Iraq Economic News and Points to Ponder Wednesday AM 12-27-23
Tlm724 Administrator Bondlady’s Corner
A Noticeable Decline In The Dollar Exchange Rate Amid Anticipation In The Markets
Economical 12/25/2023 Baghdad: Al-Sabah Dollar prices have decreased significantly in the past few days throughout Iraq, as the end of the current year approaches, with the market awaiting fear of its fluctuation or rise again.
While the Iraqi government believes that the decline in the price of the dollar was due to several reasons, including “the high capabilities of Iraq’s currency reserves,” the stock market, specifically in Sulaymaniyah, had another opinion as it warned of an increase in its price due to the New Year’s holiday.
The government’s comment came from Mazhar Muhammad Salih, the financial and economic advisor to Prime Minister Muhammad Shia al-Sudani, in which he said:
“Among the reasons for the decline in the dollar exchange rate in the parallel market are the high capabilities of Iraq’s foreign currency reserves and the good management of foreign trade financing during the last period.”
Saleh stated that “the parallel market is gradually approaching the official central market, due to the presence of regular foreign trade by the private sector through the compliance platform and the great flexibility that banks have shown in dealing with this platform for the purpose of securing transfers.”
He added, “The openness to transfer through various methods, including payment cards in all their forms, importing foreign cash currency into Iraq, and financing foreign trade in various currencies, and not limiting this transaction to the dollar only, led to a decrease in the dollar exchange rate in the parallel market as well.” The financial and economic advisor to the Prime Minister continued,
“The monetary policy of the Central Bank is exercising its role precisely and positively and in accordance with short- and medium-term plans to maintain the stability of the national economy, and for this reason the exchange rate will continue to decline in the parallel market.” https://alsabaah.iq/89279-.html
The “Parallel Dollar”… 5 Factors To Control The Rhythm And A Parliamentarian Identifies The “Major Weak Point” In The Iraqi Economy
Economy/Politics | Baghdad Today, Tuesday (December 26, 2023), Member of Parliament Hussein Habib identified five factors to control the rhythm of the parallel dollar in Iraqi markets, while noting that a significant number of Iraqis are forced to travel for treatment and spend huge sums of money in dollars.
Habib told “Baghdad Today” that “many positives accompany the decline in the exchange rate of the dollar in the parallel market, the most prominent of which is its direct impact on millions of Iraqis in terms of reducing the prices of materials in the markets,
but the dollar does not decline through wishes and statements, but rather through actual plans that take their reach in interacting with the reasons for the rise.” dollar directly. He added,
“There are five factors that control the rhythm of the parallel dollar , the most prominent of which is reducing demand for it and striving for an actual renaissance in the industry file, because a large portion of the dollar export abroad comes through the balance of imports, which includes the highest percentage of market needs,” pointing out that
there is a real desire among the Sudanese to Strengthening the value of the Iraqi dinar against the dollar, but the matter requires other measures that contribute to preserving the hard currency, and perhaps opening investments and reviving factories is an important step.”
Habib pointed out, “A significant number of Iraqi patients are forced to travel for treatment and they spend huge sums of money in dollars, and this is one of the pieces of evidence that shows part of the reasons for the dollar’s departure abroad,” explaining that
without industry, production, and solving the problems of services, this will remain a weak point in the national economy and remain A pressure factor on the parallel market in the country.”
For about two weeks, the dollar exchange rate has been witnessing a continuous decline, as it fell from 1600 to 1480 gradually, at a time when economic specialists expressed the lack of clarity of vision or the existence of a direct reason for the decline in exchange rates.
Rather, they are many indicators and reasons accumulated and combined with each other that led to a lack of demand. On the dollar in the parallel market.
Advisor To The Association Of Private Banks: Serious Steps To Confront The Dollar Crisis
December 26, 2023Last updated: December 26, 2023 Independent/- Advisor to the Iraqi Private Banks Association, Samir Al-Nusairi, confirmed that the Iraqi government and the Central Bank are working in harmony to address the dollar crisis, and that there are serious steps that have been taken or are being taken in this direction.
Al-Nusairi said in press statements, followed by Al-Mustaqila on Tuesday, that the Central Bank began digital transformation in the banking sector since 2016, by developing electronic payment systems and electronic banks.
It also took a new strategy for economic action that includes steps to enhance local production and reduce dependence on imports.
Al-Nusairi added that the Iraqi government worked hard to reconsider monetary policies and diagnose the defect, and that there is great optimism for the continued decline in the price of the dollar in Iraq, as it is expected to reach 140 dinars in the first quarter of next year.
Al-Nusairi pointed out that Iraq has begun to take the right steps to enter the global financial system, as an agreement was signed with the International Monetary Fund, the Baghdad Stock Exchange was established, and work is underway to establish a regulatory body for financial markets.
Al-Nusairi explained that there is “chaos” in foreign trade in Iraq, as unnecessary goods and services are being imported, which increases the pressure of the dollar on the Iraqi economy, and called for the necessity of organizing and controlling foreign trade.
Informed sources have confirmed that the US Ambassador in Baghdad, Alina Romanowski, with the support of a specialized team from the US Treasury Department, has exerted great and continuous pressure on the Central Bank of Iraq and the Ministry of Finance in order to adhere to international standards in the field of transferring and exchanging money with the world.
The statements of the advisor to the Iraqi Private Banks Association indicate that there are serious steps that have been taken or are being taken in Iraq to address the dollar crisis, as the Central Bank and the government are working in harmony in this direction.
These steps include digital transformation in the banking sector, enhancing local production, reducing dependence on imports, entering the global financial system, and regulating foreign trade.
If Iraq succeeds in implementing these steps, it is expected that the severity of the dollar crisis in the country will decline and return to acceptable levels.
But there are still some challenges that Iraq must overcome, such as controlling foreign trade and reducing corruption. https://mustaqila.com/مستشار-رابطة-المصارف-الخاصة-خطوات-جاد/
The Recovery Of Iraqi Economic Activity, Will It Repeat Its Role?
Economical 12/25/2023 Yasser Al-Metwally Most countries base their economic relations on international assessments of a specific country’s economy, aiming to deal with it based on the strength of its economy, according to current custom.
By tracking the assessments of the International Monetary Fund missions through its teams of experts, we conclude that the Iraqi economy has begun to recover despite the impact of the cuts imposed on its oil production on overall growth.
The important result is that inflation rates have declined during this year.
Despite all the criticism directed at the approach to the tripartite budget (the framework of the effective three-year budget law) and with the possibility of significant risks to the sustainability of the country’s public financial conditions in the medium term, the structural reforms pursued by the government are extremely important factors in ensuring the protection and stability of the macroeconomic.
In light of this vision, expectations of achieving growth by 5 percent during the year 2023, which is about to end, have been achieved.
It is true that implementing the budget will help to continue non-oil growth in the next year 2024.
However, the decline in oil production after the closure of the oil pipeline linking Iraq and Turkey, and reducing Production at the request of the OPEC+ group will work together to reduce gross domestic product growth in the years 2023 and 2024.
The inflation rate has declined from its peak of 7 percent this year, and
the most important thing is that it is expected to remain stable at this rate during the coming months.
Perhaps the reason for the reduction in inflation rates is due to the
Central Bank of Iraq adopting a more stringent monetary policy, the
impact of raising the exchange rate of the Iraqi dinar, the
decline in global food prices, and the
return of trade financing operations to normal with improved compliance with the anti-money laundering and counter-terrorism financing framework.
It is useful to point out that adopting the three-year budget setting method may lead to improving the level of financial planning and the continuity of implementation of development projects in the medium term. Which is the most important thing.
However, the government faces another challenge, as the delay in starting to implement the budget this year may contribute to the shift from a large surplus achieved in 2022 to a larger deficit in 2024, reflecting the full annual impact of budget procedures.
Such a major expansion in public finances, including a fundamental increase in the numbers of public sector members and pensioners, will raise public spending rates, which will put pressure on funds.
In this case, the government must ensure the protection of extremely important needs, and this is done by examining more non-oil revenues.
The government did well by paying attention to addressing this aspect by supporting these measures by moving to work on a more targeted social safety net, and working to provide better protection for groups. Fragile.
Hence, the most important role of the private sector is highlighted in achieving balance in reducing pressure on the government by stimulating economic diversification and creating job opportunities led by the private sector, which is a pivotal factor in achieving growth.
This trend is credited to the government if support for the private sector continues to ensure the creation of equal opportunities for the private sector through reforms. In banking and the electricity sector, reducing distortions in the labor market, and continuing to make efforts to strengthen governance and limit the spread of corruption.
This evaluation of governance performance by international experts will require them to advance the reality of the Iraqi economy and sustain this recovery, so that Iraq can regain its pivotal role among emerging economies. https://alsabaah.iq/89277-.html
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Provoking Points To Ponder on Power:
Force is never more operative than when it is known to exist but is not brandished. – Alfred Thayer Mahan
The main task of a free society is to civilize the struggle for power. Slavery of the acquiescent majority to the ruthless few is the hereditary state of mankind; freedom, a rarely acquired characteristic. – R. H. S. Crossman
Power corrupts the few, while weakness corrupts the many. – Eric Hoffer
His countenance was like lightning, and his raiment white as snow. – Bible
Power is the recognition of necessity. – Abraham Rotstein
If absolute power corrupts absolutely, where does that leave God? – George Daacon
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