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Sunday Morning Iraq Economic News Highlights 8-6-23

An Expanded Meeting To Discuss The Draft Oil And Gas Law

Money  and business  Economy News – Baghdad  Yesterday, Wednesday, the Ministry of Oil announced the holding of an expanded meeting to discuss the draft oil and gas law, while confirming that it came out with recommendations.

The ministry stated, in a statement received by “Al-Iqtisad News”, that “based on the package of legislative reforms that came in the government curriculum, specifically what came in the twenty-third axis regarding the preparation of the draft oil and gas law, and based on the directive of the Prime Minister, Muhammad Shia’a Al-Sudani, to expedite the completion of this project and with the participation of all The relevant parties in this strategic national project, a meeting was held today in the presence of the two deputy prime ministers (Minister of Foreign Affairs – Minister of Oil), the delegation of the region, the governors of the oil-producing provinces, the prime minister’s advisors and the leadership cadre in the Ministry of Oil.

She added, “The meeting dealt with the importance and objectives of this law and the need to complete it as soon as possible, with the participation of the region, the oil-producing governorates, and representatives of the Prime Minister’s Office.” The Ministerial Council voted on by the House of Representatives, as well as being the mainstay for investing oil and gas wealth in the best international practices and in a manner that secures the interest of all the Iraqi people.

She indicated that “the meeting resulted in the following recommendations:

1- Forming committees to follow up on this issue and organizing subsequent meetings.

2- A working paper is presented by the committees on the basis of the vision presented by the ministry, the Kurdistan Regional Government and the producing provinces in light of the discussions that took place during the meeting and the previous discussions to be studied by these committees in order to prepare the final draft of the oil and gas law.

Views 20   08/06/2023 –

Dollar Speculation.. A Profession That Spreads In Baghdad And The Iraqi Provinces And Affects The Economy

August 6, 2023  Baghdad / Obelisk Al-Hadath: A new category is emerging in the Iraqi trade market, and they are the major smugglers and speculators at the dollar exchange rate in Baghdad and other provinces.

The issue of the exchange rate of the dollar has turned into a battle between the state, which insists on completing the reform of the financial and banking system on the one hand, and a group of speculators and smugglers on the other, according to the description of the Prime Minister, Muhammad Shia’ al-Sudani.

Dollar speculators are individuals or entities that buy and sell dollars or foreign currencies quickly and frequently with the aim of making a profit from exchange rate fluctuations.

These entities include banks, financial firms, individual investors, and sometimes even some government institutions. These entities seek to exploit the differences in foreign exchange rates to make quick profits.

The activities of currency speculators prompted the Central Bank of Iraq to review the work of banks and exchange companies to verify funds, and the Integrity Commission has applied procedures to 40 exchange companies and their work will be regulated in entering the financial market.

There is a significant impact of dollar speculators on the Iraqi economy, which relies heavily on oil revenues as a main source of hard currency, and due to fluctuations in oil prices and unstable economic and political conditions, the value of the Iraqi dinar has been greatly affected.

A few days ago, the National Security Agency carried out an operation that overthrew a network of major currency speculators, who were setting an exchange rate and communicating with small speculators to withdraw dollars from the market for them.

These speculators were associated with others in the Kurdistan region, through whom currency was being smuggled.

Dollar speculation in Iraq leads to sharp fluctuations in the exchange rate, which affects the predictive ability of individuals and companies, increases inflation and negatively affects economic and social stability. The fluctuation of the exchange rate could also exacerbate the government’s financial conditions and affect its ability to implement development programs and provide basic services to citizens.

And in August 2023, the National Security Agency was able to overthrow the largest smuggling networks in their possession of 14 million dollars intended for smuggling, while the defendants admitted to using fake companies as a cover for smuggling currency .. Also, 12 accused of smuggling currency were overthrown in the governorates of Basra, Diyala and Muthanna, in possession of more than 300 million dinars.

At the same time, the Border Ports Authority announced that it had thwarted an attempt to smuggle more than 48,000 dollars at the Zurbatiya port through a GMC driver.

In July 2023, the security forces were able to overthrow a network that traded in dollars, and 14 million dollars intended for smuggling were seized along with 50 billion Iraqi dinars that were on their way out of Iraq.

Despite the continued prosecution of networks and the arrest of dozens, it did not reveal the contacts of these influential networks.

And a member of the Finance Committee, Faisal Al-Naeli, stated that there are hands that withdraw the dollar to patch the exchange rate so that certain parties from bank owners or merchants can benefit from it.

Writer Muhammad Fakhry al-Mawla said in an article that the state’s economic approach must be clear through a series of measures aimed at stabilizing the local market and removing the influence of the parallel (black) market on it and on the citizen.

Activist Aziz talks about private banks that have fake companies that withdraw the dollar from the currency auction, go to the black market, and flee outside Iraq under the pretext of importing from fake companies that do not exist.  Prepared by Muhammad Al-Khafaji

Financial Expert: The Dollar Will Settle At 1,500 Dinars In The Parallel Market

2023-08-06 03:59  Shafaq News/ Financial expert Hilal Al-Taan expected today, Sunday, that the exchange rate of the dollar will stabilize at its current rates in the parallel market, indicating that the bank’s cash sales do not cover the local market.

Al-Taan said in an interview with Shafaq News agency, “It is expected that the dollar will stabilize at 1,500 dinars in the parallel market, after its prices decreased slightly.”

And he indicated that “the demand for the dollar is still great in the parallel market, despite the Central Bank’s measures.”

He added that “the delay in transfers for the purpose of being audited by the international banks that Iraq contracted with led to merchants resorting to the parallel market to buy the dollar,” noting that “the bank’s cash sales are also few and do not meet what the market needs internally.”

The price of the dollar fell against the Iraqi dinar, reaching today, Sunday, 1500 per dollar.  LINK

A Senior Delegation From Barzani’s Party Arrives In Baghdad Tomorrow, Sunday, To Discuss The Budget And Oil File

policy  ,  05/08/2023 20:02  , Number of readings: 513  Baghdad-Iraq today:  The Kurdistan Democratic Party sends a delegation to Baghdad to discuss the implementation of the federal budget law, the preparation of the draft oil and gas law, and many other issues.

And media sources affiliated with the Democratic Party reported that a high-ranking delegation from the political bureau of the party will visit Baghdad tomorrow (Sunday) to meet with the parties to the state administration, including the coordination framework.

The source said, “The delegation will discuss the implementation of the Sudanese cabinet program, the implementation of the federal budget law, the preparation of a draft oil and gas law, and a number of other issues with the parties.”

According to the sources, the delegation will be headed by Fadel Mirani, Chairman of the Executive Committee of the Political Bureau, and includes Hoshyar Zebari, Mahmoud Muhammad, Pashtwan Sadiq, Fouad Hussein, and a number of other members of the Bureau, which is the highest leadership body in the party.  LINK

The Kurds Continue To Pressure Sudani To Release Their Share Of The Budget

Policy  06/08/2023  Number of readings: 231 Baghdad – Iraq today:  The head of the parliamentary bloc of the Kurdistan Democratic Party, Vian Sabri, stated that the federal government must pay the region’s dues in compliance with the budget law.

Sabri said in a tweet: “After the Kurdistan Regional Government abided by the provisions of the oil and non-oil budget, and despite the appeal submitted by the region to the Federal Court on Articles (2-11-12-13) of the budget, the federal government must fulfill the remaining dues.” For the Kurdistan region for the month of June and paying all the region’s dues for the month of August, in compliance with the budget law and its schedules, voted on in the House of Representatives.

[rtl]She added, “The budget is rights and duties, and the most important thing is adherence to it, because it establishes the state’s political stability before the economy.”  LINK

Experts Propose Solutions To Stabilize The Dollar

Economical  2023/08/06    Baghdad: Shukran Al-Fatlawi  Experts in the financial affairs have identified a number of solutions that would create stability in the dollar exchange rate, putting at the forefront of these solutions the tightening of control over border crossings to implement the Central Bank’s proposal to prevent the import of goods not funded by documentary credits and official transfers issued by it,

pointing out that this The decision, if implemented, would lead to a significant decrease in the parallel exchange rate, stressing at the same time the necessity of transferring all transactions to the Iraqi dinar, and increasing the use of electronic points of sale.

And the Central Bank stated, last week, that “the exchange market in which the dollar is traded is a speculative market in a currency with a fixed price and purposes, and it is illegal trading, and it cannot be legalized, or announce exchange rates fabricated by speculators, and the competent authorities must stop the platforms and sites that use it.” It announces the exchange rates for a specific currency.

In order to address the phenomena that led to fluctuations in the exchange rates of the dollar, and to reduce the phenomenon of the illegal market, the Central Bank confirmed working with the government and relevant authorities to take a number of measures, including the use of merchants and importers of the channel established for that, through the electronic platform, to achieve the objectives of this system and prevent the use of The cash dollar is in the market for other than its purposes,

and this requires obligating this category to provide evidence that the amount of their imports has been duly transferred when their goods enter Iraq at the official border crossings, as well as motivating and supporting categories of merchants to enter the electronic platform by simplifying procedures, especially tax ones, and determining their ceilings in advance.

According to the categories, and deposited in the account of the General Authority for Taxes through its accounts in banks.

And in continuation of Al-Mukrazi’s efforts to curb unofficial exchange rates, the Deputy Governor of the Central Bank, Ammar Hamad, confirmed that “the Central Bank provides exchange companies with weekly quotas of dollars for the purpose of selling them to travelers at the official rate and in limited quantities of 3 thousand dollars per traveler,” noting that “these exchange companies It is licensed by the Central Bank in accordance with controls and is in compliance with the Anti-Money Laundering Law.

The financial expert, Dr. Nabil Al-Marsoumi, explained to “Al-Sabah” that the dollar, like any commodity, is affected by supply and demand, so the greater its scarcity, the higher its value, and this is an existing economic fact. The Central Bank has the right to take a decision to set an administrative rate for the official exchange.

The spokesman believes that “the issue of the parallel price cannot be overlooked, and we cannot attribute the latter to speculators, since the demand for dollars in the parallel market is mostly real demand, and it is related to two basic issues, the first is that not all Iraqi travelers are able to obtain the official dollar, especially The traveler to the countries sanctioned by America.

He added that the spending of Iraqi travelers for the year 2022 in Iran was about 3 billion and 410 million dollars, which is the largest spending among tourists, and constitutes 55 percent of the total foreign tourists, and they obtain this money from the parallel market because the central bank does not finance or sell travelers since 2018. These countries have the official price, and therefore this is a real demand, not an imaginary one related to speculation.

And Al-Marsoumi indicated that the second issue is related to the fact that the demand for dollars in the parallel market is for the purposes of financing trade with Iran, which is the largest part, with more than $10 billion annually representing imports, and a smaller amount with Syria.

Al-Marsoumi stressed that the Central Bank submitted a very important proposal to the border crossings to prevent the import of goods not funded by it, that is, not funded by documentary credits and bank transfers, pointing out that this decision, if implemented, would reduce the parallel price, as it closes an important window of demand. On the dollar from the parallel market in financing trade, and therefore the exchange rate of the two exchanges will be very close.

For his part, financial expert Hassan Abd confirmed to “Al-Sabah” that “achieving the stability of the exchange rate and making it at close levels between the official and the parallel requires transferring all transactions to the Iraqi dinar,” explaining by saying, “Here we will find that everyone will be convinced of the importance of the Iraqi dinar and there is no need for the dollar.”

He added, however, that this must be accompanied by tight working mechanisms, and that the dollar be available in the market without trouble.