Mon. AM TNT News Articles 10-4-21



Iraq telling the world and it’s people there are now fully sovereign internationally

Tahrir Square lights up the sky of Baghdad on Sovereignty Day (photos

Shafaq News / The Baghdad Municipality organized, on Sunday evening, large celebrations in Tahrir Square in the center of the capital, on the occasion of the Iraqi National Day, which included launching fireworks and distributing Iraqi flags among citizens.

And the third of October is the anniversary of Iraqi independence in 1932, as well as the day of recognition of Iraq’s sovereignty in international forums and taking its place as a fully qualified member of the League of Nations.

The Baghdad and Erbil governments announced, two days ago, the suspension of official working hours on Sunday, to celebrate this occasion.

.a beautiful Iraq fireworks.jpg

Iraqi banks acquire 99% of government bonds

A government source said, on Monday, that most of the bonds offered by the government are bought by banks through their cash reserves with the Central Bank of Iraq, while citizens are satisfied with only one percent of those bonds.

From time to time, the Central Bank issues bonds in favor of the Ministry of Finance, for the purpose of financing some public expenditures, as it recently issued construction bonds in denominations of 500 thousand dinars and one million dinars.

The source told Shafak News Agency, “The banks use the mandatory cash reserve at the bank, which ranges between 35 to 40% of its capital of 250 billion dinars, for the purpose of purchasing the bonds offered by the government through the Central Bank.”

The source added, “99% of these bonds are bought by banks and one percent is bought by the citizen,” noting that “buying bonds by banks achieves great profits for them through the high interest offered, and the amounts that banks buy for these bonds are frozen with the bank as a reserve. You will drive it by buying these bonds.”

The source noted, “The government issues bonds from time to time due to its lack of financial liquidity to finance public expenditures,” noting that “the government owes the Central Bank more than 21 trillion dinars as a result of borrowing funds during the last period to cover employee salaries and other expenses.”  link

Adviser: Iraq’s public finances depend on oil revenues by about 93%Adviser: Iraq’s public finances depend on oil revenue

The economic and financial advisor to the Prime Minister, Mazhar Muhammad Salih, said that the reform of the economy starts with the non-oil financial sectors, noting that the administrations are unable to collect or manage funds for the benefit of the state treasury, while warning against optimism about the rise in oil prices.

Saleh said in a statement to the independent newspaper, Al-Sabah, that “public finances depend on oil revenues by about 93%.”

He added, “There is an energy crisis in the world, with both positive and negative dimensions. The positive is the possibility that the price of a barrel of oil will reach $100, and this is not strange because Iraq has previously sold a barrel of oil for $143.”

And he indicated that “the negative thing lies in the escalation of energy prices, which generates inflation in the world, as the prices of food and other commodities are likely to rise dramatically, which may lead to a global recession, so the stability of the economic situation is very important.”

Salih stressed that “the oil returns are good, and in the event that the expenses of the general budget are adhered to and controlled with the improvement of crude prices, the financial situation of Iraq will be sustainable.”

He pointed out that “there is a problem in how to control public expenditures, so adopting the spending ceiling in the 2022 budget to be similar to the current year, will move the country to a financially comfortable position and will almost eliminate the deficit, and some abundance will be achieved to transfer it to investment projects.”

Salih warned against “excessive optimism about the rise in oil prices, so this matter must be invested in an optimal manner, especially since Iraq has fixed consumption expenditures, which are the salaries of employees and retirees.” 

He pointed out that “reducing spending has become at the expense of the investment budget, and thus the number of unemployed has increased and employment opportunities have decreased, and this is a big problem that we are facing,” explaining that “non-oil revenues are a problem in itself because of what he described as (institutional chaos), as the administrations do not have the ability to To collect and not to manage funds for the benefit of the state treasury, and solving this matter is very difficult and takes a long time as well.  link

Exchange rate hymn (10/4)

With the escalation of the electoral campaigns, the hymn of returning the exchange rate to what it was in accordance with the requirements of mobilizing votes related to the citizen’s livelihood escalated, and the rhythm of this hymn is based on the failure to achieve the declared goals of this Action. 

Competitiveness was the slogan and the declared goal of this step, which was approved in the white paper and then in the budget law for the year 2020, as well as the protection of cash reserves by limiting the flow of hard currency, through the Central Auction under the pretext of financing foreign trade, but some of the forces and political figures see

{The reasons for this decision have been negated after the disappearance of all the justifications for taking it through the high sales of the Central Bank of hard currency in the currency auction and the swinging of mechanisms to protect the local product, after opening the import of a number of goods and merchandise from time to time, the last of which was the opening of the import of table eggs.} 

While the concerned government agencies confirm that this measure contributed to controlling the expenditures that were reflected in the state’s revenues, after oil prices fell during the escalation of the repercussions of the Corona pandemic, and the state’s safe exit from the difficult economic situation. And it is a necessary reform measure in the context of a process of change to reform the entire economic system, with the aim of creating a balance between oil and maximizing other resources, through a competitive environment that guarantees the local product to confront the importer.

Between these two views, the inflation rate increased by 8.1% compared to August 2020, based on the measurement of 333 items, goods and services.

Here, the voter has the right to wonder about the meaning of competitiveness without the presence of a base of small and medium-sized enterprises, which contribute to covering the local demand for 333 items, goods and services linked directly or indirectly to foreign imports, which means the urgent need for the existence of such projects and others In order to support the economic reform process, as financial reform cannot be isolated from the total reform in the economic system, the executive apparatus and the labor market.

Otherwise, high inflation rates will contribute to more deflation, which may lead to more economic and security problems, as well as to devote the activities of the economy.

 Shadow illegal and shrouded in a lot of negative manifestations under the umbrella of confusion.Which makes the defense of this measure deficient in legitimacy unless accompanied by reform in the overall system, while the hymn of return at the exchange rate is void unless its rhythm is linked to a scientific alternative that presents the treatments in a clear program, away from the market  Bids.  link

Source: Dinar Recaps


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