______________________________________________________
TNT
Harambe:
Wild Currency Ride Shows Signs of Settling Down in Zimbabwe | Bloomberg
(9/15/22)
Zimbabwe’s volatile currency is showing signs of stabilising, with the gap between the official and parallel-market exchange rates narrowing and raising hopes runaway inflation may cool.
“We have basically converged with an acceptable premium between the alternative and interbank rates,” Persistence Gwanyanya, a Harare-based economist and a member of the Reserve Bank of Zimbabwe’s monetary policy committee, said. “The markets are at equilibrium.”
The government has unveiled a raft of measures since May — including a new interbank rate, gold coins, legalising the use of the US dollar and a brief ban on bank lending — to try halt a decline in the value of the local unit that helped spur inflation to 285% in August.
While the Zimbabwe dollar is the world’s worst-performing currency this year — slumping more than 80% against the greenback — the even-larger collapse of its value on the street has reversed.
The latest interbank rate is $604 per dollar, with businesses allowed to add a 10% mark-up in pricing goods and services. That brings it in line with the parallel market spread of between Z$650 and Z$700 per greenback.
Advertisement
______________________________________________________
With the currency markets stabilising, the central bank now expects businesses to begin cutting prices, Gwanyanya said.
“It is inescapable,” he said. “The next wave is that of price reductions and that will cement the stability.”
Still, the central bank won’t rush to cut its key interest rate, currently the world’s highest at 200%.
“An earlier softening may result in reversal of gains,” according to Gwanyanya.
It’s also unclear whether some of the measures imposed to bring the exchange rates in line are sustainable, given they will restrict economic activity and elections are due next year, according to Lloyd Mlotshwa, head of research at IH Securities, a Harare-based brokerage firm.
“The convergence has been achieved by punitively constricting local-currency liquidity, that is by stopping government contract payments, increasing interest rates to 200% and taxes on capital markets,” he said.
Economist Eddie Cross said once the government begins paying its suppliers and contractors, the parallel market rate will escalate.
Advertisement
______________________________________________________
“The current shortfall of domestic supplies of local currency has been due to the measures adopted by the government where the government has halted payment to suppliers of services and goods. The government has also tightened up money supply through the reserve bank.
“This has resulted in the shortage of local currency and the electronic currency. This has had an immediate effect on slowing down speculation in the Zimbabwe dollar against the US dollar (US$) and as a result the local currency has strengthened on the parallel market. “However this is not going to be long lived, the government has to return to meeting its obligation of paying contractors and suppliers, and it is in the process of doing that. Once these payments resume we are going to see a resumption of activity on the parallel market for the local currency.
“The only serious solution to this problem is to liberalise the market for the local currency. This will, in fact, provide a long term solution to the problems we are confronting. Anything else, we are just dealing with the symptoms and not the fundamentals.”
Tishwash:
Government advisor: 25 trillion dinars surplus with the Finance
Haitham al-Jubouri, technical advisor to the Prime Minister, said that the increase in the Iraqi reserve was not reflected on the citizen because it needs a budget in order to convert these amounts into projects and services, while he suggested that the financial surplus would reach 25 trillion dinars at the end of this year.
Al-Jubouri said that “the growth in the Iraqi economy is the result of high oil prices,” noting that “the Federal Court’s decision regarding the inability of the caretaker government to send projects and laws delayed sending the budget to Parliament.”
He pointed out that “in 2021, the value of non-oil revenues amounted to 10 trillion Iraqi dinars,” while he predicted that customs revenues would reach “four times the current.”
He added, “The financial surplus may reach 25 trillion dinars by the end of this year,” noting that “
Regarding those covered by social care, Al-Jubouri said, “9 million people are covered by social care, that is, up to one million and 800 thousand families.”
Advertisement
______________________________________________________
On inflation, he stressed that “the change in the exchange rate increased the inflation rate, as the inflation rate doubled 11 times.” link
Oil pushes Iraq’s cash reserves to a historic high
Iraq ‘s foreign currency reserves witnessed a big jump to more than 85 billion dollars, amid optimism that the rise will continue until the end of this year reaches 100 billion dollars.
According to observers, the rise of the cash reserve is due to several factors, most notably the rise in oil prices in global markets, which reflected positively on the country’s financial revenues, in addition to decreasing the value of the Iraqi dinar, which reduced the value of the government’s monthly salaries, but they warned of the negative effects of the turmoil. Political influence on the country’s revenues if it continues for long periods.
The Central Bank of Iraq had recently announced that its foreign currency reserves had risen to more than $85 billion.
“The country’s reserves have reached the highest level achieved by the central bank since 2003,” a central bank statement said, referring to the year the United States occupied the country. The statement added that “gold reserves exceeded 130.4 tons, with a value of 7 billion dollars, bringing Iraq to the thirtieth place globally and fourth in the Arab world.”
Commenting on this, the former advisor to the Central Bank of Iraq, Ali Al-Tamimi, said in a telephone conversation with Al-Araby Al-Jadeed that Mustafa Al-Kazemi’s government implemented a package of major reforms in conjunction with the rise in global oil prices, as Iraq’s monthly income reached nearly 11 billion dollars from selling Crude Oil.
Al-Tamimi added that the reduction in the value of the Iraqi dinar against the dollar, which was taken by the Al-Kazemi government, contributed to a clear reduction in the revenues that the state needs to secure salaries to 4 billion dollars or less, which previously amounted to approximately 6 billion dollars per month (before January 2021). .
He added that the government’s resort to imposing dealing in local currency with Iraqi and foreign private sector companies operating in the country, and the imposition of strong filters on the issue of transferring money in hard currency, contributed to raising Iraq’s ability to keep its hard currency more than before.
He added, “However, it is still possible to control more hard currency and prevent its leakage abroad, as the hard currency auction organized by the Central Bank daily presents an average of $180 million and up to $200 million, as part of the policy of maintaining the dinar exchange rate at the threshold of 1450.” dinar per dollar, and this method can be considered ineffective and another policy to determine the exchange rate must be considered.
Advertisement
______________________________________________________
Al-Tamimi concluded that the country is expected, in the event of continuing with the current oil prices, that its reserves will rise to about 100 billion dollars, which is a sufficient number to think about establishing a sovereign fund, as in many countries, that will be a guarantor in the suffocating financial crises, especially since Iraq is a rentier state that depends on its economy oil by more than 96 percent.
The Iraqi Finance Minister, who resigned last month, Ali Abdul Amir Allawi, had expected the country’s hard currency reserves to rise to more than 90 billion dollars this year, due to the recovery in oil prices
Iraq recorded a sharp decline in foreign currency reserves in December 2020, to reach 48 billion dollars, but it rose again to reach the end of the year 2021 about 64 billion dollars, according to central bank data.
The country was affected economically by the political crisis that has continued for 11 months in a row, as the formation of the government was prevented from approving the financial budget for the year 2022, amid warnings that the country would enter the new year without a draft budget.
The current government, headed by Mustafa Al-Kazemi, relies on the system of advances in the payment of employee salaries and operational budgets related to services.
Earlier, the Iraq Future Foundation, which is concerned with economic affairs, said that there are “fears that the general budget for the year 2023 will not be approved.”
The head of the foundation, Manar Al-Obaidi, told reporters that “there is a real fear that the general budget for the year 2023 will not be approved, due to the current political crisis. There is no budget without forming the government.
Al-Obaidi indicated that “the food security law ends with the end of the current fiscal year, and next year it will depend on the financial management law,” noting that “there is a fear that there will be no budget during the year 2023.”
Last month, Parliament Speaker Muhammad al-Halbousi warned that the state would not be able to spend the money at the end of this year, which would lead to the suspension of people’s interests due to the political crisis and the disruption of Parliament’s work, which led to the absence of a financial budget for the current and next years.
Al-Halbousi said in a speech in Baghdad: “I call on the political forces to sit at a dialogue table that will find solutions to the political crisis,” reiterating his “support for the national dialogue initiative.”
Advertisement
______________________________________________________
He added, “The country’s situation cannot continue in this state, and what we have reached today represents a regression from what we were on,” noting that “the end of this year the government cannot spend any money without a budget.”
He continued, “A political team disrupts state institutions through peaceful demonstrations, explaining that the constitution does not allow for state institutions to be disrupted. link
Source: Dinar Recaps
Tishwash:
Venezuela is ready to supply the world with oil and gas
This was in Iraq’s news
Venezuelan President Nicolas Maduro said on Wednesday that his country is “ready to supply the world market” with oil and gas , condemning the energy crisis caused by imposing “irrational” sanctions on Russia , he said, after its invasion of Ukraine.
During a visit to Caracas by the Secretary-General of the Organization of Petroleum Exporting Countries (OPEC) Haitham Al-Ghais , Maduro said that “Venezuela is ready and willing to play its role and supply the oil and gas market that the global economy needs, in a stable and secure manner.
He stressed that his government had “reformed” its oil industry, whose production had fallen to historic levels after years of withdrawal of investments and lack of maintenance, noting that Venezuela’s production is currently about 700,000 barrels per day, compared to 2.3 million barrels in 2002.
The United States imposed a series of sanctions on Caracas in 2019, including an embargo on Venezuelan oil, after Maduro was re-elected in 2018 for a second term in a vote boycotted by the opposition.
Maduro condemned the “energy crisis” resulting from the sanctions imposed on Russia, which he described as “illogical and unjustified”, and called for a “fair and balanced price” of $100 per barrel
Advertisement
______________________________________________________
He again called on foreign oil companies to produce in Venezuela, adding: “We are ready to gradually and rapidly increase oil production to expand and increase production of refined products.”
“Venezuela has more than 50 first-class gas projects with seismic studies conducted and all legal guarantees so that international investors” can attend “to produce gas in Venezuela and transport it to international markets,” he said.
Al-Ghais: “OPEC” is facing the most serious challenges since its establishment 62 years ago
For his part, the Secretary-General of OPEC said that the organization faces “the most dangerous and most serious challenges” since its inception 62 years ago
The administration of President Joe Biden announced in May a limited easing of some of those sanctions, a move that came as energy prices soared due to the war in Ukraine.
Russia, Europe’s largest supplier, has sharply reduced its gas deliveries, raising fears of gas shortages and price hikes. link
Source: Dinar Recaps
______________________________________________________
If you wish to contact the author of any reader submitted guest post, you can give us an email at UniversalOm432Hz@gmail.com and we’ll forward your request to the author.
______________________________________________________
All articles, videos, and images posted on Dinar Chronicles were submitted by readers and/or handpicked by the site itself for informational and/or entertainment purposes.
Dinar Chronicles is not a registered investment adviser, broker dealer, banker or currency dealer and as such, no information on the website should be construed as investment advice. We do not support, represent or guarantee the completeness, truthfulness, accuracy, or reliability of any content or communications posted on this site. Information posted on this site may or may not be fictitious. We do not intend to and are not providing financial, legal, tax, political or any other advice to readers of this website.
Copyright © Dinar Chronicles
