurance Company."
It is noteworthy that the National Bank of Iraq currently has 18 branches spread in all major Iraqi cities.
International experts announce a new amount for the remainder of Iraq's compensation to Kuwait
The International Experts Committee announced today, Sunday, an amount different from what was announced recently from the remaining compensation from Iraq to Kuwait, explaining that the remaining amount of that compensation is 476 million dollars, while it is likely that the full compensation will be paid in the last quarter of this year.
The Compensation Committee had previously indicated on its website on October 31, 2021, that the remaining amount to be paid from these compensations amounted to 324 629 million US dollars.
The financial advisor to the Iraqi government, Mazhar Muhammad Salih, said in a previous statement to Shafaq News Agency, that the remaining compensation from Kuwait is 600 million dollars, after paying compensation for the third quarter of the current year 2021, and that these compensations will end in the first quarter of 2022. .
The Committee of International Experts said, in a statement received by Shafaq News Agency, that "after paying the third quarter payment for the year 2021, the amounts of deductions paid to the Compensation Fund for Oil Exports and deposited for the next stage amounted to 153 million dollars,” noting that "the amount required to be deducted from Iraqi exports. Oil and gas is $476 million.
And the committee added, “With the continuation of the level of global oil prices at what it is now, and if the relevant Iraqi authorities and the ministries of finance and oil and the Central Bank completed payment in return for the in-kind payments to The oil companies that have service contracts, and the Kurdistan Region contributed to the consequences of its oil exports for the past period, the amount of compensation will be finally paid in the last quarter of this year.
The head of the Financial Experts Committee, Abdul Basit Turki Saeed, had called on the Security Council, in his speech before the Compensation Board of the United Nations at its 88th session, held at the United Nations headquarters in Geneva, that the compensation file include a clause that protects Iraq from any future claims for the Kuwait war and that Iraq be expelled completely from the provisions of Chapter VII of the Charter of the United Nations and canceling the consequences of all decisions on Iraq as soon as it pays the amount of compensation .
Iraq must deposit 5 percent of its export revenues from sales of oil, its products and gas, before reducing it to 3 percent in 2018 in a UN fund established under the name of the United Nations Compensation Fund.
In 1991, a UN Compensation Committee was formed, obligating Baghdad to pay $52.4 billion in compensation to individuals, companies, governmental organizations and others, who incurred losses resulting directly from the invasion and occupation of Kuwait.
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