Iraq Economic News and Points to Ponder Monday Evening 9-18-23
The Dollar Is Exhausting The Dinar.. The US Treasury Scatters Government Reforms And The Central Bank Negotiations “Fail”
Information / private.. The series of rising dollar exchange rates in Iraqi markets continues, amid conflicting opinions about the real reasons that led to the exhaustion of the local currency again, especially as it began to rise to levels that warn of a great danger to the country’s economy.
Despite the many reasons, the timing of the visit of the US Assistant Secretary of the Treasury to Iraq and the meeting of the US delegation with the Governor of the Central Bank, and the subsequent significant rise in prices, raises controversy and questions.
Today, Monday, the dollar exchange rates witnessed a significant rise in the Iraqi markets, reaching more than 158 thousand dinars for every 100 dollars, amid fears that this rise will continue.
“Political file”
The economic file is perhaps more important than politics and what is happening in it, and it is the aspect that is focused on to thwart any government if it achieves successes and is able to get closer to the people.
Former member of the House of Representatives, Fadel Al-Fatlawi, considered the issue of the rise in the dollar exchange rate in local markets “purely political,” in relation to the relationship of the visit of the US Assistant Secretary of the Treasury to the rise of the dollar.
Al-Fatlawi said, in an interview with the “Al-Ma’louma” agency, that “the rise in the dollar exchange rates in the local markets inside Iraq is a political file to put pressure on Muhammad Shiaa Al-Sudani,” pointing out that “the government is serious about reducing the exchange rate, especially since it approved the amount of 132 thousand for every 100 dollars.” .
He adds, “There is a large financial reserve with the government, in addition to the large financial habits achieved from selling oil prices in global markets, all of which contribute to securing the Iraqi economy and maintaining the stability of the price of the local currency.”
The former MP explains that “this pressure is being exerted on the government in agreement with the US Federal Bank,” suggesting that “prices will decline in the coming days.”
Al-Fatlawi explains, “The visit of the US Assistant Secretary of the Treasury to Iraq, in addition to the sanctions imposed on some banks, are all factors that caused the exchange rate to rise to these levels.”
“America’s role”
The visit of US Assistant Secretary of the Treasury, Elizabeth Rosenberg, to Iraq scattered all the papers and reforms that the government was able to undertake during the previous period, and this was not to the liking of the American side, which imposed a new condition that led to prices rising again.
In turn, a knowledgeable economic expert revealed the main reason behind the continued rise in the dollar exchange rates in Iraqi markets, while he considered the Central Bank’s negotiations with US Treasury assistance “not successful.”
The expert stated, in an interview with the “Al-Ma’louma” agency, that “the rise in the dollar exchange rates in the Iraqi markets came as a result of the recent decision of the Central Bank of Iraq, which stipulated reducing cash sales to exchange companies of various types by half, which was implemented since yesterday.”
He points out, “The companies that used to get two million now have only one million, for example,” noting that “this decision will lead to a large deficit in the local markets, because the exchange companies’ sales go in parallel.”
The economist (who preferred to remain anonymous) confirms that “the decision to reduce the sales of exchange companies was taken at the request of the US Secretary of the Treasury during her visit to Baghdad.”
The expert continues, “The central bank negotiations with the American side were certainly not successful, and the evidence for this is the lack of control over the rise in exchange rates.”
If the Iraqi economy wants to get rid of American hegemony, it must think about radical solutions that are far from a rentier economy and complete dependence on oil. Considering that all of the country’s financial revenues come through this resource, whose money goes to the US Federal Bank, which allows the country’s economy to be managed instead of the government. LINK
An Economic Analysis Of The Reasons For The Rise In The Exchange Rate In Iraq.. This Is America’s Role
Information/private.. Today, Monday, an informed economic expert revealed the main reason behind the continued rise in dollar exchange rates in Iraqi markets, while he considered that the Central Bank’s negotiations with US Treasury aid “were not successful.”
Follow the “Al-Ma’louma” channel on Telegram.. News that does not require documentation..
The expert said, in an interview with the Maalouma Agency, that “the rise in the dollar exchange rates in the Iraqi markets came as a result of the recent decision of the Central Bank of Iraq, which stipulated reducing cash sales to exchange companies of various types by half, which was implemented since yesterday.”
He added, “The companies that used to get two million now have only one million, for example,” noting that “this decision will lead to a large deficit in the local markets, because the exchange companies’ sales go in parallel.”
The economist (who preferred not to reveal his name) stated that “the decision to reduce the sales of exchange companies was taken at the request of the US Secretary of the Treasury during her visit to Baghdad.”
The expert stated, “The central bank negotiations with the American side were certainly not successful, and the evidence for this is the lack of control over the rise in exchange rates.”
Today, Monday, the dollar exchange rates witnessed a significant rise in the Iraqi markets, reaching more than 158 thousand dinars for every 100 dollars, amid fears that this rise will continue.
Earlier, the Governor of the Central Bank of Iraq, Ali Mohsen Al-Alaq, discussed with the Assistant Secretary of the US Treasury, Elizabeth Rosenberg, bilateral relations and discussed the measures taken in the field of combating money laundering and terrorist financing. LINK
Al-Hakim: The Tripartite Budget Will Turn Iraq Into A Workshop With The Opportunities And Projects It Provides
09-18-2023 | 787 views Al-Sumaria News – Local News The head of the National Wisdom Movement, Ammar al-Hakim, confirmed today, Monday, that the tripartite budget will turn the country into a workshop due to the capabilities it provides.
Al-Hakim’s media office said in a statement received by Al-Sumaria News, “The head of the National Wisdom Movement, Ammar al-Hakim, met with the new British ambassador, Stephen Hitchen, wishing him success in his diplomatic mission in Iraq.”
Al-Hakim reiterated “the importance of Iraq’s openness to its regional and international environment and its desire and endeavor in this direction, in a way that achieves the interests of its people,” pointing to “the nature of the changes taking place in the Iraqi arena.”
He pointed out that “the tripartite budget will turn the country into a workshop by virtue of the capabilities, opportunities, and service, urban and development projects it provides,” stressing “the necessity of preserving Iraq’s stability as it is in the interest of regional and international stability.”
Al-Hakim stressed “the importance of reforming the administrative reality in the country, as it has suffered from overlapping and regression of laws, which requires modernizing it and updating the laws in line with the challenges and opportunities available.” LINK
Monetary Policy Succeeds In Fueling Foreign Trade And Controlling Remittances
Economical 09/18/2023 Baghdad: Shukran Al-Fatlawi Specialists in economic affairs praised the monetary policies that led to Iraqi banks’ compliance with the requirements of the electronic platform, which led to the control of external dollar transfer operations, stressing that the rise in the parallel exchange rate no longer significantly affected the prices of goods and materials in local markets. This is due to the success of remittances passing at the official exchange rate to feed foreign trade at a rate of approximately 90%.
The exchange rates in the parallel market witnessed a noticeable increase, exceeding the barrier of 156 thousand dinars per 100 dollars, mainly resulting, according to economic affairs specialists, from the presence of large trade with Iran and Syria, “which are banned from external transfer,” financed with the parallel dollar, indicating that this trade exceeded during Last year, it crossed the 10 billion mark.
Economic affairs specialists confirmed to Al-Sabah the day before yesterday that the reasons for the dollar’s rise are due to “hypotheses” unleashed by beneficiary speculators and are supported and promoted by many economic or political analysts for several reasons, indicating that there is a link between the rise in the exchange rate and The dollar and the sanctions imposed on banks, and this link came as a result of traders and some people benefiting from “economic analysis.”
Economist Dr. Nabil Al-Marsoumi said during his speech to “Al-Sabah” that “the great efforts made by the monetary authority, since the launch of the electronic platform, succeeded in bringing Iraqi banks into compliance with the rules and requirements of that platform,” indicating that this compliance is positive and led to an increase in the sales of the Central Bank of Iraq to About $200 million a day.”
Al-Marsoumi believes, “Despite the success of the platform’s trends in passing bank transfers to more than 80 percent, and increasing the proportion of trade on this platform to about 90 percent, the gap is still large between the official and parallel prices of the dollar in the Iraqi market, pointing out that this The gap today amounts to about 20 percent, indicating at the same time that the greater the ability of the Central Bank to tighten control over the electronic platform, the greater the scarcity of the dollar in the Iraqi market and thus the higher its price.
According to the economist, the gap today is linked to an external variable, not an internal one, and is also caused by the presence of large trade with Iran and Syria financed with the parallel dollar, as these imports last year 2022 amounted to about 10 billion and 300 million dollars, and this trade cannot be financed through bank transfers via the platform. Electronic because Iran is subject to US sanctions.
He pointed out that this shows the need to pay Iranian merchants’ dues for their non-oil commodity exports to Iraq. Therefore, there has been pressure on the dollar in the parallel market, and the dollar is being smuggled to pay for real trade existing between the two countries. In addition, Iraqi travelers to Iran constitute about 55 percent of tourists.
Foreigners, who spent in the year 2022 an amount of three billion and four hundred million dollars, and therefore, these travelers are deprived of obtaining the dollar from the official market because Iran and Syria are among the punished countries and therefore are not allowed to obtain the dollar at the official price, so they resort to purchasing from the parallel market, which is This constitutes an additional pressure on the dinar.
Al-Marsoumi pointed out that the ideal and realistic solution is to give Iraq an exception by financing its imports from Iran through bank transfers.
On the same level, foreign remittances increased at the Central Bank’s auction yesterday, Sunday, by 85% at the expense of cash sales, to reach $171 million.
It is noteworthy that “the Central Bank sold, during its auction for buying and selling the US dollar yesterday, 197 million and 538 thousand and 76 dollars, which the bank covered at a base exchange rate of 1,305 dinars, per dollar for documentary credits and international settlements for electronic cards, at a price of 1,310 dinars per dollar for external transfers, and at a price of 1,310 dinars per dollar.” dollars in cash.
The bank’s dollar sales went to enhance balances abroad in the form of (transfers, credits), which amounted to 158 million, 274 thousand and 625 dollars, an increase of 85%, compared to cash sales of 25 million and 610 thousand dollars
.It is noteworthy that the number of banks that purchased cash dollars reached 7 banks, while the number of banks that responded to requests to enhance balances abroad reached 19 banks, while the total number of exchange and brokerage companies participating in the auction was 52 companies.
https://alsabaah.iq/84162-.html
Points to Ponder on Experiences:
When I was young, I was sure of everything; in a few years, having been mistaken a thousand times, I was not half so sure of most things as I was before; at present I am hardly sure of anything but what God has revealed to me – John Wesley
No man was ever endowed with a judgment so correct and judicious, but that circumstances, time, and experience would teach him something new, and apprise him that of those things with which he thought himself the best acquainted, he knew nothing; and that those ideas which in theory appeared the most advantageous were found, when brought into practice, to be altogether impracticable – Terrence