Iraq Economic News and Points to Ponder Wednesday Evening 9-27-23
A Reading Of The Council Of Ministers’ Decision To Limit Contracts To Dinars.. Will It Change The Exchange Rate Or The Value Of The Contracts?
Economy |Today Baghdad today – Baghdad In a step that will not be applied to contracts after the decision of the Council of Ministers, but rather goes beyond its application “retroactively,” the Council of Ministers’ decision came to restrict the state’s contracts with companies, whether foreign or local, to the Iraqi dinar only, and to apply it even to old contracts, in a step that raised questions about its dimensions and effects. Whether on state contracts or on the exchange rate.
The Iraqi government and the Central Bank of Iraq continue to take various decisions and measures in an attempt to control the exchange rate of the dollar against the dinar, in a war that has been going on for 10 months, as exchange rates are witnessing an unprecedented rise due to illegal speculation, as described by the Central Bank of Iraq.
End DOLLARIZATION
The expert in economic and financial affairs, Nabil Al-Marsoumi, during an interview today, Wednesday (September 27, 2023), with “Baghdad Today”, explained that “the Iraqi government took many steps during the previous period, and is still working on new steps aimed at limiting local dealings to the Iraqi dinar.” Its last decision was to oblige state contracts executed inside Iraq to be in Iraqi dinars.”
He stated that “this step is aimed at ending the “dollarization phenomenon,” that is, restricting all transactions to the local currency. Of course, this matter has any impact on the issue of reducing or rising the price of the dollar in the local market, as this matter depends on the issue of finding solutions in order to work Legal and legitimate transfers to Iran instead of black transfers that are paid through various import funds.”
An Attempt To Strengthen The Dinar
For his part, a member of the Parliamentary Finance Committee, Moin Al-Kadhimi, said in his interview with “Baghdad Al-Youm” that “the Iraqi government wants, through such steps, to strengthen the Iraqi dinar and limit local dealings to the national currency, and this is what strengthens and strengthens the dinar, and this matter is followed and applied in all countries.” “It was accompanied by a strong economy.”
Al-Kadhimi stated, “Such a step will certainly contribute to the issue of reducing the exchange rate of the dollar in the local market. Such steps will reduce the need to demand the dollar, since dealing will be in the Iraqi dinar, and therefore the citizen will abandon the dollar as long as dealing is limited to the national currency, and this is the case for companies operating in the sectors.” governmental or private.
A “moral” step, but…does it change the value of the contracts?
Yesterday, Tuesday, the Council of Ministers decided, in a step towards financial and administrative reform, to commit to all state contracts executed inside Iraq being in Iraqi dinars, except for those opened by an external documentary credit, so they will be according to the agreement between the two parties and for the value of the documentary credit only.
While observers believe that this step will lead to an increase in the price of the dollar, based on the fact that the government will pay the dinar to companies, which in turn will look to buy and convert the money into dollars.
However, others underestimate the importance or extent of the impact of the step on the exchange rate, as the state will ultimately pay the dues of these companies and contracting parties in dollars by the Central Bank, as stipulated in the Council of Ministers’ decision, considering that this decision has only a “moral aspect” in favor of the dinar. That is, making the numbers on the contract papers in Iraqi dinars only, but the payment of companies’ dues will be in dollars and by the central bank directly.
Experts believe that this decision will have one negative side when any future change in dollar prices occurs, as the value of projects, especially those implemented for long years, will be valued in dinars according to the current exchange rate, and any change in the exchange rate by the state during the next few years will lead to… Change the cost of projects. Source: Baghdad Today LINK
Revealing Parliamentary Pressure To Legislate The Oil and Gas Law
A member of the Oil, Gas and Natural Resources Committee, Bassem Ngheimesh Al-Gharibawi, revealed that there is parliamentary pressure to legislate the oil and gas law within the House of Representatives.
Al-Gharibawi said in a press interview seen by “Taqaddam” that “there is a real intention among most of the political forces within the House of Representatives to legislate the law during the next semester.”
He added, “There is a real will to legislate the law in a way that preserves justice in the distribution of wealth among the oil and gas producing governorates.”
He pointed out that “the country needs to legislate the oil and gas law to end the dispute over oil wealth between the center and the region,” stressing that “there is parliamentary pressure to legislate it during the next legislative term.” https://takadum-news.com/archives/185249#hathalyoum
Parliamentary Integrity Opens The “Travelers’ Dollar” File And Warns Against Imposing Taxes On Citizens
Posted On09-27-2023 By Sotaliraq The Parliamentary Integrity Committee announced the opening of an investigation into the file of granting dollars to travelers due to suspicions of corruption, while warning of imposing taxes on citizens who received dollars from the electronic platform and did not travel.
Committee member Ahmed Al-Rubaie said, “The electronic platform for granting dollars to travelers has become a type of corruption, whether directly or indirectly,” noting that “there are many parties involved, starting with the Central Bank, considering the movement of funds issued by the bank, and the tourism companies that receive…
Passport and travel documents for the purposes of booking an airline ticket or travel visa, and banking companies that give dollars to people who are not travelling.”
He added, “We received many complaints from citizens who had travel tickets and visas but did not travel. As a result, the dollar was tampered with and the documents of these people were withdrawn from the travel platform.”
Al-Rubaie stated, “The Parliamentary Integrity Committee sent official letters to the Central Bank and the Integrity Commission for the purpose of conducting investigations in a transparent and high-level manner. This issue poses a danger to citizens who withdraw money in their names, and the taxes imposed on citizens may reach billions of dinars.”
The Rafidain State Bank decided on Tuesday to wait to sell dollars to travelers in some of its branches in Baghdad due to the Central Bank of Iraq not enhancing its share of the American currency. LINK
“An Anomalous Case”… Economic Criticism Of Dealing In The Dollar In Local Markets
September 26 19:07 Information/private.. Today, Tuesday, economic expert Hazem Hadi criticized the dealing in the dollar in local markets, while he considered this situation “an anomaly,” among the main reason behind the high exchange rate.
The economic expert, Hazem Hadi, said in an interview with the Maalouma Agency, “The market is governed by supply and demand. If demand exceeds supply, this will lead to a rise in the dollar, but the central bank will try gradually and by all means and methods to limit the unjustified rise.”
He added, “Limiting dealing in the dinar is important because it is the national currency,” considering dealing in the dollar internally “an anomalous case, since most countries deal in their local currency internally.”
The economic expert explained that “measures to limit dealing in the dinar internally will lead to reducing demand for the dollar, and as long as demand decreases, it will affect supply,” indicating that “the main problem is not internal demand, but rather external demand.”
He stressed the need to “reduce random and unjustified import operations, as most of the supplies of goods and services have no economic feasibility.”
Earlier, a member of the House of Representatives, Muhammad Al-Sayhoud, confirmed that “there are local internal agendas, as well as international forces, that insist on the dollar remaining at this height,” pointing out that “the dollar is a major project whose goal is to force the government to follow a path that these international forces desire.” “.
The series of rise in the dollar exchange rates in Iraqi markets is still continuing, 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. LINK
Points to Ponder on Exaggeration:
Some persons are exaggerators by temperament — They do not mean untruth, but their feelings are strong, and their imaginations vivid, so that their statements are largely discounted by those of calm judgment and cooler temperament — They do not realize that “we always weaken what we exaggerate” Tryon Edwards
Exaggeration is a blood relation to falsehood, and nearly as blameable –– H Ballou
Exaggeration as to rhetoric, is using a vast force to lift a feather; as to morals and character, it is using falsehood to lift one’s self out of the confidence of his fellowmen — Paget
There are some persons who would not for their lives tell a direct and willful lie, but who so exaggerate that it seems as if for their lives they could not tell the exact truth — Paget
Never speak by superlatives; for in so doing you will be likely to wound either truth or prudence — Exaggeration is neither thoughtful, wise, nor safe — It is a proof of the weakness of the understanding, or the want of discernment of him that utters it, so that even when he speaks the truth, he soon finds it is received with partial, or even utter unbelief — Hume