Salmaniya Currency Market: Rumors behind dollar fluctuations... we expect it to decline this week
The spokesman for the dollar market in Sulaymaniyah, Jabbar Goran, confirmed on Saturday that the fluctuation in the value of the Iraqi dinar against the dollar during the past few days was a result of the circulation of incorrect rumors, while he expected the exchange rate of the dinar to improve during the current week.
The video for this My FX Buddies Blog post is below here:
Goran told Shafaq News Agency that "the instability in the exchange rate of the dinar against the dollar was due to the spread of some inaccurate rumors, but the Central Bank of Iraq denied all the news circulating about making any change in the exchange rate of the dinar."
He added that “discussions between the Kurdistan Regional Government and the Federal Government regarding the implementation of the (ASYCUDA) system are still ongoing, and a draft agreement on the system was signed earlier,” indicating that “the full implementation of the system at border crossings would positively impact the stability of the dinar exchange rate.”
Goran noted that "expectations indicate an improvement in the value of the Iraqi dinar against the dollar during this week, in light of the continued measures aimed at regulating trade and financial transfers."
Over the past few days, the exchange rate has risen sharply in Iraq as a result of the local market being affected by media reports and speculations indicating the federal government’s intention to adjust the official exchange rate from 132,000 to 160,000 per 100 dollars in order to cover the deficit and finance monthly salaries, against the backdrop of financial pressures resulting from regional tensions and the impact on energy supply chains.
In response to market concerns, the Central Bank of Iraq quickly refuted these reports, affirming in a statement its firm commitment to maintaining the stability of the exchange rate and meeting the legitimate demand for foreign currency, categorically denying any intention to adjust the current rate given the strength of foreign reserves.
The Central Bank of Iraq explained that its reform efforts have reached their final stages to gradually reintegrate banks that were prohibited from dealing in dollars into the external transfer system after they met international standards and anti-money laundering requirements, in conjunction with raising the ceilings for electronic payment cards for companies and businesses to support financial inclusion, stressing that the management of the cash file is done in full compliance with the global financial system.
Despite official assurances, local markets are showing cautious behavior, reflected in the slowing pace of the dollar's decline; an indication that restoring full confidence in daily transactions requires a longer timeframe to overcome the effects of speculation and rumors that have disrupted supply and demand.
Al-Zaydi sets a date for filling ministerial vacancies
Prime Minister Ali Faleh al-Zaidi has set a date for filling the vacancies in the government formation.
Prime Minister Ali Faleh al-Zaidi told Sky News, according to a statement issued by his media office and received by Al-Sa’a Network, that “our visit to Washington is not a mere protocol visit, but rather represents a declaration of a new phase of partnership between Iraq and the United States, based on common interests and mutual respect. In September, the international coalition forces will end their combat mission against ISIS and leave Iraq permanently.” He added, “We look forward in the next phase to the American presence being through economic, investment, and development partnerships.”
He pointed out that "we want to move from the stage of military partnership to a sustainable economic partnership, and build an effective economic bridge between Iraq and the United States that achieves the interests of both peoples. We have directed the Ministries of Oil, Electricity and Communications to give priority to reputable American companies in the fields of energy, communications, technology and development," indicating that "the Ministerial Council for the Economy has taken important decisions related to major oil projects with international companies, including Chevron, Halliburton and HKN, in addition to giving them opportunities to work in new fields and exploration blocks."
He continued, “The telecommunications sector is moving towards a strategic partnership with Starlink, which will enhance the digital infrastructure in Iraq. We will discuss with the American side the Energy and Development Fund project, which will start from 500,000 barrels per day up to two million barrels per day, according to economic and production conditions, and perhaps outside the constraints of OPEC quotas.” He added, “Accounts will be opened for the fund in reputable American banking institutions, and its resources will be used in agreements with American companies, including electricity and infrastructure projects.”
He added that "the fund's financing could reach, over three decades, about $400 billion, with gradual growth linked to the performance of the projects and companies implementing them. Our goal is to rebuild the infrastructure that was damaged by investing these resources in development projects, and we are working to obtain a fair share for Iraq in oil production within OPEC in line with its capabilities."
He explained that "the current reality of Iraq is the result of accumulations that have extended over many decades. Since 1980, the country has entered a phase of great depletion, and huge resources have gone towards wars instead of construction and development."
He added that “because of the war of the 1980s, reconstruction projects stopped, infrastructure deteriorated, and Iraq was exposed to widespread destruction that affected infrastructure and the social system. It emerged from the war with losses, high debt, and economic decline. During the embargo period in the 1990s, Iraqi society was exposed to a deep humanitarian and economic crisis that affected various sectors.” He emphasized that “after 2003, Iraq faced the challenge of terrorism, and many Iraqi talents left the country.”
He pointed out that “Iraqis confronted ISIS in defense of their homeland, and at the same time they were fighting a battle to protect the security of the region and the world, with the support of the United States and friendly countries. Iraq was the first line of defense against terrorism, and the war against ISIS left behind great damage to infrastructure and huge economic losses,” indicating that “the United States is a strategic partner in Iraq’s development and economic plans.”
He pointed out that "the Arab Gulf states represent a historical, cultural and social depth for Iraq, and they are an element of strength. We believe in a policy of balance and openness with everyone. A strong state needs decisive decisions, and decisiveness is an essential part of a statesman's responsibility. Not being attached to the position gives the official strength to face challenges, and we are continuing to work to achieve our goals."
He continued, saying: “We held an in-depth dialogue with the armed factions, and we emphasized that the state is the unifying framework, and the presence of weapons outside its institutions cannot be accepted. The role of the factions in confronting terrorism cannot be denied, but the current stage requires everyone to move to working through the state and its institutions.” He explained: “I called on everyone to preserve their history and not allow their sacrifices to be lost, because our goal is to build a state and not just run a government.”
He explained: “We are working on preparing for an international conference entitled (The Sovereignty Conference), which affirms that the decision of Iraq is in the hands of the Iraqis, with an Iraq free of foreign forces and any armed formations outside the framework of the state,” adding that “as a result of the regional crises, Iraqi oil exports have declined to limited levels, and we are working to restore full export capacities.”
He explained: “We aspire to raise Iraq’s oil production to seven million barrels per day over the next three years, and we have informed American companies of this vision,” stressing that “our relationship with the Islamic Republic of Iran is based on good neighborliness, respect, and common interests, just as our relationship is with all countries in the region.”
He stressed that “Iraq does not accept dictates from any party, and the decision will always be in accordance with the interest of Iraqis first and foremost. Our direction is towards building a strong economic partnership with the United States based on the interest of Iraq, and not at the expense of any other party,” noting that “we do not follow a policy of axes or hostility, and Iraq wants to be an area of communication and stability, not an arena of conflict.”
He noted that "Baghdad welcomes hosting any dialogue that contributes to calming the region, including talks between the United States and Iran. Investigations have not indicated any attacks launched from Iraqi territory towards Saudi Arabia, and we have issued clear directives to prevent any future transgressions."
He added, "Our goal is to protect Iraq and its people, and after September 30th, we will present to the citizens the results of the government's work and achievements, not promises. We look forward to completing the filling of vacancies in the government formation within two weeks," noting that "within the government's program, we are working to provide one million residential plots prepared for citizens."
He stressed that “there is an old economy that is trying to continue, and a modern economy that we are working to build. We are moving towards a productive and developed economy, and we are working to establish the Development Fund with the participation of the Central Bank of Iraq and national funds, while opening the door to public subscription and regional and international partnerships.” He pointed out that “the projects of the Development Fund will be financed according to the needs of the market, which will contribute to stimulating the economy and creating job opportunities.”
He explained: “We started confronting corruption through legal procedures, and we stopped a large part of the waste, and we recovered funds through official frameworks. Corruption in Iraq is a phenomenon that starts from small levels and extends through a system of bribery and favoritism, and addressing it requires comprehensive and continuous reform.” He emphasized that “we formed a central committee to review contracts that exceed 25 billion dinars in value, to audit them and ensure the integrity of their financial estimates, and to prevent exaggeration in estimated costs.”
He concluded that "the Cabinet approved referring a draft law to the House of Representatives to form a body for prior oversight and auditing in all ministries and state institutions, which will enhance transparency and governance procedures and raise the efficiency of public finance management."
Iraqiji will be in Baghdad tomorrow... What does his visit hold?
Iranian Foreign Minister Abbas Araqchi will arrive in Baghdad on Sunday at the head of a high-level diplomatic delegation, on an official visit aimed at discussing bilateral relations and regional developments, coinciding with the continuation of political and security consultations between the two countries.
The Iranian Foreign Ministry stated in a statement followed by (Al-Mada) that Araqchi will head to Iraq at the head of a high-level diplomatic delegation to conduct a series of meetings with senior Iraqi officials.
In the same context, Mukhtar al-Moussawi, a member of the Foreign Relations Committee in the House of Representatives, said in a statement followed by (al-Mada) that Araqchi’s visit comes at an important time, and will include talks with Iraqi officials on developing bilateral relations and strengthening political, security and economic coordination.
He added that the visit's agenda includes discussions on joint security issues, cooperation in combating terrorism and organized crime, strengthening border control and preventing smuggling and infiltration operations, as well as following up on the implementation of security agreements signed between Baghdad and Tehran.
Al-Moussawi indicated that regional developments would be at the forefront of the discussions, particularly efforts to reduce tensions and end the war permanently, stressing that Iraq continues its diplomatic efforts to support dialogue and bring viewpoints closer together in a way that contributes to strengthening security and stability in the region.
Maliki and the Iranian ambassador discuss bilateral relations and the latest developments in the region.
Baghdad/Al-Masalla: On Saturday, Nouri al-Maliki, head of the State of Law Coalition, received the Ambassador of the Islamic Republic of Iran to Iraq, Mohammad Kazem Al-Sadeq, to discuss bilateral relations and the latest political and security developments in the region.
The media office of Maliki stated in a statement received by Al-Masalla Agency that “the meeting discussed bilateral relations between Iraq and the Islamic Republic of Iran, and ways to enhance joint cooperation in a manner that serves the interests of the two neighboring peoples, as well as discussing the latest political and security developments in the region.”
According to the statement, Maliki stressed “the importance of continued communication and coordination between Iraq and its regional environment, and supporting everything that enhances Iraq’s security and stability and preserves its sovereignty and national interests.”
For his part, the Iranian ambassador affirmed his country’s keenness to develop relations with Iraq and enhance areas of cooperation and joint coordination between the two countries.
A government source has revealed a range of political, security, and economic issues that Iranian Foreign Minister Abbas Araghchi will address during his upcoming visit to Baghdad this Sunday—a visit expected to shape a new phase of understanding between the two countries amidst rapidly evolving regional dynamics.
The source stated that the issue of outstanding payments for Iranian gas would be at the forefront of the discussions; Araghchi is set to discuss mechanisms for settling the funds Baghdad owes, based on preliminary understandings reached between Tehran and Washington following their recent agreement. He will also address the matter of Iranian assets and funds frozen in various countries, including Iraq.
The source added that the visit would also cover sensitive security issues, most notably emphasizing the prevention of Iranian opposition groups using Iraqi territory to launch operations targeting Iran, alongside discussions on various shared security and political concerns. The source indicated that Araghchi would brief Iraqi leaders on the details of the understandings reached between Tehran and Washington, present new visions for restructuring bilateral relations, and discuss issues regarding the integration of factions into state institutions, as well as political and security developments in the Middle East.
In a related development, the Lebanese channel Al-Mayadeen reported that the visit would include a briefing on the results of the talks held in Switzerland, alongside discussions on arrangements for the funeral procession of the late Iranian Supreme Leader Ali Khamenei.
Iranian authorities had previously announced a six-day schedule for the funeral ceremonies, set for next July; the body is to be transported to Iraq on the eighth of the month for processions in the cities of Najaf and Karbala, before the ceremonies conclude in Iran.
International center: Iraq will be able to alleviate economic pressures
The International Trade Centre predicted that Iraq would gradually be able to alleviate some of the immediate economic pressures as conditions stabilize.
Eric Boschot, the center’s program director in Iraq, told Al-Sabah: “Iraq will be able to do this by restoring trade flows and stabilizing key supply chains, noting that supporting small and medium enterprises will be extremely important, given their pivotal role in providing job opportunities, boosting local production, and ensuring the continuity of business activity.”
He added that Iraq’s ability to withstand future shocks will depend on its ability to move beyond the current economic model, as strengthening non-oil sectors, supporting a more dynamic private sector, enabling small and medium enterprises to expand and integrate into regional and global value chains, and improving the trade and investment environment are all factors that would greatly enhance the economy’s resilience.
Bushot noted that continued progress towards integration into the international trading system, such as joining the World Trade Organization, could provide a stable framework to support reforms, enhance investor confidence, and expand market access. The current crisis could represent a turning point to advance these efforts and build a more balanced and resilient economy.
For his part, economist Mahmoud Dagher presented two solutions to mitigate the impact of the closure of the Strait of Hormuz: through various pipeline systems and by concluding agreements with neighboring countries.
Dagher told Al-Sabah: “Iraq’s problem in the trade sector is that it is integrated with the world and intertwined with the global economy through the import channel, which is diverse and amounts to $70 billion in some years. He pointed out that the problem is in the export channel, which is concentrated on one commodity, crude oil, the price and quantity of which it does not determine. After the war, it was added to the problem that it cannot export it because it does not have flexibility.”
He explained that the capacity or issue of exports is the obstacle, and if the situation continues in this manner, imports will also be hindered because covering them as a debit element is covered by exports as a permanent element.
Regarding Iraq’s position on joining the World Trade Organization, Dagher pointed out that Iraq will face a problem in its transition from observer to active member, which is that it is a net importer and therefore will be harmed and will not gain significant benefits compared to countries that export and import, because joining an international organization is important, but we must improve the timing and highlight the advantages and disadvantages, and in a country that imports, the disadvantages are more than the advantages.
He pointed out that diversifying the network of relations with the world is what helps to move forward in the issue of integration into the organization's membership.
Want to Support My FX Buddies?
ThanksSupport My FX Buddies
BuyMeACoffee CashApp:$tishwash
https://paypal.me/tishwash
.jpeg)
Choose your path... not everyone is required to fly.
In recent years, Iraq has witnessed a growing interest in entrepreneurship, with the proliferation of incubators, accelerators, training programs, and competitions that encourage young people to consider starting their own businesses instead of waiting for traditional employment. This shift undoubtedly represents a positive and important step towards a more diversified and vibrant economy.
But with this growing interest, I began to ask myself an important question: Should we treat all projects as if they were startups?
With the rise of entrepreneurship, some have formed the impression that economic success is solely linked to founding a startup capable of attracting investors and achieving rapid growth. While this image is appealing, it does not reflect the true state of the economy.
In all successful economies, startups represent only a small fraction of economic activity, while small and medium-sized enterprises (SMEs) remain the primary drivers of production, employment, and job creation. They operate factories, provide services, build supply chains, and ensure daily economic stability.
To simplify the concept, small and medium-sized enterprises (SMEs) can be likened to cars, and startups to airplanes. Cars are more numerous and widespread, playing a daily role in the economy, while airplanes remain fewer in number, more complex, and riskier, but are capable of reaching farther horizons when the right environment is available for them to take off.
This is the fundamental difference between a small or medium-sized enterprise and a startup. The former seeks to build a stable and profitable business within a clear market, while the latter seeks exceptional growth within a higher level of risk and uncertainty.
The problem is not with startups, but with the belief that all projects should turn into startups, or that all entrepreneurs should follow the same path.
The Iraqi economy today does not suffer from a lack of ideas as much as it suffers from a lack of viable companies.
With the spread of artificial intelligence tools, ideas and business plans have become available to almost everyone, but the real challenge is no longer in the idea itself, but in understanding the market, being able to implement it, reaching customers, and continuing to compete.
This distinction should also be reflected in financing and support policies. Small and medium-sized enterprises (SMEs) need loans, facilities, and banking solutions that help them grow and stabilize, while startups need angel investors and venture capital funds that accept higher levels of risk.
Therefore, the real challenge is not just to increase the number of startups, but to build a balanced economic system that gives each project the tools that suit it.
Iraq needs innovative and competitive startups, but it also needs thousands of small and medium-sized enterprises that drive the real economy, create jobs, and support economic stability.
Ultimately, the strength of economies is not measured by the number of ideas that are put forward, nor by the number of companies that are launched, but by the number of companies that survive, grow, and create real value for society.
Economic success is not achieved when we try to make everyone fly, but when we help each project succeed in the way that suits it.
Calls for a mutually beneficial economic partnership with Washington
In light of what the Prime Minister has put forward regarding moving towards economic cooperation with the United States of America, economic experts explained that Iraq seeks to invest in the Strategic Framework Agreement with the United States to reduce total dependence on oil revenues, as the visit of the Prime Minister, Ali al-Zaidi, to Washington falls within the efforts to strengthen economic relations and transform them “from military to economic partnership.”
The necessity of partnership
In this regard, international economic expert Dr. Nabil Al-Abadi explained that the economic partnership with America must be economically viable and stem from genuine integration between the two countries, as Iraq possesses the resources and the United States possesses the technology.
Capital and expertise.
Al-Abadi added, in an interview with Al-Sabah, that Iraq, which suffers from a fragile rentier economy and structural inflation, therefore partnership is not a strategic option but a necessity for restructuring it, provided that we read it with the logic of mutual gain and not dependency, pointing out that the benefits are not in loans, but in technology transfer, as America has an energy revolution (associated and shale gas) and water management and smart agriculture technologies, and Iraq needs a technical partnership, not a financial one, that moves it from importing technology to localizing it. Likewise, restructuring the Iraqi banking sector according to FATF standards should not be seen as guardianship, but as a gateway to integration into the global financial system, which will attract non-oil investments.
Partnership pillars
He believed that the partnership should be based on three pillars. The first is that there should be no contract without a binding timetable for completion, and no project without an Iraqi employment rate of no less than 60%. The second pillar is oil for expertise, not oil for debt, meaning we do not accept loans that drain liquidity, but rather partnerships in the field of renewable energy and infrastructure in exchange for facilities for American companies, to balance the trade balance. He added that the third and final pillar is that there should be no signing of comprehensive agreements in haste, but rather the partnership should be sectoral (energy, health, education) and decomposable, so that we are not held hostage to a single file.
The international economist warned against treating this partnership as a "political project," explaining that if the "Deal of the Century" remains merely a declaration of intent, we will lose a golden opportunity. The American market is the largest in the world, but it is unforgiving. We must raise our ambitions from simply being oil suppliers to becoming partners in supply chains (especially for rare earth minerals found in the mountains of Iraq).
Al-Abadi concluded that partnership with America is possible and beneficial, but it has inevitable conditions, and the opportunity exists, but it needs the mindset of a tough negotiator, noting that Iraq has human capital and land, and America has technology and access to markets.
He explained that when the scales are balanced, we can say: we are making a partnership, not an economic surrender treaty, calling for our deal to be a win-win deal, otherwise let the deal be suspended, because a loss in timing is worse than a loss in the deal itself.
development paths
In a related context, Jassim Al-Aradi, a member of the Baghdad Economic Forum, considered the economic partnership between Iraq and the United States an important opportunity to redirect bilateral relations towards development paths that achieve the highest levels of benefit based on investment, technology transfer and capacity building, instead of being limited to traditional trade relations. He indicated that Iraq possesses great potential that qualifies it to attract major American companies in the energy, industry, infrastructure, digital economy, agriculture and financial services sectors, which contributes to diversifying national income sources and reducing dependence on oil revenues.
Al-Aradi told Al-Sabah that the partnership should be based on the principle of mutual interests, by attracting quality investments that provide job opportunities for Iraqis, support the transfer of knowledge and modern technologies, and enhance local industries and production chains, while giving priority to projects that achieve added value for the national economy and contribute to increasing non-oil exports.
He added that the success of the partnership requires creating a stable investment environment by developing economic legislation, simplifying administrative procedures, enhancing transparency and protecting the investor, in addition to activating the role of the Iraqi private sector as a key partner in implementing projects, in order to ensure that the local economy benefits from foreign investments and that they are not limited to the implementation of contracts only.
Expanding areas of cooperation
For his part, expert and economist Hassan Ali Al-Daghari called for expanding the areas of cooperation to include technical education, vocational training, digital transformation, and energy.
He emphasized the importance of renewable energy and developing the banking sector, noting that these sectors are fundamental pillars for building a more competitive and sustainable economy. He added that the more partnerships are linked to programs for transferring expertise and building national capabilities, the greater their positive impact on development. Economic.
Al-Daghari pointed out, in an interview with Al-Sabah, that the success of the economic partnership with the United States is not measured by the size of the agreements signed, but rather by its ability to achieve tangible results represented in increasing investment, creating job opportunities, developing industry and production, and strengthening Iraq's position as an economic center. And my investment in the region.
The coffers are empty and the 2026 budget is buried... Will Iraqis enter a phase of "tightening their belts"?
Jamal Kojar, a member of the Parliamentary Finance Committee, confirmed on Saturday that the government's continued operation without a general budget effectively transforms it into a "caretaker government." He also revealed that the current government has shelved the 2026 budget and is moving towards a radical change in the structure of the 2027 budget.
Kojar told Al-Maalouma that "the government now lacks the necessary legal cover for investment and development spending," noting that "current government spending is limited exclusively to the operational budget (salaries and daily expenses), based on the (1/12) mechanism."
Kojar added that "the government's talk of sending the draft 2027 budget to Parliament next October means, practically and theoretically, the end and closure of the 2026 budget file without its approval," pointing out that "if the government had intended to send a budget for the current year, it would have done so months ago."
In a highly anticipated strategic shift, the MP revealed a "comprehensive change in the state's financial philosophy," explaining that "the upcoming budget (2027) will most likely be a program and performance-based budget, not a traditional line-item budget, which will completely transform the country's financial management."
Kujer urged the state's executive branch to "adhere to the provisions of the Financial Management Law," emphasizing the necessity of "finalizing the draft 2027 budget and submitting it to Parliament before mid-October, to ensure legislators have sufficient time to review and approve it, so that it becomes effective at the start of the new year."
The Finance Committee member warned of "the severe consequences of the absence of an investment budget on the public and markets," noting that "the failure to submit the 2026 budget resulted in the freezing of financial entitlements for broad segments of the population." He pointed out that "this freeze has cast a heavy shadow on the business sector, particularly contractors and owners of investment projects, exacerbating the crisis of stalled projects and halting development in the provinces."
Among them are 6 generals... The Chinese parliament dismisses 13 high-ranking officials
The National People's Congress is the highest legislative body in China, with approximately 3,000 delegates.
The council said the decision included 13 officials, among them six army generals, most notably Xu Xueqiang, who was in charge of equipment development at the Central Military Commission, the powerful body that leads the Chinese army.
The announcement did not explain the reasons for their dismissal from parliament.
Last February, prior to its annual session, the council had also dismissed a number of military officials.
Among the most prominent cases investigated were those of the two vice-chairmen of the Central Military Commission, Zhang Yuxia and He Weidong.
The council also announced the dismissal of senior party official Ma Xingrui, a member of the Politburo of the Chinese Communist Party, the inner circle in the Chinese leadership hierarchy.
Beijing had previously announced an investigation into Shengrui, as signs of his declining political standing emerged since the end of last year, after he missed important official meetings and events.
In June/July 2025, Shengrui lost his position as party secretary in the western province of Xinjiang, and it was said at the time that he would be assigned a new task, without giving further reasons.
The optimal weight of gold in foreign reserves: A look at the security and return equation
Dr. Haitham Hamid Mutlaq Al-Mansour
Calls to increase the share of gold in central banks' foreign reserves are made from time to time, particularly during periods of geopolitical instability, high inflation, and currency market volatility. These calls are often based on gold's historical status as a safe haven and a sovereign asset that retains its value in times of uncertainty.
However, managing foreign reserves cannot be based solely on choosing between "good assets" and "bad assets," but rather on defining the economic and monetary function of each asset within the reserve portfolio. Foreign reserves are not an investment portfolio aimed at maximizing profits, nor are they a store of wealth in the traditional sense. Instead, they are a tool of monetary policy designed to maintain monetary stability, strengthen confidence in the national currency, and provide the necessary external liquidity for intervention in the foreign exchange market and fulfilling international obligations.
For this reason, reserve management is based on three principles, ranked in order of priority: safety, liquidity, and return, not the other way around. Consequently, the evaluation of reserve components should be based on each asset's contribution to achieving these objectives collectively, not solely on the criterion of financial return.
In this context, gold performs a function radically different from that of government bonds, deposits, or securities. Gold represents a sovereign asset free from counterparty risk, as it is not dependent on the creditworthiness of any government or financial institution, nor is it linked to the possibilities of default, bankruptcy, or restructuring. It also provides a high degree of protection in cases of instability in the international monetary system, escalating geopolitical risks, and a loss of confidence in reserve currencies. However, these advantages come at a clear economic cost. Gold does not generate periodic cash flows, nor does it yield current returns; its returns are limited to capital gains. This is due to changes in its market value. Therefore, its contribution to the growth of foreign reserves depends entirely on gold price trends, which are characterized by a high degree of volatility and uncertainty.
In contrast, sovereign debt instruments and deposits with international financial institutions generate two types of returns: current returns in the form of interest or periodic returns, and capital returns derived from changes in their market prices. Furthermore, these instruments are highly liquid, easily reinvested, and have flexible maturities. Therefore, they constitute the primary source of income generated from foreign reserves at most central banks.
Therefore, the choice between gold and bonds is not a choice between two competing investment assets, but rather between two different functions within foreign reserves. Gold serves as a hedge against systemic and sovereign risks, while bonds and deposits serve to generate income and maintain operational liquidity. Substituting one for the other, therefore, disrupts the functional balance of the reserve portfolio.
Recent international developments, particularly the increased use of financial sanctions and the freezing of sovereign reserves, have demonstrated that the concept of a "safe asset" is no longer limited to low credit risk, but also encompasses independence from political and legal risks. This development has revived gold's status as a sovereign asset offering a degree of protection that traditional financial instruments cannot provide.
However, this does not justify increasing the relative weight of gold to levels that negatively impact the efficiency of foreign reserves. A higher gold content increases the market value of reserves to fluctuations in the gold market, reduces the average current yield, and diminishes the flexibility of liquidity management, particularly in economies that rely on foreign reserves to finance daily interventions in the foreign exchange market.
Therefore, the optimal decision is not to absolutely maximize or reduce the share of gold, but rather to determine the optimal strategic weight that achieves a balance between the functions of the various reserves, based on portfolio management models, stress tests, scenario analysis, and the risk structure faced by each central bank.
Therefore, this issue acquires added importance in the central bank's monetary policy, given the link between monetary stability and the stability of oil revenues, and the bank's reliance on foreign reserves to support exchange rate stability and bolster confidence in the dinar. Consequently, reserve management policy should be based on a long-term strategic perspective that balances liquidity, return, and hedging requirements, moving beyond short-term responses to fluctuations in gold prices or waves of optimism and pessimism in global markets.
In short, gold should not be viewed as an asset solely for maximizing returns, nor should bonds be considered a substitute for gold. Each has a distinct function within foreign reserves. The efficiency of reserve management lies in the ability to balance security, liquidity, and return, ensuring that each asset fulfills its role within an integrated risk management framework. Gold, in its essence, is not a tool for generating profit, but rather a means of ensuring the ability to maintain a nation's financial and monetary stability.
Breaking | Entrances and exits to the Green Zone closed; footage circulating shows raids as part of a wide-ranging campaign launched by President al-Zaidi to pursue the big fish of corruption in Iraq.
Since the early hours of today (Sunday), videos and pictures have been circulating showing a heavy security presence and raids in the Green Zone in central Baghdad.
Activists and media accounts report raids and arrests carried out by elite forces led by Prime Minister and Commander-in-Chief of the Armed Forces Ali Faleh al-Zaidi, with the support of the Iraqi judiciary, to arrest politicians accused of major corruption cases as part of ongoing investigations into some of those recently arrested.
Iraqis followed the news of this surprise attack on the hornet's nest, which they thought would be a haven for those who had turned the Green Zone into a large prison, until the early hours of the morning.
Activists circulated the hashtag #TakeItOff, Your Excellency, in support of President al-Zaidi's arrest of the corrupt figures. An
official government statement with details is expected.
another version
A security source reported on Sunday that special security forces were deployed inside the Green Zone in central Baghdad, coinciding with news of arrests targeting senior political officials and security personnel involved in corruption cases.
The source told Shafaq News Agency that special forces were deployed around a number of sensitive headquarters inside the Green Zone, with security measures being tightened at some entrances and roads leading to them.
He added that the security deployment coincided with information about arrests carried out according to judicial orders, targeting figures, officials and security personnel whose names appeared in files related to corruption and abuse of power.
AUDIO for this blog and the articles I covered are below that player:
The Revolutionary Guard announces a joint operation using missiles and drones targeting American sites in Kuwait and Bahrain.
Five Iranian coastal sites were targeted, under the pretext of an alleged "confrontation by the Revolutionary Guard Navy with a violating vessel," a move the statement described as reflecting "the enemy's treacherous nature and violation of covenants and agreements." The Revolutionary Guard issued stern warnings regarding maritime security in the region, noting that, according to the "Islamabad Agreement," the Islamic Republic of Iran is responsible for controlling passage through the Strait of Hormuz.
The statement emphasized that "violating vessels will henceforth be dealt with more forcefully and decisively than before," warning that "any potential aggression by the enemy, even if it targets less important objectives as occurred in recent nights, will be met with an overwhelming and devastating response." Concluding its statement, the Revolutionary Guard addressed a direct message to the American side, stating that "violating the ceasefire constitutes a breach of Article 1 of the Islamabad Agreement, which will lead to a complete cessation of all operations and related activities."
Iran's Revolutionary Guard warns against crossing unauthorized routes in the Strait of Hormuz
US Central Command: Iran violated the ceasefire... and we targeted military sites in response to a naval attack
The US Central Command announced that Iran was given an opportunity to abide by the ceasefire agreement following the US strikes carried out on Friday, but it chose not to abide by the agreement.
The command added that Iran launched an attack drone that hit the Panamanian-flagged tanker “Kiko”, considering this a violation of the ceasefire agreement.
She confirmed that US aircraft carried out strikes targeting Iranian military surveillance infrastructure, communications systems, and air defense sites, in response to the attack on the ship.
Netanyahu announces sending an Israeli delegation to Washington to discuss Iran
Israeli Prime Minister Benjamin Netanyahu announced his intention to send a delegation to Washington to discuss Israel's security concerns and interests related to the agreement between the United States and Iran. Netanyahu emphasized that although Israel was not a party to these understandings, his country would not hesitate to defend its interests.
During a press conference, Netanyahu pointed out that Israel had made it clear from the beginning that it was not a party to the American-Iranian agreement, but he stressed the importance of raising Israeli security interests for discussion with the American administration.
He added that the delegation planned for Washington would work to clarify Israel's position, particularly regarding the issues related to the Iranian nuclear program. Netanyahu did not disclose the date of the visit, the names of the delegation members, or the American officials they would meet.
In a related context, Netanyahu reiterated the need to maintain the security zone controlled by Israel in southern Lebanon, noting that he had made several contacts with US Secretary of State Marco Rubio recently.
He said Rubio expressed American support for the concept of a security zone, considering it an effective means of preventing Iran and Hezbollah from carrying out attacks against Israel.
Iran's Revolutionary Guards set up covert Iraqi cells to attack Gulf neighbours, sources say
The establishment of the new Iraqi cells, which has not previously been reported, reflects a shift in IRGC tactics aimed at preserving Iran's ability to project force across the region.
Summary
- New groups report directly to Iran's IRGC, bypassing established militia networks, sources say
- Iraqi officials say the groups carried out drone attacks against Kuwait, Saudi Arabia and UAE
- New Iraqi PM Zaidi condemns attacks, pledges joint inquiry with Gulf states
- Iran says its support for 'resistance groups' is not up for discussion
Iran's Islamic Revolutionary Guard Corps (IRGC) has set up secretive new cells in Iraq to carry out attacks on Gulf countries that host American forces, bypassing established militia networks to avoid detection, eight Iraqi sources told Reuters.
Three or four cells, each comprising about 10 elite Iraqi Shi'ite Muslim fighters, launched at least seven drone attacks from desert locations near the southern cities of Basra and Samawa against sites in Kuwait, Saudi Arabia and the United Arab Emirates between 20 April and 17 May, three of the sources said.
A number of their members were drawn from Islamic Resistance in Iraq, an umbrella group of hardline Shi'ite factions with thousands of fighters. But the new groups operate outside its command structure, reporting directly to the IRGC, according to the sources, who include two Iraqi military officials, another security official and five local militia commanders.
The establishment of the new Iraqi cells, which has not previously been reported, reflects a shift in IRGC tactics aimed at preserving Iran's ability to project force across the region at a time when its armed proxy groups are greatly diminished and its own military and economic resources are depleted, the five militia commanders said.
Iraq, a Shi'ite-majority country, has a host of militias, many of which maintain close ties to Tehran. They form a key pillar of Iran's regional "Axis of Resistance," stretching from Gaza and Lebanon to Yemen and Iraq.
Groups acting under the banner of Islamic Resistance in Iraq have claimed responsibility for dozens of drone and rocket attacks against American assets in the country, drawing deadly retaliatory airstrikes, since the US and Israel attacked Iran on February 28. But there has been no mass mobilization of Iran's proxies inside Iraq's borders.
Several powerful Shi'ite factions there have been signalling since last year that they are ready to disarm and focus on domestic politics to avert an escalating conflict with the administration of US President Donald Trump. That development may have spurred the IRGC to set up groups under its direct control, according to Jasim al-Bahadli, a retired Iraqi army general, and two lawmakers from the Shi'ite governing alliance.
Two of these factions, Asaib Ahl al-Haq and the Imam Ali Brigades, announced this month that they would begin surrendering their weapons to state authorities following repeated US warnings to Iraq's government to disband armed groups operating on its soil.
"The newer groups established by the IRGC appear smaller, more ideologically hardened and more tightly controlled, reflecting Iran's need to conserve resources amid economic strain," said Bahadli, who is an expert on Shi'ite armed groups.
US-Iran deal does not address Tehran's support for proxies
The US and Iranian presidents signed an interim agreement on Wednesday to end the war, with negotiations to follow on difficult issues like the future of Tehran's nuclear programme. But Iranian officials have said Tehran's support for "resistance groups" is not up for discussion, and the agreement does not address the issue.
Iran's foreign ministry and its missions to the United Nations in New York and Geneva did not immediately respond to detailed questions for this article.
The US State Department reiterated "expectations that the Iraqi government take immediate measures to dismantle all the tools of Iran's destabilizing activities in Iraq to include the IRGC and Iran-aligned terrorist militias in Iraq."
At a meeting on Monday, Iraq's new prime minister, Ali al-Zaidi, and US envoy Tom Barrack discussed Iraqi plans to ensure "the complete disarmament and disbandment of all armed groups" operating outside Iraqi state control and to ensure "Iraqi territory cannot be used by any side to threaten regional peace," according to a joint statement.
Zaidi's military spokesman, Sabah al-Numan, declined to comment for this article.
Kuwait's information ministry, the Saudi government communications office and the UAE foreign ministry did not respond to requests for comment.
The war in Iran has battered the world's most important energy-producing region, disrupting supplies and sending inflation surging. Tehran responded to US-Israeli bombing runs by effectively closing the Strait of Hormuz, through which roughly a fifth of the world's trade in oil and liquefied natural gas passes, and launching a sweeping campaign of drone and missile strikes on Gulf neighbours.
New groups that emerged in Iraq during the conflict, often operating under unfamiliar names and with minimal public profiles, carried out at least three drone attacks targeting Kuwait, two targeting Saudi Arabia and two aimed at the UAE, the three Iraqi security sources said, citing a combination of human intelligence, intercepted communications and evidence gathered from launch sites.
Targets included Kuwait's Ali Al Salem Air Base, where US forces are deployed, and a military terminal at the country's international airport, the sources said without elaborating. The attacks aimed at Saudi Arabia and the UAE were intercepted, according to the sources who could not confirm the intended targets.
Reuters could not independently verify their accounts.
An early test for Iraq's new prime minister
Iraqi officials said the IRGC turned to the new cells to maintain plausible deniability, deflect blame from the country's main Iran-backed groups and reduce US pressure on Baghdad to disarm them.
The Iraqi security forces have limited information about the groups but are working to uncover their chains of command to help prevent future attacks, the officials said. The groups include elite fighters with expertise in drone operations and communications, they added.
Tehran spent decades and billions of dollars building up its network of regional alliances, which has been severely weakened since the Iran-backed Palestinian militant group Hamas attacked Israel on 7 October 2023.
Israel has hammered Hamas in Gaza and Hezbollah in Lebanon, while the Houthi movement in Yemen has been targeted by US and British airstrikes. Syrian President Bashar al-Assad was toppled in December 2024, cutting off an important supply route for Iraqi militias and further isolating the Islamic Republic.
Rather than maintain a broad network of well-funded groups in Iraq, Iran now appears to be relying on a limited number of "more radicalized cadres willing to operate with leaner financial support, prioritising loyalty, deniability and operational impact over mass recruitment," said Bahadli, the militia expert.
The new groups pose an early test for Iraq's Zaidi, who took office last month following US pressure on the dominant alliance of Shi'ite political blocs to prevent the return of former Prime Minister Nouri al-Maliki, who has close ties to Iran. Baghdad has long walked a tightrope between its two closest allies, Washington and Tehran, a balancing act that became more difficult during the war.
Attacks emanating from Iraq also risk unraveling Baghdad's painstaking efforts to rebuild ties with wealthy Gulf neighbors, which have been strained since Saddam Hussein invaded Kuwait in 1990 but had started to thaw in recent years.
Kuwait, Saudi Arabia and the UAE summoned Iraq's envoys in April to protest the strikes.
Iraqi authorities are investigating whether they include a May 17 drone attack that caused a fire at the Barakah Nuclear Power Plant, security officials said. Saudi Arabia said it intercepted three drones that entered its airspace from Iraq the same day, an attack the Iraqi officials said was carried out by a new group.
Zaidi condemned the two attacks, describing them as criminal acts, and promised a joint inquiry with both Gulf countries to verify whether Iraqi territory was used to target them. Numan, Zaidi's spokesman, did not answer questions about the status of the investigation.
No comments:
Post a Comment