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Tishwash:
Economist: The Recovery Of Oil Prices Is A Justification For Restoring The Dollar Exchange
The economic expert, Nabil Jabbar Al-Ali, expected, on Wednesday, a jump in oil prices in the coming days, after stabilizing the threshold of 75 dollars, stressing that the recovery of oil prices is a justification to reconsider the exchange rate of the dollar.
Al-Ali said in a statement to “The Information” that “the dollar’s exchange rate depends on a fixed price policy that is not linked to the global economy,” noting that “the duty of pure monetary policy is to maintain stability and try to stimulate economic indicators within the country through per capita income, as well as the poverty rate and the indicator the prices”.
He added, “The Central Bank is primarily responsible for monetary policy in partnership with the Ministry of Finance, as well as the Ministry of Planning and the Economic Councils, and they must reconsider the dollar exchange rate, especially since this change came based on the requirements of the government’s deficit in the year 2020.”
Al-Ali pointed out that “the current government is currently facing an economic well-being that may rise in oil prices in the coming days,” stressing “the need to invest the surplus from oil revenues in economic projects. link
Iraq raises its holdings of US bonds by nearly one billion dollars
The US Treasury announced, on Wednesday, that Iraq’s holdings of US bonds increased by nearly one billion dollars during the month of last November.
The Treasury said in a table seen by Shafak News Agency, “Iraq’s possession of US Treasury bonds for the month of November increased by 874 million dollars, or 4.29%, to reach 21.238 billion dollars, after it was 20.364 billion dollars last October, indicating that” this Bonds also rose from the same month last year 2020, when Iraq’s holdings of bonds amounted to $19.8 billion.
She added that “Iraqi bonds, including long-term guarantees amounting to 9.088 billion dollars and short-term guarantees amounting to 12.150 billion dollars,” noting that these bonds represent 0.3% of the world’s bonds.
In the Arab world, Saudi Arabia comes at the forefront of the most possessing countries, with an amount of 115.2 billion dollars, followed by the UAE with 48.83 billion dollars, Kuwait third with 45 billion dollars, then Iraq fourth, Oman fifth with 5.4 billion dollars, then Morocco with 3.7 billion dollars.
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She pointed out that “the most countries in possession of US bonds are Japan, with a value of 1.340 trillion dollars, followed by China, with 1.080 trillion dollars, followed by Britain, with 621 billion dollars, and then Luxembourg with 334 billion dollars.” link
reviews the negative effects of the delay in approving the budget
Almost every year, Iraq suffers from the dilemma of delaying the approval of the budget for several reasons, including political and electoral or financial ones, which leads to the impact of the citizen, whether employee or earner, and the Iraqi market as a whole, which prompted experts to submit proposals, most notably passing the budget during the month of October Or the second and its division, ie, the adoption of a supplementary budget in the middle of each year.
This comes at a time when the financial advisor to the Prime Minister, Mazhar Muhammad Salih, expected that the 2022 budget would amount to about 140 trillion dinars.
Saleh told Al-Sabah: {According to the Ministry of Finance, the price of a barrel of oil in the 2022 budget has been set at $50, and the value of the budget may increase by 10 percent over last year, that is, up to 140 trillion dinars, and a hypothetical deficit that may be similar to the deficit in the year’s budget. 2021, which amounted to 29 trillion dinars.
tunnel ceiling
He added that {Iraq sold in 2021 a barrel of oil at an average of $68 and a half dollars, but the non-oil revenues achieved only 50 percent of their estimates, so the decrease in non-oil revenues also caused a deficit in the budget, but it was compensated by the high oil prices}, Noting that {if the average annual sale of a barrel of oil is approximately $71 to $72 in the current year 2022 with a spending ceiling similar to the year 2021, then {Iraq will be in a balanced situation even if the non-oil revenues are few}.
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revenue stream
Regarding the impact of the delay in approving the budget, Saleh said: {The Iraqi economy depends on oil rents, whether there is a budget or not, and there are continuous financial flows for economic life in Iraq.
The delay in approving the budget this year came for constitutional reasons related to the elections, which regulates financial life now is The law of financial management on the basis of the exchange of inflowing revenues equivalent to (1/12) of the actual continuous expenditures from the past year (such as salaries, debts, ongoing projects, etc.), which is considered a safety valve, after saying:
The optimal solution for the country’s economy depends on the legislation of the budget that draws prospects for the entire fiscal year, as investors and the trends of the private sector depend on it, and the overall economic situation is based on the issuance of the general budget, its expenditures and its revenues, especially that government public spending constitutes 40 percent of the gross domestic product. This is directly or indirectly, reaching 80 percent, and it is considered important in the lives of citizens.”
economic vision
The financial advisor continued: {When there is no budget, the objectives of the economic policy in the country will be unclear and unknown.
The general budget is an economic vision for a full year, and there is an investment budget in which new projects, investment opportunities, and new programs for ministries are all suspended due to the lack of legislation of the budget law}, pointing out To {All developments have stopped, including administrative promotions and opportunities for basic appointments, as well as the basic rights on which people’s lives are held in budget legislation. New projects, as there is no implementation of strategic projects and new programs, then unemployment will spread and the poverty rate will increase.”
He pointed out that {in the event that the regular parliament sessions begin and the financial and economic committees are formed, the first law they will legislate is the budget law}, suggesting {it will not be approved in the first quarter of the year. Present}.
In a related context, the financial expert Thamer Al-Azzawi suggested setting the month of October or November as a fixed date for approving the budget to put an end to the delays that occur almost every year.
Supplementary budgets
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Al-Azzawi told Al-Sabah: {Supplementary budgets must also be approved in the middle of each year, to avoid any errors or make amendments to the general budget law}, noting that {this step is important amid fluctuations in crude oil prices and to address any emergency matters that may occur.}
He believed that {the delay in approving the budget means that the Iraqi market will be paralyzed, especially if it is delayed after February, as the effects of that begin to appear, as there are no new projects, no money injections, no loans, advances, or purchases},
Noting {the employees are affected by the delay as well, as their promotions, bonuses and rewards, as well as providing for their needs to run Business}. link
Source: Dinar Recaps
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