A fixed or fixed exchange system for the Iraqi dinar
The video for this blog post is below here:
First: a fixed system:
Rentier countries seek to adopt a fixed exchange system (pegged) to a strong foreign currency or several currencies (a basket of currencies) to ensure the stability of foreign transactions, as long as they export one depleted commodity and import many goods and services, and they are called “small open countries.”
Despite the agreement that the floating currency system is considered the best in terms of relative response to the performance of the external economy and the lack of need for sometimes excessive use of foreign reserves to defend the official value in the peg system, the abundance of reserves and the need for stability in foreign transactions have a major impact on the economy. Overall, rentier countries are likely to adopt a fixed exchange rate system.
Iraq is one of the economies whose monetary authority adopts an openly fixed exchange rate system (De jure) and strives to be realistically fixed (De facto). The Iraqi dinar’s peg is classified as a “soft peg” peg that includes accepting a fluctuation of no more than 2% during the period. The last 6 months of IMF audit and 1% average volatility continuously (ereare, IMF, 2021).
When dealing with the dinar exchange rate, a distinction must be made between the fixed exchange rate that affects the market, and the contractual exchange rate between the central bank and the Ministry of Finance when selling its dollars to the central bank (which is proven in the budget for the public revenue account), and the market exchange rate remains the most important because it is dealt with in the markets as a value. Reference.
The official dinar exchange rate went through (roughly) the following stages:
From 2004 – December 2020: Buying: 1190 Selling: 1200
From the end of 2020 - February 2023: Buy: 1460 Sell: 1470
From February 2023 until now: Buying: 1310 Selling: 1320
It is noted that there are 10 points (10 dinars) between purchasing banking and non-banking financial units (exchange companies) and selling them to merchants (transfers/credits) or to individuals (in cash) (noting that there is a change within the ten points for motivational purposes, but it is not extensive) Therefore, during the years 2020-2023, the monetary authority did not leave the fixed exchange system, but rather moved from one fixed exchange rate to another fixed exchange rate, according to what it saw fit in the interest of the overall economy and well-being.
It is natural that the repeated transfers from one constant to another over a short period of time had an impact on the balance levels of the dinar and the size of the gap between the official and market exchange rates. This was reflected in the shifting of financial positions in favor of those holding the dollar again and again in favor of those holding the dinar. It even had an impact in changing The financial positions of creditors and debtors at each change, noting that those with dinar salaries and income are most affected by the gaps and fluctuations between the official value and the market value of the dinar, especially since changing the amount of the assessment was reduced (12-20-2020) and then raised (2-7-2023). It has a clear positive impact even on the macroeconomy, in addition to being a deviation from targeting stability by essentially adopting a fixed exchange rate system.
Second: An installed system
There is no doubt that the dinar exchange rate is determined through the dealings of the banking or non-banking financial units that buy the dollar at a fixed dinar price from the central bank (cash or promotion) with the importing public (merchants) or travelers (cash), that is, whoever determines the market dinar exchange rate ( Then the dollar exchange rate) these units deal with customers, and then following up on what happened since entering the platform at the end of 2022 until now, we find that the dinar’s story took two stages:
- The merchants’ stage: In the beginning, the importing merchants were obtaining dollars (remittances, credits: which are the largest part of daily currency window sales), at a price of 1,320 dinars/dollar, but the merchants set the margins of their imported sales according to the (parallel) cash price, and thus the merchants practiced speculation. The margin of the exchange rate gap, rather than the trading margins of their activity. This behavior is consistent with the state of profit allowed by the market and the prevailing nature of control.
This stage witnessed a gap of up to (1320 - 1550), meaning a margin of 230 points and an exchange gap of (approximately 17%).
- Participation stage: After the banking and non-banking financial units that buy the dollar from the Central Bank (1310 dinars/dollar) became certain that the gap between what they sell (1320 dinars/dollar) and what their merchant customers sell for
(1500-1550), began intervening to share the margin with these clients, and by imposing commissions amounting to
(3%-7%) on dollar sales to customers, whether in cash or promotions. Rather, it was transferred to cards and Western Union under the name of commissions.
So, the price of the dollar moved from (1320 to 1500) and thereabouts, being shared between banking and non-banking financial units and merchants, and it was almost (1320-1400) the share of financial outlets (so 1400 is the cost of purchasing the new dollar instead of 1320.
More than 1,400 are owned by merchants.
Therefore, the natural and legal public is faced with:
- The official price is 1320.
The price for banks is about 1,400 for transfers and credits.
The price for banking companies is slightly higher than 1,400 for cash and transfer.
The price for merchants is between 1400 and 1500.
Therefore, the exchange system became fixed (by cap) (not fixed) and the cost became approximately 1400 dinars / dollar, due to the cap set by the banking and non-banking financial outlets, and in this situation the fixed exchange system was lost (1310-1320).
Therefore, the continuous stabilization has become dependent on the mutual pressure forces between the merchants’ margin for the currency and the margin of the financial outlets for the currency:
Leaving the real margin represented by the added value resulting from financial and commercial activity.
The reflection of this does not stop at the cracking of the fixed exchange system adopted by the monetary authority, which is published in the IMF documents through the Fund’s annual (ARERE) report, but rather goes beyond that to the disparity in the exceptional profits achieved by one financial outlet compared to another (due to commissions) in a way that approaches monopoly. For the banking market, which is based on the difference in market share, due to the availability of important correspondents for this outlet compared to the other.
Returning to stability has become limited to the efforts of the following:
• Follow up on commissions (Central Bank).
• Follow up with customs for the entry of goods.
• Follow up with the authorities responsible for financial crime (reporting office, economic crime) to follow up on unregistered commissions for fear of their incorrect use.
The Iraq Stock Exchange receives the shield of the Arab Financial Markets Union in Doha
: The Iraq Stock Exchange received the shield of the Arab Financial Markets Union in Doha.
A statement from the Securities Commission, received by the Iraqi News Agency (INA), stated that “the Iraqi Stock Exchange participated with the Arab financial markets in the work of the meeting of the General Authority for Arab Financial Markets, and the opening of the trading session of the Qatar Stock Exchange, in addition to the annual conference of the Arab Financial Markets Federation sponsored by the Qatar Stock Exchange.” , which was hosted by the Doha Stock Exchange / State of Qatar for its 2024 edition.
He added, "He also participated in financial market discussions with financial technology experts and the future of trading in financial instruments and ongoing financial market experiences, and discussed the performance of Arab financial markets that are members of the Arab Federation AFCM and joint cooperation plans," pointing out that "the Iraqi Stock Exchange won the position for the second year." First in average daily trading volume for 2023 indices, and won the Arab Capital Markets Federation shield in Doha.”
He continued: “While the Saudi Tadawul market achieved the best position in the number of contracts executed and in the trading value achieved for the indicators of the year 2023,” noting that “the Egyptian Stock Exchange achieved the best return on trading and the best number of new investors for the year 2023, along with the stock exchanges of Jordan (Amman), Bahrain, and Abu Dhabi.” As the best stock exchange in ESG indicators and PE ratio.
Budget schedules postpone the House of Representatives' recess
The Parliamentary Finance Committee expects the general budget schedules for the year 2024 to arrive at the beginning of next May.
The tripartite budget tables need to be reviewed periodically every year, to adjust project costs and salary bills and include new projects. This means that the budget is past and does not need to be approved in full, since it was approved last year. The 2024 budget is at a standstill between the government and the House of Representatives, despite the approval of a tripartite budget for the first time in the country’s history, and despite the fact that the Ministry of Finance sent the tables more than a month ago to the Council of Ministers, at a time when the Parliamentary Finance Committee demanded that the government send the final accounts of the previous budgets.
The Finance Committee is awaiting the arrival of the budget schedules, according to a previous statement by its Chairman, Atwan Al-Atwani, to “correct the path of the budget by maximizing non-oil revenues, encouraging the private sector, and reducing operational spending,” while the House of Representatives decided to extend its legislative term, which will end next May 9, “until it is approved.” Budget tables.” Representative Kazem Al-Fayad told Al-Sabah: “We in the House of Representatives are waiting for the general budget that the government will send after approving its schedules,” and added, “The schedules were supposed to arrive no later than the second month of the current year.”
more detailed version
The Parliamentary Finance Committee expects the general budget schedules for the year 2024 to arrive at the beginning of next May.
The tripartite budget tables need to be reviewed periodically every year, to adjust project costs and salary bills and include new projects. This means that the budget is in progress and does not need to be approved in full, since it was approved last year.”
The 2024 budget is at a standstill between the government and the House of Representatives, despite the approval of a tripartite budget for the first time in the country’s history, and despite the fact that the Ministry of Finance sent the tables more than a month ago to the Council of Ministers, at a time when the Parliamentary Finance Committee demanded that the government send the final accounts of the previous budgets.
The Finance Committee is awaiting the arrival of the budget schedules, according to a previous statement by its Chairman, Atwan Al-Atwani, to “correct the path of the budget by maximizing non-oil revenues, encouraging the private sector, and reducing operational spending,” while the House of Representatives decided to extend its legislative term, which will end next May 9, “until it is approved.” Budget tables.
The bylaws of the House of Representatives stipulate that the legislative recess be postponed and that the House be considered permanently in session upon the arrival of the general budget, because its approval is one of the most important duties of the House, if not the most important.
Representative Kazem Al-Fayad told Al-Sabah: “We in the House of Representatives are waiting for the general budget that the government will send after approving its schedules,” and added, “The schedules were supposed to arrive no later than the second month of the current year.”
He warned that "the delay has political and economic aspects," and pointed out that "the budget's mission is primarily to finance employee salaries, which is a much easier topic than the final accounts."
According to observers, the approval of a tripartite budget for the first time in the country’s history is considered a positive thing that distances it from political pressures and partisan bargaining, and this means that the wheels of the state will turn for three years without obstacles.
Meanwhile, the Finance Committee in the House of Representatives called on the government to send the final accounts of previous budgets because they require a vote from Parliament.
Member of the House of Representatives, Jamal Cougar, said in an interview with “Al-Sabah”: “The government is supposed to hand over the final accounts to the House of Representatives year by year, and the government is supposed to find a solution to this issue, especially since the final accounts from 2014 until now are not available, and at that time the government was It is going through the crisis of the terrorist ISIS invasion and the schedule was not sent at the time, but we do not know the reason for not sending the schedule (in light of the stable conditions).”
He added, "The final accounts must be voted on in Parliament, and the Finance Committee requested them, but the government did not send them, and we do not know the reasons for the delay."
Regarding this year’s budget schedules, Koger stated, “The government pledged to send it, but we expect it to be delayed, and Parliament intends to extend its recess in order to approve the budget.”
Iran offers 200 new investment packages and confirms: The positive trade balance has reached $14.5 billion
The Secretary of the Supreme Council of Free and Special Economic Zones in Iran reviewed 200 investment packages worth 207 trillion tomans, and said that the trade balance of the free and special economic zones is about 14.5 billion dollars positive and we only had $3.5 billion in imports.
ISNA news agency reported that Hajjat Abdul Maliki said at the ceremony “reviewing investment packages and honoring major investors and exporters” held today at Expo Iran 2024: Today we unveiled 200 investment packages worth 207 trillion tomans, and thus our investment packages in the free economic zones reached The private sector, which we started last year, has grown to 1,200 packages worth more than 1,100 trillion tomans.
The Iranian official confirmed that these packages will reach 2,000 packages by March 20, 2025 (the beginning of the next Iranian year), and said: There are different packages with several investment sizes, starting from several billion and reaching several trillion tomans, and in different sectors, such as the food industry, the clothing industry, and information technology. Tourism, automobiles, chemical and petrochemical industries, and in all regions of the country, there are different packages and there is complete diversity in terms of the size of capital and geography, and we have investment packages for all fields.
He continued: In the past two years, free and special economic zones have become an alternative destination for capital flows out of the country. Many people who decided to take their capital out of the country are today turning to the free zone and learning about the advantages of investing here. Moreover, investment demand in these regions increased last year by 4.2 times compared to the previous year. The projects that began construction last year were 7.5 times what they were the previous year.
Regarding export statistics from free zones, the Secretary of the Supreme Council for Free and Special Economic Zones stated: We are now in the process of preparing economic statistics, but the bottom line is, from the total free and private economic zones, we exported about 18 billion dollars in 2022 and almost no change in 2023. .
He continued: We plan to see a jump in exports in 2024 through two approaches, firstly diversifying export products and secondly moving towards exports with higher added value and technology.
Where is the budget, Ministry of Finance?
Here we are in the fifth month and we are approaching the middle of the year, and the ministries and departments are still restricted in spending and the rights of employees are postponed because the esteemed Ministry of Finance puts the budget under the pillow. It seems that Finance knows my grandfather and took the idea from him, as he used to put the wallet under the pillow and sleep on it.
Woe to anyone who approaches it, and we can only wait for his gifts. The employee performs his duty to the fullest extent throughout the year, and when he asks for his right to a promotion or financial entitlement, he hears the well-known answer: the budget has not yet arrived. We know that the budget is approved in order for the ministries to act and spend according to their needs, especially since it was approved for three consecutive years, but it seems that the Ministry of Finance is a state and a scholar and does not care about the poor employee who is waiting for a promotion and bonus and counts the days and hours for her in light of the difficult economic situation.
We are almost the only country in which the employee is running after his promotion to increase his salary a little, and despite that, the journey has not begun yet because the Ministry of Finance is in a good mood and does not want to disturb its peace of mind with the employees’ requests for fear of the people’s money. They said in the past, “The full do not know the hungry,” and we can only help. To say, release the budget and let the people recover .
Sudanese opens Iraq's doors to major international companies
Prime Minister Muhammad Shiaa Al-Sudani expressed Iraq’s aspiration to cooperate with major international companies in the field of technology and information technology to move to the digital economy and improve the direction of investments. He also expressed the Iraqi government’s desire to cooperate with technology companies and benefit from them in developing the agricultural sector. In Iraq, indicating that agriculture is a priority in the government program.
This came during Al-Sudani’s reception, yesterday, Sunday, of a group of heads of major international companies in the Saudi capital, Riyadh, on the sidelines of his participation in the World Economic Forum.
In the Saudi capital, Riyadh, the Prime Minister met with the Crown Prince of the Kingdom of Saudi Arabia, His Highness Prince Mohammed bin Salman bin Abdulaziz Al Saud.
During the meeting, they discussed bilateral relations between the two countries, the importance of consolidating them, and reviewed the files of joint cooperation and its growth within the work of the Iraqi-Saudi Coordination Council, which resulted in several understandings in various fields.
Al-Sudani expressed Iraq's aspiration for broader economic cooperation with the Kingdom, which contributes to enhancing growth and provides new opportunities in various economic fields, which reflects the interests of the two brotherly countries and the prosperity of their people.
For his part, the Saudi Crown Prince welcomed the Prime Minister and expressed his thanks for accepting the invitation and participating in the World Economic Forum, stressing Saudi Arabia’s keenness to achieve the best relations with Iraq and raise the level of mutual cooperation between the two neighboring countries.
The meeting touched on the situation in Gaza, and the killing and starvation that the Palestinian people are witnessing at the hands of the occupation forces, and stressed the need to make great efforts to stop the war, the effects of which were reflected in regional and international stability.
Prime Minister Muhammad Shiaa Al-Sudani also met, in the Saudi capital, Riyadh, with the Emir of the State of Kuwait, Sheikh Meshaal Al-Ahmad Al-Jaber Al-Sabah.
During the meeting, bilateral relations between the two countries were discussed, and ways to develop and advance them, for the benefit of the two brotherly peoples, by investing in the historical and social neighborhood that links Iraq and Kuwait, and emphasizing the importance of maintaining good-neighborly relations and mutual respect.
The meeting discussed the latest developments in the region, especially what is happening in the Gaza Strip in terms of the ongoing Zionist aggression that has caused thousands of martyrs and wounded, and the importance of taking a unified Arab position in order to end the tragedies of the Palestinian people.
Al-Sudani also received, at his residence in the Saudi capital, Riyadh, the regional president of the technology company. German SAP Emmanuel Raptopoulos and his accompanying delegation, on the sidelines of his participation in the World Economic Forum.
The meeting witnessed a discussion of ways of cooperation with SAP, which reviewed its experiences in various parts of the world, as it is considered the largest in the world in the field of developing large programs that combine visions.
Al-Sudani stressed the possibility of cooperating with the company through a joint work program, which includes benefiting from its services in digitizing the economy, which will help achieve innovation and improve the direction of investments, indicating the government’s aspiration to also benefit from its services by including this type of software in Curricula of specialized colleges, and in the field of training in the field of institutional software.
For his part, Raptopoulos expressed the company's readiness to cooperate with the Iraqi government in the technological fields, which helps it implement its vision and plans towards an economy that keeps pace with technological developments in the world.
Baghdad and Erbil meeting.. A former Kurdish MP announces the date of launching Nissan salaries
Today, Sunday (April 28, 2024), former member of the Kurdistan Regional Parliament, Sabah Hassan, confirmed that a meeting was held between a delegation from the Ministry of Finance in the region and the Federal Finance Ministry, while indicating the date of launching the salaries of the current month of April.
Hassan said in an interview with "Baghdad Today", "The process of sending the salaries of the region's employees is a judicial decision, and there is an agreement between the two governments in the region and the center, and there is no obstacle to sending the salaries."
He added, "The Regional Ministry of Finance sent the salary lists, and there is a meeting today between a delegation from the Regional Government and the Federal Finance, and the salaries for the month of April will be released."
Hassan explained, “After releasing the amounts, the regional government, specifically the Ministry of Finance, will prepare a schedule through which salaries will be disbursed within a short period,” pointing out that “it is expected that the salaries of the region’s employees will be released today or tomorrow, Monday at the latest, after completing the full audit.” ".
On (April 26, 2024), an informed source reported that a Kurdish delegation representing the Kurdistan Regional Government would visit Baghdad next week, while indicating that the delegation would hold a meeting with the Minister of Finance of the Federal Government, Taif Sami .
The source said in an interview with "Baghdad Today", "A delegation from the Ministry of Finance of the Kurdistan Regional Government will visit the capital, Baghdad, on Sunday or Monday of next week," noting that "the delegation will hold a meeting with the Federal Minister of Finance, Taif Sami . "
He explained, "The delegation will be headed by Finance Minister Awat Sheikh Janab," noting that "it will discuss the salary localization file and explain to officials the details of an accounting project and the possibility of opening branches of the three federal banks in the region for the purpose of starting the localization process . "
It is noteworthy that the former Kurdish MP, Ghaleb Muhammad, criticized the Erbil government on Monday (March 18, 2024), while noting that it is stubborn and defies the Federal Court’s decision regarding the localization of the salaries of the region’s employees .
Muhammad said in an interview with "Baghdad Today", "The Federal Court's decision was clear and clear and does not need explanation. Therefore, the localization of salaries must begin, and it does not require time, as is their argument . "
He added, "Delaying the disbursement of salaries, despite the sums being sent by Baghdad, must be faced with deterrent measures," noting that "the attempt to be stubborn and refuse to implement the federal decision must have legal consequences . "
He pointed out that "issuing a MasterCard affiliated with Al-Rafidain or Al-Rashid Banks does not take more than a few days or a week at most," noting that "the resettlement procedures will not take time, but the parties in power want their corruption and theft to continue."
Barzani is in Baghdad to mobilize against the factions.. The Kormor attack cracks the head of the center
Officials in the Kurdistan Regional Government accused armed factions affiliated with the Popular Mobilization Forces of being behind the targeting of the Kormor gas field last Friday evening, which left four people dead and extensive material losses in the field located between the governorates of Erbil and Sulaymaniyah, which is responsible for supplying many power stations in the region. Northern Iraq, according to what was revealed by Iraqi political sources in the capital, Baghdad, on Monday.
Yesterday, Sunday, Iraqi Prime Minister Muhammad Shia al-Sudani pledged to pursue those involved in the attack, after the government issued a statement announcing the start of an investigation into the attack that was carried out with explosive drones. Today, Monday, informed sources in Baghdad revealed that the President of the Kurdistan Region, Nechirvan Barzani, provided information to the Baghdad government, including details of the attack and the location of the launch of the drone that left four dead, all of them of Yemeni nationality, working in the field.
A prominent political source in Baghdad stated that the President of the Kurdistan Region, Nechirvan Barzani, during the meeting of the State Administration Coalition, which Al-Sudani attended, last Saturday evening, clearly accused armed factions affiliated with the Popular Mobilization Forces of being behind the operation to target the Kormor gas field, and provided information confirming this accusation. In an interview with Al-Araby Al-Jadeed, the source added, requesting anonymity, that “Barzani’s accusation was directed mainly towards an armed faction supported by Iran of being behind the attack, which led to a dispute and controversy with some of the leaders of the coordination framework, which led to the dissolution of the attack.” The meeting did not reach any results regarding the political issues for which the meeting was held.”
The past two days witnessed the issuance of various international condemnations of the attack that targeted the field, as the United States, the European Union, and Britain demanded an investigation into the attack on the field, which has been managed by the UAE company “Dana Gas” for several years.
In this context, a member of the ruling Kurdistan Democratic Party in the Kurdistan region, Wafa Muhammad Karim, hinted that there were political reasons behind the attack.
Karim said, “The country that benefits from the bombing of the Kormor gas field is the one that sells gas to Iraq for billions of dollars annually,” in reference to Iran, indicating that “work and development in this important field is considered against that country’s economic interests, especially this strategic field that can work on Iraq will be satisfied with gas during the next few years, and this means that Iraq will not need Iranian gas in the future.”
Karim stated that “the armed factions with a well-known foreign agenda were the ones that carried out the targeting of the Kormor gas field, and we have all the information about those factions, and from which region the targeting took place, especially since the targeting of this field by those factions is not the first, but rather it occurred.” "Previously several times."
He added that Barzani presented, during his meetings in Baghdad, all the information and details that the region possessed about the factions involved in this attack and previous attacks as well, and he informed Al-Sudani and the leaders of the coordination framework of the need to bear responsibility in deterring these factions, otherwise there will be security and political repercussions at the internal and external levels, according to what he said. .
He stressed that "despite providing all information and evidence to the government, as well as the political forces in Baghdad, regarding the factions involved in this attack and the objectives of this attack, we do not expect that there will be a government ability to uncover these parties and hold them accountable, and the investigation will remain, like previous investigations, without any results. The factions outside the state are still stronger than the state’s weapons, and control important and sensitive areas in various Iraqi cities,” he said.
Parliamentary Finance holds the government responsible for stopping spending in the ministries
Member of the Parliamentary Finance Committee, Mustafa Al-Karaawi, held, on Monday, the Iraqi government responsible for the delay in sending the schedules of the federal budget law to the House of Representatives, and for not opening the doors to financial disbursement in ministries and state institutions.
Al-Karaawi told Shafaq News Agency, “The government was very late in sending the budget law schedules to the House of Representatives, which caused a delay in launching the disbursement doors for ministries and state institutions.”
He pointed out that "the government had previously set many dates for sending the budget to the House of Representatives, but it did not send the budget law schedules, and therefore the government bears responsibility."
Earlier, a member of the Finance Committee, Moeen Al-Kadhimi, confirmed that the reason for the delay in sending the country’s general budget to the House of Representatives is due to the requirements of ministries and unrelated entities, the operational and investment budgets, and the increase in financial allocations for the salaries of employees and retirees, the social protection network, and the ration card, all led to changing the schedules of the budget law.
According to the Parliamentary Finance Committee, “The general budget for the year 2024 amounted to 228 trillion dinars after increasing operational and investment expenditures, and the expected financial deficit is 80 trillion dinars, after the budget in 2023 amounted to 199 trillion dinars.”
At the end of last February, the Parliamentary Finance Committee announced that the Ministry of Finance had completed the schedules for preparing the 2024 budget, and said that the Council of Ministers would approve it last March to be sent to Parliament after that, but it has not been approved yet.
Rentierism" hits Iraq's economy despite trillions of revenues
The Federal Ministry of Finance revealed, on Monday, that the volume of Iraqi revenues in the budget exceeded 20 trillion dinars within two months, while confirming that the oil contribution to the budget had risen to 91%.
Shafaq News Agency followed the data and tables issued by the Ministry of Finance in April for the January and February accounts of the current fiscal year, which showed that oil is still the main resource for Iraq’s general budget, reaching 91%, which indicates that the rentier economy is the basis of the country’s general budget. .
The financial tables showed that the total revenues in January and February amounted to 20 trillion, 465 billion, 480 million, 278 thousand and 344 dinars. They also indicated that the total expenditures with advances amounted to two trillion, 752 billion, 731 million and 419 thousand dinars.
According to the financial tables, oil revenues amounted to 18 trillion, 678 billion, 903 million, and 892 thousand dinars, which constitute 91% of the general budget, while non-oil revenues amounted to 1 trillion, 786 billion, 576 million, and 385 thousand dinars.
In this regard, economic expert Muhammad Al-Hassani told Shafaq News Agency, “Iraq cannot get out of the cycle of rentier economy due to the lack of infrastructure for the industrial and agricultural economic sectors and the absence of a real investor,” adding that “the surplus funds in the general budget are not directed towards... Investment, but rather towards expenditure.
The Prime Minister’s Advisor for Financial Affairs, Mazhar Muhammad Salih, confirmed in March 2021, in an interview with Shafaq News Agency, that the reasons for the economy remaining rentier are due to wars and the imposition of the economic blockade on Iraq during the past era and the political conflicts we are witnessing today, which led to the dispersion of... for economic resources.
The Iraqi state’s continued reliance on oil as the sole source of the general budget puts Iraq at risk from the global crises that occur from time to time because oil is affected by them, which makes the country tend every time to cover the deficit through borrowing from abroad or within, and thus indicates the inability to Managing state funds effectively, and the inability to find alternative financing solutions.
A specialist identifies the reasons for the decline in the value of the dollar against the Iraqi dinar
The official spokesman for the currency market in Sulaymaniyah, Jabbar Gorran, revealed today, Monday, the reasons for the decline in the value of the US dollar against the Iraqi dinar, pointing to the importance of the visit of Iraqi Prime Minister Muhammad Shiaa Al-Sudani to the American capital, Washington.
Kuran told Shafaq News Agency, "The main reason for the decline in the value of the dollar against the dinar is the impact of the Sudanese visit to Washington, which led to an increase in American support for the Iraqi economy, and the optimism of the American parties regarding infrastructure and government reforms in the banking system in Iraq."
He added, "The dollar has declined against the dinar in recent days due to a number of factors, the most important of which is the use of smart cards that enable business account holders to withdraw dollars abroad, which is a good reason for the decline in the value of the dollar."
According to Kuran, the other reason for the decline in the value of the dollar against the dinar is the visit of Turkish President Recep Tayyip Erdogan to Baghdad, which resulted in several agreements on a number of issues, including that trade exchange be in the Iraqi dinar and the Turkish lira, indicating that the volume of trade exchange between Iraq and Turkey ranges Between 20 and 24 billion dollars annually, and dealing in the dinar and the Turkish lira will reduce the demand for the dollar.
He stated that "all dealings with countries previously were in US dollars, but according to recent agreements, Iraq will be allowed to use other currencies in its transactions. In recent days, a delegation from the Central Bank of Iraq visited Saudi Arabia and it was agreed that future exchange would be in the currency that is dealt with in that country." ".
Kuran pointed out, "Previously, when citizens received their salaries, they converted part of their salaries into dollars to pay off housing or car loans or any other money owed to them, but now most of these transactions have been converted into the local currency, so people do not need dollars." .
He pointed out, "It is unlikely that the dollar will fall below 1,400 dinars per dollar because it is too early and the central bank has reached its goal, but it may reach 1,420 dinars per dollar."
Shafaq News Agency correspondent reported this morning that dollar prices declined with the opening of the main Al-Kifah and Al-Harithiya stock exchanges in Baghdad, recording 144,750 Iraqi dinars for every 100 dollars, while yesterday, Sunday, dollar prices recorded 145,700 Iraqi dinars for every 100 dollars.
Our correspondent indicated that the selling prices in the exchange shops in the local markets in Baghdad decreased, as the selling price reached 145,750 dinars, while the purchasing price reached 143,750 dinars for every 100 dollars.
In Erbil, the dollar also recorded a decline in banking shops, where the selling price reached 145,200 dinars against the dollar, and the purchase price reached 145,100 dinars against 100 dollars.
Iraqi Business: There are no financial fears in Iraq for three years, and fear regarding the development path is unjustified
Abdel Zayer said, during his hosting of the program {Free Speech} broadcast on Al-Furat satellite channel this evening, that: “
Iraq is at the forefront of the first stages in the fourth place in terms of growth among the Arab countries. It indicates that Iraq has increased its revenues from oil exports and there are figures for development, which is an indicator that Iraq is in a stage of growth.” Higher than neighboring Arab countries, and it is reflected in the financial performance of development investments.
- The government’s management of investing money in the right place, which is positive and has real meanings and implications. - Development and infrastructure projects and the Al-Faw port
. I indicated that Iraq is in a higher stage of growth than neighboring Arab countries
Energy during the previous six-month season maintained its level and is expected to stabilize until the end of this year - Expectations for a decline in oil prices will not exceed 5%, and this will not affect Iraq’s revenues, and there are no financial concerns for the next 3
years over the life of the budget
Overcoming the consequences of the sharp decline in energy prices.
External borrowing comes to complete projects parallel to repaying loans, and delaying the disbursement process confuses part of the development scene, especially with regard to development project receivables.
-Oil is exposed to the political situation at the regional level, in addition to supply and demand, as well as the winter and summer seasons.
-Iraq was operating a primitive banking system until 2023, when the government worked with the Central Bank of Iraq to implement external transfers through the electronic platform and ended the issue of manipulation of the exchange rate.
-The improvement in the price of the Iraqi dinar will eliminate the parallel market.
Gold is considered a safe haven for investment in the world in anticipation of the collapse of any approved global currency and its rise as a result of a political crisis at the world level, which affected everyone and now it has begun to decline in small percentages and is considered the ideal solution for investment.
- Real estate in Iraq usually rises at the interest rate approved by loans and is dependent on monetary policy.
The development road will add economic value to the country on an economic, political and geographical basis and will be the optimal regional road for international trade. Any justification for challenging this project is unjustified and some people’s fear of it has no realistic value.
-The Ministry of Oil has not been serious since 2013 in investing in natural gas through licensing contracts.
Al-Sudani receives Nechirvan Barzani
On Saturday, Barzani began a visit to Baghdad, during which he met with senior state officials, party leaders, and prominent political figures, to discuss several files related to the Kurdistan region, Iraq, and the region.
Barzani's visit to Baghdad is his second during the month of April, after the first that took place on the fifth of this month.
The spokesman for the regional presidency, Ladshad Shehab, announced that Barzani’s meetings in Baghdad will continue today, noting that his discussions focus on “solving the issues of salaries and elections.”
Parliamentary Finance: The positive results of Sudanese’s visit to Washington will appear soon
The Parliamentary Finance Committee confirmed today, Monday (April 29, 2024), that the positive results of the Prime Minister’s visit to Washington will appear soon.
Committee member Moeen Al-Kazemi told “Baghdad Today” that “the visit of Prime Minister Muhammad Shia Al-Sudani to the United States of America achieved great and important success at the level of various economic and investment files, and these results will soon appear on the ground, especially with regard to the strength of the Iraqi economy.” And the dollar file and its complete control.”
Al-Kadhimi stated, “The government has made great progress in controlling the dollar and preventing any manipulation of the currency in the local market by some merchants and others. This is why we see a noticeable decline in the exchange rate in the parallel market, and the coming days will witness a greater decline, as well as the implementation of the economic agreements with Washington.” "It takes time."
The dollar exchange rates are still high and decline from time to time, while observers expect Iraq to witness greater development in the economic sector in various related fields, in addition to the energy sector, with the Sudanese visit focusing on creating a shift in the relationship between the two countries and not being limited to the security aspect. Especially with the Sudanese signing 18 memorandums of understanding during his visit to Washington 10 days ago.
The Trade Bank of Iraq decides to stop collecting commissions for five banking services
Today, Monday, the Trade Bank of Iraq decided to stop collecting commissions for five banking services.
The bank’s media advisor, Aqeel Al-Shuwaili, told the Iraqi News Agency (INA): “With the start of the Financial Inclusion Week activities and to encourage savings, the management of the Trade Bank of Iraq ( TBI ) decided to stop collecting banking commissions for the services described below, as follows:
1- Stop charging the commission for opening current accounts (free).
2- Stop charging the commission for opening savings accounts (free).
3- Stop charging the commission for opening deposit accounts (free).
4- Stop collecting the commission for issuing an electronic Visa Classic card (free).
5- Stop collecting the commission for issuing a golden Visa electronic card (free).
Parliament is conditioning the extension of its legislative term on the arrival of the budget schedules
Representative Sarwa Muhammad Rashid confirmed today, Monday, that extending the legislative term of Parliament depends on the arrival of the budget schedules.
Rasheed said in an interview with Al Rabaa, “According to the tripartite budget law, the budget schedules were supposed to be sent before the end of last year, but the government has not sent them yet and we hope to send them before the end of the current legislative term.”
She added, "If the budget schedules arrive, the legislative term will be extended until they are approved in accordance with the bylaws."
She pointed out, “The schedules include current and operational schedules, salaries or employee compensation, the investment budget, and regional development according to the government’s directions within the framework of its ministerial curriculum.”...
Without knowing the losses... Turkish bombing targets "labor" sites in Kurdistan
On Monday, Turkish warplanes bombed positions belonging to the Kurdistan Workers’ Party in Dohuk Governorate in the Kurdistan Region.
A security source told Shafaq News Agency, "The planes carried out air strikes on sites belonging to Kurdistan Workers' Party militants in the (Mateen) mountain range overlooking the Amadiya district, north of Dohuk."
The source added, "The bombing targeted areas near the villages of Koharzi and Balafah twice in succession, without knowing the losses resulting from the raid."
Optimism to attract more customers to the field of banking operations
The Financial Inclusion Week activities were launched in cooperation between the Central Bank, the Association of Private Banks, and a number of financial and banking institutions. Executive Director of the Association of Private Banks, Ali Tariq, told Al-Sabah: The Central Bank and the Association of Banks have been working for a long time to launch Financial Inclusion Week throughout the country, as it continues for a week, and its activities are implemented in commercial centers, universities and other institutions, in coordination with the Arab Monetary Fund. And his supervision.
He added that financial inclusion aims to reach all segments of society and seek to integrate them in order to obtain banking services such as credit, deposits, and others.
He explained that there is a significant growth in the rate of financial inclusion, and this is due to the efforts of the government and the banking sector, as well as the launch of the Central Bank’s inclusion strategy.
Tariq continued that inclusion contributes to reducing poverty and creating new job opportunities by enabling individuals to start their projects, and this reflects positively on enhancing economic stability as well as supporting small and medium-sized companies, in addition to the fact that inclusion also focuses on women and attempts to improve their economic conditions by empowering them.
During Financial Inclusion Week, banks, electronic payment companies, and financial companies provide free bank account and prepaid card opening services, in addition to answering inquiries about other services such as loans, deposits, financial transfers, and others.
In turn, international financial inclusion expert Professor Sadiq Al-Shammari told Al-Sabah: Financial inclusion represents an important dimension in the comprehensive and sustainable development strategy because of its impact on improving growth opportunities and financial and social stability.
He added that banking mechanisms and the advantages resulting from the use of electronic payment methods closely linked to banking will help expand the phenomenon of financial inclusion to become double what it is today, indicating that the number of banking operations will increase at acceptable rates commensurate with the targeted plans in this regard.
As for the advisor to the International Smart Card Company, Ghazi Al-Kinani, he told “Al-Sabah”: Electronic payment companies and private and government banks, in cooperation with the Central Bank, have made great efforts to interact citizens with banking products and enhance trust between the two parties.
Financial inclusion means disseminating financial and banking products and services at reasonable costs to the largest segment of society, institutions, and individuals, especially low-income segments, in contrast to financial exclusion, which excludes these segments.
The Central Bank sponsors the launch of the activities of the Arab Financial Inclusion Week in Iraq
The activities of the Arab Financial Inclusion Week were launched in Iraq, from April 27 to May 2, in cooperation with the Association of Private Banks, under the slogan “Encouraging savings to enhance financial inclusion.”
The activities of the Arab Financial Inclusion Week, which include various governorates, aim to spread banking awareness, protect the public, and provide the best banking services to the public.
It is noteworthy that the activities of the Financial Inclusion Week reflect the continuing efforts of the Central Bank of Iraq to enhance financial inclusion in Iraq.Central Bank of Iraq
Information Office
29 - April - 2024
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