WOTS FRI 12 10 21 Harvest monetary policy for 2021 in support and stimulation of the Iraqi national economy
Audio below here
These are the articles I discussed on the My FX Buddies Podcast:
I didn't do the podcast but I will
https://twitter.com/IraqiPMO/status/1468518183707492355/photo/4
December 9th, 2021
Deloitte report on Oil and Gas review in the Iraqi Kurdistan Region - Q1 and Q2 of 2021
Al-Kazemi participates in the “Leaders for Democracy” summit .. Biden hosted via the Internet
On Thursday, Prime Minister Mustafa Al-Kadhimi participated in the opening of the Leaders Summit for Democracy.
A statement by Al-Kazemi's office said, "Nass" received a copy of it, (December 9, 2021), that "Prime Minister Mustafa Al-Kazemi participated in the opening of the Leaders for Democracy Summit, which was held via closed circuit television, and hosted by US President Joe Biden."
Prime Minister Mustafa Al-Kadhimi stressed, Thursday (December 9, 2021), during his speech before the Leaders for Democracy Summit, that Iraq had defeated ISIS militarily and morally without neglecting the idea of democracy.
Al-Kazemi's media office stated, in a statement received by IQNEWS, that the latter "participated in the opening of the Leaders Summit for Democracy that was held via closed-circuit television, where he delivered a speech in which he reviewed Iraq's position and its approach to democracy as an ideal way to achieve good governance."
The work of the summit witnessed a discussion of the democratic reality at the world level, a number of special issues in this regard, and ways to strengthen the mechanisms of democratic governance.
The summit witnessed an exchange of views between the participating leaders, and a review of the most important challenges facing the civilized world and ways to address them.
Al-Kazemi stressed, in his speech, that "the emerging democracy in Iraq faced the challenge of the brutal terrorism that tried to impose its will, but the Iraqi people defeated the terrorism of ISIS and others militarily and morally, without neglecting the idea of democracy."
The Prime Minister called on the leaders of the summit to "develop a broader perspective on democracy that is linked to joint international action, and includes support for sustainable development in developing countries in particular."
The summit opened today via closed-circuit television, hosted by US President Joe Biden, with the participation of leaders and representatives of more than 100 countries.
The Governor of the Central Bank of Iraq meets the UAE Minister of Tolerance and Coexistence, Commissioner-General of Expo 2020
Central Bank of Iraq
Media Office
9/12/2021
Finance: The white paper was launched to correct structural distortions in the economy
Allawi explained, according to the statement, that "the government program and sustainable development plan aimed at investing in people, modern technology and work institutions to create added values has become the main cause of poverty and epidemics, reducing disparities in living standards, climatic changes and water pollution, so it is necessary to work seriously to sustain life in our country and ensure Society will enjoy peace and prosperity by 2030 through partnership between the public and private sectors
The reform paper stressed, according to the statement, the "necessity to rebuild all sectors and in various fields, whether leadership, administrative, humanitarian and personal. Technological skills occupied a large part of the government's concerns, such as digitization and automation of systems and the application of the ASYCUDA system, which is one of the modern systems to strengthen reform measures to improve the performance of financial institutions, including Collecting customs taxes at ports and border crossings
Allawi concluded, "Our participation in this civilized platform in Dubai for the year 2021 provides us with many opportunities to benefit from the outputs of science, technology and artificial intelligence in particular, and opens new horizons in the world of economy and education, and stimulates talent and entrepreneurship.
Economist: Two Parties Benefit The Most From Changing The Exchange Rate
The economic expert, Manar Al-Obaidi, stated, on Thursday, that companies and banks are the biggest beneficiaries of the exchange rate change that took place at the beginning of this year.
Al-Obaidi said, in a post on his Facebook page, which was followed by the “Information” agency, “At the beginning of 2021, the exchange rate of the dinar against the dollar was changed, and one of the goals was to reduce the differences between the official exchange rate and the exchange rate in the local market.”
He added, "Depending on the data of the Central Bank of Iraq, the value of sales in central dollars from the beginning of 2021 until October 2021 amounted to about 29 billion US dollars, a decrease of 20% compared to 2020 and by 31% compared to 2019, but it is still higher than the sales of the Central Bank for the year 2016 which amounted to $26.5 billion.
He pointed out that "the percentage of differences between the central exchange rate and the exchange rate in the local market amounted to 1.82%, and the value of the differences until October of this year amounted to 526 million US dollars, a decrease of 52% compared to 2020, where the value of the differences was 1.11 billion US dollars, but the differences increased." Compared to 2019, by 13%, where the value of the differences was 464 million US dollars.”
He continued, "The year 2015 was the highest in differences, as it amounted to 2.6 billion US dollars at the time, or 7.41% of the total sales. Therefore, reaching 1.82% is considered an achievement in reducing the value of the differences significantly."
He considered that "these differences made profits for many banks and companies that benefited from these amounts, especially in the years (2015, 2016 and 2017), where the percentage of differences exceeded 7%."
He pointed out that "the total differences between 2010 and 2021 amounted to more than 18 billion US dollars, representing 4% of the total sales of the Central Bank, which amounted to 450 billion US dollars.
Pictures of Kazemi hugging older citizen
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Harvest monetary policy for 2021 in support and stimulation of the national economy
Sameer Al-Nusairi * The year 2021 is approaching its end in complex, cumulative and complex political and economic conditions due to the many challenges facing our beloved country. Which stands as an obstacle to the implementation of the plans of the government and the private sector in the economic and financial reform, which were mentioned in the white paper. In addition to this are the effects of international economic variables, the slowdown in global economic growth, indicators of the economic conflict between America and China, the instability in global oil prices, ups and downs, and the repercussions of the Corona pandemic. All of these subjective and objective repercussions did not prevent the Central Bank administration during the year 2021 from implementing its ambitious reform plan in overcoming the challenges of stability in the financial and monetary system and stimulating the economy with the aim of achieving economic stability. The Central Bank started its reform measures and initiatives in 2021 as follows: ‐ First - by launching its second strategy for the years (2021-2023) in conjunction with the strategy for economic and financial reform that the government adopted in the white paper. The new strategy drew a clear roadmap of goals and policies for a period of three years, and set the main goals as 15 goals and the sub-objectives at 75 goals, and charted the way for banking reform in accordance with the following main goals:- 1- Supporting and achieving monetary and financial stability. 2- Enhancing and strengthening the banking sector and financial institutions. 3- Enhancing digital transformation in the central bank and the banking sector. 4- Developing the organizational structure and human resources of the Central Bank. 5- Activating and integrating the internal and external relations of the Central Bank. Secondly - the focus was also on controlling the new exchange rate of the Iraqi dinar and fixing it as a clear goal during the year through several measures, most notably issuing new instructions for buying and selling foreign currency for the year 2021, which are new instructions to banks and exchange companies and mediating the sale and purchase of authorized foreign currencies. The instructions are based on Central Bank Law No. 56 of 2004 amended and aims to strengthen the role of the banking system and non-bank financial institutions in securing foreign currency to the beneficiaries and controlling its movement internally and externally, leading to control and maintaining the stability of the exchange rate and compliance with the requirements of the Anti-Money Laundering and Terrorist Financing Law No. 39 of 2015 The Central Bank took many measures and initiatives to stimulate the economy and revitalize the economic cycle, which contributed during the year to controlling the target exchange rate for the public, which is (1470) dinars against the US dollar. Therefore, the new instructions regulate the process of selling foreign currency in the currency window, through which it will be implemented to maintain the stability of the exchange rate, control the movement of foreign currency locally and internationally, and abide by international standards for compliance rules and combating money laundering and terrorist financing. And let us not forget here how the US dollar devoured the local currencies of neighboring and regional countries, which suffered from a circumstance similar to that of Iraq, such as Iran, Turkey, Lebanon and Syria Where the local currency collapsed in very large proportions. While the Iraqi dinar exchange rate stabilized within the target rate of the Central Bank, which was specified in its statement in December 2020, despite the speculation in the market. In which the reasons for the decision to amend the exchange rate were clearly indicated, which are as follows:- 1- It is the structural distortions in the Iraqi economy that have impoverished public finances and restricted the reform capacity that the government and the Ministry of Finance are seeking. It is no coincidence that the financial situation is so bad, but it took root more than a decade and a half ago due to the political leadership of the economy, the priority of political thinking over economic thought, development priorities and the rules of the relationship. Thus, fiscal policy failed to perform its roles, and monetary policy was preoccupied with restoring the confused financial policy outcomes. 2- The dependence of the economic and financial policy on the ambitions and concerns of politicians has led to the latest accepted models of financial management in Iraq, and the role of that administration has been limited to distributing oil resources to life-sustaining requirements such as salaries and operational requirements. 3- Because of these combined conditions, the Central Bank had no choice but to intervene on more than one occasion to support public finances and save critical public spending requirements. 4- The Central Bank understands the difficulties facing the government’s intentions of reform, but this does not prevent it from pledging any steps that the monetary authority can take to effective steps to carry out reforms that inevitably affect the financial authority’s institutions, especially the effective collection institutions, customs and tax institutions, and the financial institutions. The other public levying, and that spending be streamlined and rationalized, and all of this depends on the political will of the higher state institutions that support the financial authority’s directions to achieve this. This requires the government's direction to support the vulnerable groups, who will inevitably be directly affected, especially by any measure to change the exchange rate. 5- The legislative authority will have an important role in supporting the Central Bank’s direction to adjust the foreign exchange rate, as failure to take such a decision may make us obliged to take difficult decisions that may put Iraq in a situation similar to what neighboring countries have been exposed to. It should also be emphasized here that this change (devaluation) in the value of the Iraqi dinar will be for one time only and will not be repeated. 6- The financial crisis that Iraq was exposed to due to the Corona pandemic and the resulting deterioration in oil prices and the decline in oil revenues, this led to a large deficit in the general budget and the Ministry of Finance was forced to borrow from banks and re-discount them with the Central Bank in large amounts, for the purpose of paying salaries. And meet other spending needs related to services provided to citizens. Third ‐ The Central Bank also issued several initiatives to revitalize the national economy and support citizens, as Indicators and official data indicate the success of the Central Bank’s economic and lending initiatives, which are a number of reform measures planned and put into practice by the Central Bank, which were accompanied by the decision to reduce the exchange rate of the dinar in order to alleviate the burdens that citizens with low incomes are expected to suffer and for the purpose of creating monetary balance in the market Trading and facing the repercussions that can occur as a general situation facing countries that reduce the exchange rate of their local currency and investing in positive cases to strengthen the financial position of the government, reduce the budget deficit and overcome the causes of internal and external borrowing, in addition to protecting and supporting the local product. Governmental and private banks have contributed to the implementation of the aforementioned Central Bank initiatives In the above, with all care and accuracy, which led to achieving good results regarding activating, facilitating and simplifying procedures to increase financing and loans for small, medium and housing projects, individuals and companies. Where 10,000 small and medium projects were financed, with up to (12,000) unemployed workers, and an amount of (850) billion dinars was disbursed, at a rate of 85% of the one trillion dinars initiative allocated to private banks, and (5) trillion dinars and (2.6) trillion other dinars were allocated to finance Housing projects, in addition to the (6) trillion dinars that were allocated in 2016, while continuing to grant employees whose salaries are less than one million dinars and whose residence is with banks, loans amounting to (15) million dinars without interest and without a sponsor, in addition to the continuation of government banks specialized in lending industrial projects Agriculture and housing are part of the five trillion dinars initiative, which constitutes an advanced lending rate, especially housing loans. Fourth ‐ At the level of developing banking work and increasing it The percentage of financial inclusion, where a growth of up to 50% was achieved in the new opened accounts, and the number of accounts reached 6 million. It also implemented the second central bank strategy regarding the development of electronic payment systems and the transition to the cashless society. The number of ATMs operating in our banks reached (1,170) tellers and points of sale with up to (4) thousand points of sale, and the number of activated bank cards reached (12) million cards and activated electronic wallets With a limit of (3) million and (500) thousand portfolios, and the other important aspect that was achieved in 2021 is the commitment to international rules and standards for compliance, anti-money laundering, financial reporting and risk management. Fifth- At the level of external banking relations and building banking cooperation and coordination relations with banks of Arab and regional countries based on continuous and permanent communication with the governors of banks and financial and banking institutions in these countries based on drawing a road map and reaching agreements and understandings with the Saudi Central Bank and financial institutions in a way that enhances transactions Banking relations between the two sides and benefit from the successful experiences in both countries and to enhance and activate cooperation with the Central Bank of Turkey to discuss the development of banking and financial relations and the development of banking relations between the two countries, and support the opening of branches of Iraqi banks in Turkey and the opening of mutual accounts, which contributes to the development of commercial relations between the two countries on the basis of transaction Likewise. Inviting the Turkish Central Bank to provide facilities to Iraqi banks to facilitate the settlement of the trade balance between the two countries and the transfer of funds belonging to Iraqis residing in Turkey. All of the above measures that the Central Bank accomplished in extremely complex economic conditions are considered important achievements that were achieved in 2021, and the Bank is moving at a steady pace to implement its new strategic goals until 2023 to achieve overcoming the challenges of the financial system and the monetary system on the path to achieving complete economic stability. * Advisor to the Association of Iraqi Private Banks |
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