Iraq Economic News and Points to Ponder Monday Afternoon 10-2-23
Tlm724 Administrator Bondlady’s Corner
An Economic Expert Details The Cash Conversion Cycle Of The Iraqi Dinar
Time: 10/02/2023 Read: 1,326 times {Economic: Al-Furat News} The economist, Salah Nouri, detailed the monetary conversion cycle of the Iraqi dinar.
Nouri said {to Al-Furat News} that: “The monetary cycle {the Iraqi dinar} exists between the Central Bank, as the monetary authority and the only authorized one to issue the national currency, and the Ministry of Finance, as the financial authority authorized to implement the federal budget in terms of spending and collection.”
He added, “The third party is the public, the financial institutions {governmental and private banks} and the trade, agriculture and industry sectors, meaning that the cash that is offered to the public when implementing the budget returns to the Central Bank and then to the Ministry of Finance.”
Nouri explained, “What is happening is that the cash raised through the implementation of the budget will not return to the central bank at a high rate and therefore to the Ministry of Finance,” attributing the most prominent reasons for this to “the exclusion of private banks from the currency auction, which no longer deposit the Iraqi dinar with the central bank in exchange for the dollar.”
“In addition to the tendency of the public and merchants towards hoarding and dealing in cash not through banks.”
He stated, “The exclusion of private banks from the auction is the main reason; but this does not mean that they have a positive role in the economy. Rather, they only practice speculation in dollars, and they are supposed to engage in economic activity by accepting deposits and lending to economic projects.”
Nouri added, “Accepting deposits and keeping a percentage of them with the Central Bank also contributes a percentage to returning the dinar to the Central Bank. This is why the Central Bank’s decision was for banks that were punished by the US Federal Reserve from dealing in dollars to continue dealing in dinars in their economic activities that are not speculative in dollars.”
He stressed that “the Central Bank can provide liquidity to the Ministry of Finance by issuing a new monetary mass, despite its disadvantages.”
Specialists in economic and financial affairs reported that despite the large size of the monetary supply, which amounts to (83) trillion dinars, there is a noticeable scarcity of cash liquidity from the Iraqi dinar in the commercial markets, explaining that this comes for several reasons, the first of which is mismanagement. The financial file in the country. LINK
The Central Bank Denies The Scarcity Of Cash Liquidity And Describes Its Currency And Gold Reserves As “Historic”
Time: 10/02/2023 Read: 1,638 times {Economic: Al-Furat News} A source in the Central Bank of Iraq denied that there was a “scarcity” of cash liquidity in the country’s markets.
The source confirmed to Al-Furat News Agency: “There is no scarcity of cash, and cash is available despite the current policy, which is a contractionary policy, but cash is available.”
He pointed out that “the foreign reserves and gold at the Central Bank are at historical levels, and the electronic platform is open to anyone who wants to officially enter into buying the dollar at the official price.”
Specialists in economic and financial affairs reported that despite the large size of the monetary supply, which amounts to (83) trillion dinars, there is a noticeable scarcity of cash liquidity from the Iraqi dinar in the commercial markets, explaining that this comes for several reasons, the first of which is mismanagement. The financial file in the country.
Professor of Economic Affairs, Jaafar Alloush, said in a press statement that “the problem of liquidity scarcity – if it exists – is linked to a number of factors, including the economy’s lack of monetary flexibility in managing public money, while official monetary indicators do not indicate the existence of a liquidity scarcity.” “.
He explained, “The problem is that the largest portion of the issued currency is with the public, which accounts for 91.3% of the issued currency, amounting to more than 90.070 trillion Iraqi dinars of that currency outside the banking system, and despite the fact that this (huge) monetary mass is used for transaction purposes from… before the public and to carry out its daily economic activity, but it is outside the control of the monetary authorities.” LINK
Oil Begins Its Weekly Trading With A Jump In Prices To Touch $93 Per Barrel
Economy | 02/10/2023 Baghdad – Mawazine News Oil prices rose in early trading on Monday, recovering some of their losses in Friday’s session as investors focused on expectations of a lack of global supply and a last-minute agreement to avoid a US government shutdown, which restored their appetite for risk.
By 0037 GMT, Brent crude futures for December rose 18 cents, or 0.2 percent, to $92.38 a barrel, after falling 90 cents in Friday’s session. Brent crude futures for November settled down seven cents to $95.31 a barrel when the contract expired on Friday.
West Texas Intermediate crude futures rose 23 cents, or 0.3 percent, to $95.31 a barrel, after falling 92 cents on Friday.
The two crude oils rose by nearly 30 percent in the third quarter, supported by expectations of a widening oil supply deficit in the fourth quarter after Saudi Arabia and Russia extended voluntary production cuts until the end of the year.
Four sources told Reuters that the Organization of the Petroleum Exporting Countries (OPEC) and its allies, or the group known as OPEC+, are unlikely to revise current oil production policy when the ministerial committee meets on Wednesday, given that supply cuts and increased demand are pushing oil prices higher.
A last-minute decision by Republican US House of Representatives Speaker Kevin McCarthy to enlist the help of Democrats to pass a temporary funding bill that postpones the possibility of a government shutdown until mid-November, which means that more than four million government employees can continue to receive their salaries. https://www.mawazin.net/Details.aspx?jimare=235776
Planning: Inflation Rates In Iraq Are 4% And Their Rise Is Logical
Time: 10/01/2023 Read: 806 times {Economic: Al-Furat News} The Ministry of Planning announced that inflation rates in Iraq are rising logically, as the annual rise touched the 4 percent barrier compared to the year preceding the last inflation indicators that were read, which was last July.
Ministry spokesman Abdul Zahra Al-Hindawi said in a press statement, “Food prices in particular have witnessed stability in their rates, despite a global rise in prices, especially the prices of food and construction materials, which have witnessed an increase in their rates during the recent period, affected by the Russian war factor.”
Ukrainian and other global factors, as a result, food prices rose, especially wheat, rice, and oil, which represent the foundations of the food basket worldwide.”
He noted, “The world has been negatively affected by this aspect, so we see in most countries that there has been a wild rise in inflation rates during recent months at the level of the countries of the region, not to mention that Iraq is suffering from other factors, in addition to the global factors, including the high exchange rate and the parallel exchange market.” These factors have side effects on the economic reality in the country.
Al-Hindawi added, “The situation in Iraq seemed different from the rest of the countries, indicating that this difference was represented by the fact that inflation did not witness a rise in its rates as it had seen in other countries, as inflation rates in Iraq rose logically, as the annual rise touched the 4 percent barrier compared to The last year the inflation indicators were read was last July, when the index witnessed a decline of 0.3 percent, while the annual level witnessed an increase of 3.5 percent.
He continued that the other factor is that the prices of foodstuffs, in particular, have maintained the stability of their prices and even decreased the rates of some of them during recent periods, attributing “this decrease in foodstuffs to the stability of inflation prices as a result of reasons, foremost of which is the government’s success in securing foodstuffs through the card system.”
The ration system witnessed stability in the periods of the distribution system, an increase in quantities, and an improvement in quality during recent months.
He pointed out that “this improvement led to the stability of prices in the markets, stressing that when talking about food items distributed through the ration card, they contributed greatly to the stability of prices and even their clear decline compared to what they were a year or two ago, which is {what is called “With consumer reassurance among the citizen as a result of the availability of foodstuffs in sufficient quantities and on a regular basis.”
He added, “On the other hand, the state, despite the high exchange rate and the existence of the parallel market, has succeeded in covering all imports of food and basic supplies at the official price of the dollar, and thus it is an important step that has affected the stability process,
not to mention the unforeseen support provided in Purchasing agricultural crops from farmers at prices higher than international rates, which encouraged agriculture, especially the last season, as it was the first season in which Iraq witnessed a spontaneous increase in wheat production by more than 5 million tons produced during the previous season, which resulted from broad support to farmers.” LINK
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Points to Ponder on Truth:
It’s a basic truth of the human condition that everybody lies. The only variable is about what. The weird thing about telling someone they’re dying is it tends to focus their priorities. You find out what matters to them. What they’re willing to die for. David Shore, House M.D., Three Stories, 2004
The public will believe anything, so long as it is not founded on truth. Edith Sitwell (1887 – 1964)
Truth is the only safe ground to stand on Elizabeth Cady Stanton (1815 – 1902)
The truth is more important than the facts. Frank Lloyd Wright (1869 – 1959)
All truths are easy to understand once they are discovered; the point is to discover them. Galileo Galilei (1564 – 1642)
The truth that makes men free is for the most part the truth which men prefer not to hear Herbert Agar
As scarce as truth is, the supply has always been in excess of the demand. Josh Billings(1818 – 1885), ‘Affurisms from Josh Billings: His Sayings,’ 1865
Say not, ‘I have found the truth,’ but rather, ‘I have found a truth.’ Kahlil Gibran (1883 – 1931)
Do not run from the truth. There be nought so hard to live with as a lie. Kathryn L. Nelson,Pemberley Manor, 2006