After the "change" of the exchange rate, speculators empty the pockets of Iraqis in hours
These are the articles I discussed on the My FX Buddies Podcast
After Iraq's exit from Chapter VII.. Al-Samarrai calls for an effective strategy for banking investment
Today, Wednesday, the head of the Alliance of Azm Muthanna al-Samarrai called for .an effective strategy for banking investment after Iraq’s exit from Chapter VII
Al-Samarrai said in a tweet to him on his official account on Twitter, which was followed by (Baghdad Today), that "today, Iraq is liberated from the bondage of compensation that has burdened it for thirty years.
And trade to revive the economy .and get out of the stagnation state to developmen
A meeting brings together Al-Sadr with the leaders of the Sadrist bloc
Today, Wednesday, the leader of the Sadrist movement, Muqtada al-Sadr, met with the head of the Sadrist bloc, Hassan al-Adhari, and his deputy, Hassan al-Kaabi, as well as the deputy speaker of Parliament, Hakim al-Zamili.
Al-Zamili said in his blog, followed by “Nas” (February 23, 2022): “We were honored to meet with His Eminence, the Iraqi leader, the leader, Muqtada Al-Sadr (may God honor him) today, February 23, in Najaf, the honorable, blessed tenderness, and we listened to the instructions and advice of His Eminence in implementing the reform project and activating legislative tasks and oversight for the House of Representatives, and to provide all available capabilities to serve the honorable citizen.
Today, Wednesday, the leaders of the Sadrist bloc held a press conference in Najaf province, regarding the dollar exchange rate, and hosting the Minister of Finance in Parliament.
Deputy Speaker of Parliament Hakim Al-Zamili said in a press conference attended by a “Nass” reporter (February 23, 2022), that “more than 100 deputies signed the hosting of the Minister of Finance.”
He added, “The rise in the dollar exchange rate did not benefit the state, and we pledge our people to proceed with the reform project.”
For his part, the deputy head of the Sadrist bloc, Hassan al-Kaabi, said that “we are continuing to investigate the electricity file.”
Al-Kaabi indicated that “the oil file is among our priorities, and the suspicions in the licensing contracts are clear.”
Al-Kazemi: Closing the compensation file is a new beginning to restore Iraq’s role through the vision of the state, not the absurdity of the non-state
Al-Kazemi said in a tweet on Twitter: "Iraq has succumbed to its efforts on the path of normal relations with its neighbors, brothers and the international community by closing the file of UN resolutions that resulted from the absurd adventures of the previous regime, and whose cruel price our people paid for 32 years."
He added, "It is a new beginning for Iraq to restore its role and presence through the vision of the state, not the absurdity of the non-state."
Yesterday, Tuesday, the UN Security Council unanimously issued a resolution officially ending the mandate of the “United Nations Commission on Compensation for Damage Resulting from the Saddam regime’s invasion of Kuwait in 1990,” after Baghdad paid the full sums owed to Kuwait, amounting to 52.4 billion dollars.
After the "change" of the exchange rate, speculators empty the pockets of Iraqis in hours
In a short period not exceeding 48 hours only, currency speculators made millions of dollars, after they spread and exaggerated rumors about the government's attempt to change the dollar exchange rate in the current year 2022 budget to start large dollar purchases from citizens who were saving some of them to sell for fear From the loss, prices will rise again after the bank denied any change in the exchange rate.
On December 19, 2020, the Central Bank of Iraq officially announced the amendment of the foreign exchange rate (the US dollar) to 145,000 dinars for every $100, according to the state's general budget for the year 2021 approved by the House of Representatives.
As a result, according to specialists, the annual inflation in Iraq rose significantly, so that the prices of all materials and commodities in the Iraqi market rose significantly, which sparked a wave of strong resentment among the popular circles, as well as the objections of some interested in economic affairs.
Kick the start: Al-Sadr's call and Allawi's rejection
Economist Dergham Muhammad Ali told Shafak News Agency, "The tweets of the leader of the Sadrist movement, Muqtada al-Sadr, and his bloc's insistence on hosting the Minister of Finance and the Governor of the Central Bank created a feeling that the exchange rate change will take place within hours, so the majority went to sell with the absence of buyers, which contributed to reducing the purchase price of the dollar compared to the price of the dollar." the day before."
Ali adds that "the statements of the Governor of the Central Bank, who confirmed that there was no change in the exchange rate led to the rise of the dollar's value once again," stressing that "the issue is an issue of supply and demand that speculators exploited to make profits from this game."
Al-Sadr had made it clear in his tweet, on February 16, 2022, that "after the rise in the exchange rates of the dollar and its benefits and harms, its rise should absolutely not be an increase in market prices, especially with regard to important commodities that the people need in their daily life on the whole. Absolutely."
The Presidency of Parliament also decided, on February 17, 2022, to summon the Minister of Finance and the Governor of the Central Bank, in the dome of the House of Representatives immediately to talk about the dollar price file and the management of financial policy in Iraq, which was rejected by Finance Minister Ali Abdul Amir Allawi, and announced that he would request a vote of confidence in him.
The situation escalated rapidly after the minister considered the summons as a result of the tweet of the leader of the Sadrist movement, to which the deputy speaker belongs, and that the entire process is unacceptable and should not be tolerated, which called on the first deputy speaker of the House of Representatives, Hakim Al-Zamili, to issue a request for the Public Prosecution to prevent travel against the right. The Minister of Finance, Ali Abdul-Amir Allawi, until he completes the requirements for his attendance at the House of Representatives to answer questions after that, he has the right to resign or stay.
Al-Zamili accused the Minister of Finance of transferring his losing experiences to the companies he managed abroad to Iraq, and he did not provide anything to the country, and contributed to the rise of Iraq's debts to 27 trillion dinars in just one year.
In light of this government-parliamentary escalation, the dollar’s prices fell in the local markets, accompanied by rumors indicating the government’s intention to reduce the price of the dollar, which led to citizens selling the dollars they had in their possession at prices that reached less than 141 thousand dinars for 100 dollars, after it was 148 thousand dinars for 100 dollar.
“Government’s inability to remedy the situation”
For his part, financial expert Hilal Al-Tahhan told Shafaq News that "the government did not properly address the results of the rise in dollar prices and left the citizen vulnerable to the rise in prices at a time when it was reaping the positives of this rise, which created negative reactions from the citizens," noting that "the government I used the shock method to deal with the conditions of the Iraqi economy."
Al-Tahhan points out that "what happened during the past week about reducing the dollar's prices has been exaggerated by currency traders in their favor in order to obtain gains as a result of reducing the dollar's prices and then benefiting from the financial differences when they rise."
Summoning is born fear
For his part, the head of the Baghdad Chamber of Commerce, Firas Al-Hamdani, confirms to Shafaq News Agency that "the Iraqi market is unstable, and there is no system and law that limits the dealer who works in currency from selling the currency at a certain number."
Al-Hamdani adds that "the confusion that occurred is represented in the request to summon the governor of the bank and the Minister of Finance, and the latter's failure to attend, which generated some merchants and companies with real fear of a drop in the dollar's price."
Al-Hamdani points out that "those who understand the Iraqi economy and the budget know that the dinar is priced in the 2021 budget and approved by the Parliament and the government, and therefore there will be no new exchange rate and it will come down in the sense that the citizen fears."
No intention to change the exchange rate
For his part, an authorized source in the Central Bank of Iraq confirmed on February 20, after a series of declines in the dollar exchange rate that the Iraqi market witnessed, that there are no intentions to change the current exchange rate, especially after the positive results it achieved during the past period.
The source stressed that "the discussions that took place during the hosting of the Governor of the Central Bank of Iraq in the House of Representatives emphasized the need for concerted efforts by all government institutions to improve the economic and living standards of the poor classes that were affected by the high rate of inflation." The rate change and that the central bank possesses sufficient foreign reserves to stabilize the current exchange rate."
Throwing the ball in the merchant's court
At a time when Finance Minister Muhammad Allawi refused to host him in the House of Representatives, the Ministry of Finance issued self-defense explanations about the exchange rate, indicating that the rise in dollar prices was not the reason for the rise in commodity prices in the country.
It indicated that the inflation in prices that occurred due to inflation is a global phenomenon that is not linked to the devaluation of the currency, as well as the exploitation of some importers and traders by imposing additional prices for the purposes of competition and making gains.
Prices under control
The financial advisor to the Prime Minister, Mazhar Muhammad Salih, confirms to Shafak News Agency that "the monetary policy of the Iraqi state does not suffer from great price pressures despite the low exchange rate of the Iraqi dinar," noting that "prices are under control and inflation is still less than a decimal place."
Saleh explains that "the central bank's job is to fight the sharp and strong inflationary parties," noting that "the bank builds good reserves and achieves some stability within the economy."
Dollar prices remain captive to specialists and those in the central bank in assessing the country's financial condition, as long as the dollar is not subject to flotation.
Politician: Postponing The Federation Will Make The Scene More Complicated And Confusing
Political analyst Hashem Al-Habboubi considered, on Wednesday, that the Federal Court postponed the pronouncement of the appeal decision against reopening the candidacy as the last chance for the political forces to reach an understanding, indicating that the decision to postpone was unnecessary and the court could have settled it today and that it would increase the scene more complicated and confusing.
Al-Haboubi said in a statement to "The Information", that "the decision on a constitutional issue to reopen the door for candidacy for the position of the republic or not should have been resolved today because the issue is related to the constitution and not previous cases in which there are accusations and evidence, and the issue is only considered whether the constitution permits or not."
He added that “the current electoral cycle can be described as the Federal Court cycle because the political forces went to it in every stray and incoming,” believing that “the court, by postponing it to the first of March, is to give another opportunity to the political forces for understanding, and this period is not enough, but will increase the scene more complicated and confusing.”
Al-Zamili: The Rise In The Dollar Exchange Rate Did Not Benefit The State
The First Deputy Speaker of the House of Representatives, Hakim Al-Zamili, announced today, Wednesday, that more than 100 deputies signed to host the Minister of Finance, while noting that the high exchange rate did not benefit the state.
Al-Zamili said, in a press conference, which was followed by "The Information", that "Finance Minister Ali Allawi repudiated the legal and legal responsibility, and made false pretexts for not attending the House of Representatives."
He added, "The question to be directed to the Minister of Finance, about the reasons for the exchange rate in return for the increase in the prices of foodstuffs and commodities, and the harm of a large segment of the poor, people with special needs and those with limited income."
Al-Zamili stressed, “The Ministry of Finance is to find solutions and treatments for the ration card, increase vocabulary in it, social welfare salaries, and more inclusion for the poor and people with limited income, in addition to the need to support the Ministry of Health to provide treatments to patients,” noting that “the wrong financial policy of the current minister, burdened Iraq with debts as It doubled during 2020 and amounted to 40 trillion dinars, and Iraq borrowed about 27 trillion dinars in the same year, as the debt rose by 67% within one year.
He explained, "Changing the exchange rate is a matter of the Central Bank, and changing it by the Minister of Finance interferes with monetary policy," noting that "there is great corruption in the tax, customs and other departments of the ministry, and he was supposed to collect money from these to maximize revenues."
He pointed out that "the state did not benefit from those revenues, but went into the pockets of the spoilers, and a high percentage of the currency auction was acquired from some banks, so it is necessary to inquire about the issue of forged invoices and currency smuggling and everything related to monetary policy," noting that "a committee was formed under our leadership." And a number of members of the House of Representatives, who are specialized in fact-finding and scrutiny of all of the above.
He continued, "According to Article 61 of the Constitution, Article 27 Tenth, Article 30 First of the Parliament Law and Article 30, reform must proceed to combat corruption."
The Citizen And The Story Of The Dollar
Many friends advised me, when I told them of my intention to write about the dollar, in the midst of the demands to reduce it against the Iraqi dinar, not to go into this part in the current situation, as boats got lost in the river of various opinions, between supporters and opponents, and these opinions were dominated by images of compliments and ( Attacks) according to the nature of the known tendencies and trends in the political street.
From my humble knowledge of sober and academic financial and economic studies, discussions with elite economists, and participation in conferences specialized in the economy, I was convinced that returning to the previous exchange rate of the dollar has major and dangerous repercussions (internally and externally) on the overall economic cycle in Iraq, as it confuses the work of local markets, and cancels the gains made by the current exchange rate,
Despite the good intentions that called for the return of the exchange rate to its previous era, and there is no doubt that they are intentions, aimed at breaking the dams of the rise in the prices of goods and materials related to the livelihood of the citizen, but the results in my opinion in the medium and long term will be a major obstacle on the path of economic advancement, and in providing structures Solid infrastructure that establishes a promising future, and weakens Iraq's credibility before the world.
The contradictory news, the different dialogues and propositions that bombard the citizen now and then in the media, regarding the dollar and the endless (will it decrease or stay?) made the citizen live with clear anxiety in his home, in his workplace, and when he is shopping and visiting, which is Anxiety that I fear could lead to a lack of objective and self-awareness. In this regard, I hope that the Central Bank of Iraq will hold on to its position, stop discussing this issue, and move towards issuing quick and capable government laws that will reassure and restore to the citizen what he lost of his resource and salary in the past period, by increasing the vocabulary of the ration ration and the stability of its dates, Increasing the number of those covered by social care, paying attention to hundreds of thousands of the unemployed, allocating easy amounts for them to help them live a decent life, activating the price of medicine in pharmacies, providing it in hospitals, and reducing unnecessary expenses for presidencies, ministries, and agencies, and other living matters, are the most important in the current stage. .
God darn the dollar!
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