Iran’s New Central Bank Chief Says ‘Economic Indicators Improving’
The new chairman of the Central Bank of Iran (CBI), amid a serious economic crisis, said Friday that macroeconomic indicators show signs of improvement.
Mohammad-Reza Farzin, appointed last week, did not explain which economic indicators show improvement. His predecessor was sacked because of a serious financial and currency crisis.
The Iranian rial has lost 50 percent of its value since mid-2021 and 30 percent this year, raising fears of higher inflation. Iran’s annual inflation rate is al,ost 50 percent, with food prices averaging 78 percent increase in the past 12-month period.
The financial crisis comes at a time of antigovernment protests, instilling anger among the population impoverished in the past five years after the United States imposed sanctions on Iran’s economy.
Farzin was speaking at his first meeting of a government outfit called “Headquarters for Economic Information and Propaganda” established in 2018 to fight against “psychological warfare” in markets. Iranian officials often blame poor economic performance on “enemy” conspiracies.
Farzin strongly intervened in the currency market on December 31 as the rial sank to 440,000 to the US dollar last week. The amount of foreign currency injected into the market was kept secret, but the rial regained close to 10 percent of its value but remained at almost an all-time low of 400,000 to the US dollar. Subsequent interventions only had a temporary impact.
The rial has been steadily losing value since the Islamic Republic was established in 1979, when the dollar equaled just 70 rials. link
The anger of the Iraqi street: the decline of the dinar fuels the high prices in the markets
Iraqi society lives in a state of anticipation and anxiety, amid the contraction of economic activities, due to the instability of the exchange rate of the dinar against the dollar and the escalation of speculation, which negatively affected the instability of the market movement, with the rise in the prices of commodities and consumables, in addition to the impact of that rise on the increase in poverty rates according to The latest statistics of the Iraqi Ministry of Labor and Social Affairs indicate 25 percent of the total population.
The exchange rate of $100 reached more than 155,000 Iraqi dinars, an increase of about $3 (equivalent to 4,500 dinars) over the official exchange rate approved by the Central Bank of Iraq, while fears are growing that the rising crisis will continue to increase merchants’ losses due to stagnation and increased unrest. Social, including the rise in suicides due to the deterioration of the economic and living situation to more than 700 cases, according to the Strategic Center for Human Rights in Iraq.
The Al-Shorja market in central Baghdad is one of the largest major markets in Iraq, and it includes a large number of the largest merchants in the country.
New changes to the dollar exchange rate.
Trader Qais Abdul Karim says that they have incurred great losses due to the high exchange rate of the dollar against the dinar, the stagnation that has occurred, and the shrinking percentage of sales compared to previous periods, in addition to the difficulty in obtaining hard currency to cover import expenses due to the control of influential parties that carry out speculation operations. Abdel Karim added to The New Arab that the rise in the exchange rate of the dollar was directly reflected in the prices of commodities and basic and luxury materials, which created fear and caution among consumers that prices would continue to rise further.
Abdul Karim reveals that a number of merchants were exposed to health crises as a result of the great shock and material losses they received due to the sudden rise in the dollar exchange rate. The impact of the rise of the dollar against the dinar was not limited to merchants and the market only, but was reflected in a deterioration in the lives of citizens and their social reality.
In an interview with Al-Araby Al-Jadeed, social researcher Wali Al-Khafaji said that the huge inflation in the market, along with the fixed salaries of state employees in the local currency, and the high unemployment rate, have greatly affected the citizen’s living conditions, and his inability to meet his basic needs. Al-Khafaji explained to Al-Araby Al-Jadeed that there are basic requirements that the Iraqi family needs. Among the costs of alternative electricity (civilian generators), wages for children’s education, food and transportation, all of which are essentials that the Iraqi citizen has become unable to meet their expenses.
He explains that the citizen’s inability to meet the family’s requirements has increased social problems, as the rates of divorce, drug abuse, selling human organs, and family quarrels have increased, which led to deliberate killings, stressing that many suicides occurred due to the father’s inability to provide the basic needs of his children.
Al-Khafaji underestimates the importance of the impact of the rise of the dollar on merchants and owners of exchange companies, because their work is linked to the market movement, and the higher the price of the dollar, they in turn raise the prices of goods and services, and the only one affected by this measure is the citizen and those with limited income.
The Iraqi government is facing widespread pressure due to the continuous decline in the exchange rate of the local currency, as there has been talk of the return of popular demonstrations and the launch of a new round of protests, as a result of the excessive drop in the exchange rate of the dinar against the dollar, and the resulting stagnation in the markets and an increase in the prices of goods and services.
Economic researcher Abd al-Salam Hassan believes that the Iraqi street is in a state of anger, which calls for the possibility of renewed demonstrations and the occurrence of a “hungry revolution” that may overthrow large heads, as happened in the past demonstrations that lasted for a period and carried social and economic demands that are still unfulfilled to this day.
Hassan indicates, in his interview with Al-Araby Al-Jadeed, that the rise in the price of the dollar has special accounts behind which there are political agendas, targeting the Iraqi citizen and fighting him in his daily strength, as he described, expecting the continuation of the rise in the price of the dollar until it exceeds 160,000 Iraqi dinars for every 100 dollars. .
Regarding the losses of merchants and owners of exchange companies in Iraq, Abdel Salam Hassan believes that they are not considered large losses, and that owners of capital in the market took advantage of the rise in the dollar to achieve additional profits, by raising the prices of basic and consumable materials.
Hassan describes the solutions presented by the Iraqi government in the face of this crisis as “random solutions”, adding that the financial authorities in Iraq are still unable to achieve balance in the market, and provide the necessary strategic solutions to ensure financial and economic stability in the country.
Al-Sudani plans to visit Washington: Reconsidering the US military presence in Iraq
Yesterday, Thursday, two Iraqi officials in Baghdad told Al-Araby Al-Jadeed that Prime Minister Muhammad Shia Al-Sudani plans to make an official visit to Washington during the coming period, at the head of a large ministerial delegation from his government.
While they indicated that he is coordinating this file with the US embassy in the capital, Baghdad, which has not yet responded with a clear position on this matter, it is likely that the reason for this is waiting for the US administration to know the directions of the new government formed by the “Coordination Framework” coalition, which is supported by Tehran.
Iraqi official: Al-Sudani received the approval of the coordination framework to visit Washington
Al-Sudani’s upcoming visit to Washington is a protocol procedure used by all successive Iraqi heads of government after 2003, in the first months of their assumption of power. However, Al-Sudani’s visit, in his capacity as the head of a government emanating from a political alliance, declared on more than one occasion his opposition to the United States and work to remove its military presence from the country, may take it out of its usual context this time, especially since the files of Al-Sudani, which he wants to carry to Washington, will not be American accepted.
Al-Sudani, whose government was voted on by parliament on October 27 last year, put forward a broad security, service and political program, the most prominent of which was holding early elections within one year, resolving the file of the displaced and depopulated cities controlled by militias allied to Iran, and improving relations with countries. Neighborhood, and being careful not to engage in the politics of axes in the region.
However, doubts are growing about the extent to which he has fulfilled his promises, after a series of measures that contributed to the escalation of the influence of armed groups within state institutions, by naming figures affiliated with them, especially in the National Security and Intelligence Services, and the Ministries of Defense and Interior.
This matter may be the first source of concern for the United States in the manner of dealing with the ninth Iraqi government since the American invasion of the country in 2003, in addition to questioning the eligibility of the current parliament, after the withdrawal of the first winner in the elections, which is the Sadrist movement, after pressures he was exposed to while trying to form a majority government. .
Two Iraqi officials in Baghdad, one of them in the prime minister’s office, confirmed that Al-Sudani “is planning to visit the United States at the head of a large ministerial and security delegation, to discuss a number of files, on top of which is security.”
The approval of the “coordinating framework” for the visit
The official in the prime minister’s office said that al-Sudani “had the approval of the coordination framework for the visit before moving to the US ambassador to Baghdad, Alina Romanowski, who did not clarify any position regarding the visit’s arrangements or timing.”
For his part, the other, a member of the Foreign Relations Committee in the Iraqi parliament, who asked not to be named, confirmed in a phone call to Al-Araby Al-Jadeed that Al-Sudani wants to discuss ” the file of the American military presence in Iraq.”
He explained, “The coordination framework seeks to renegotiate and cancel an agreement that took place during the government of Mustafa Al-Kazemi that transformed the status of the American forces from combat to an advisory force inside Iraq, and pushes towards ending the entire American military human presence. Instead, it will be an agreement related to assisting Iraq in other military fields.” including providing him with arms and ammunition.
He pointed out that ” political parties inside Iraq have reservations about this approach, such as the Kurdistan region, which sees the American presence at the Harir Air Base, north of Erbil, as a necessity for the security of the region.” He said, “The available information confirms that there is no obstacle for the prime minister to go to Washington, but so far the timing has not been determined.”
In his latest remarkable position, Al-Sudani criticized the former US administration, regarding the killing of the leader of the “Quds Force” Qassem Soleimani, whom he described as “the guest of Iraq”, with the deputy leader of the “Popular Mobilization” Abu Mahdi Al-Muhandis, in the American raid on January 3. January 2020.
He said, during a memorial ceremony in Baghdad sponsored by the “Popular Mobilization Forces”, last Thursday, that “the previous US administration’s doing this act is a flagrant assault on Iraqi territory and sovereignty.” However, Al-Sudani avoided the method of other Iraqi officials and politicians in attacking the United States and its policy in Iraq , as he focused on criticizing the administration of former President Donald Trump only.
In this context, Mahmoud al-Hayani, a leader in the “Coordination Framework” coalition, confirmed, in an interview with Al-Araby Al-Jadeed, that there is an upcoming visit by Al-Sudani to Washington, but he also confirmed that “no date has been set for it yet, and it is within the framework of diplomatic coordination.”
Examine the file of the American presence in Iraq
Al-Hayani added, “The most prominent files that Al-Sudani will discuss in Washington is the file of the American presence in Iraq, and this file is one of the government’s priorities, which Al-Sudani promised to resolve according to his government program, after which he was granted confidence by the House of Representatives.”
He continued, “The forces of the coordination framework, and the armed factions, do not oppose having diplomatic relations with the United States of America based on respect for sovereignty. Iraq needs relations with Washington in the field of economy, investment, and even security and military expertise, but according to agreements that respect Iraq’s sovereignty and prevent any interference in its internal affairs.” political or otherwise.
The removal of American forces is an Iranian demand
However, a member of the Iraqi Civil Movement, Hussein Al-Sheikhly, considered that the return of the demands to remove the US forces from Iraq is “an Iranian demand, and the Iraqis have nothing to do with it.”
Al-Sheikhly added, to Al-Araby Al-Jadeed, that “the Americans may respond to any new pressures or demands, but this will be at the expense of a new isolation of Iraq. The Iraqis will gradually find themselves besieged by a number of measures and decisions that are economically harmful to them.”
Hussein Al-Sheikhly: The return of the demands to remove the American forces from Iraq is an Iranian demand
On the other hand, the head of the “Iraqi Center for Strategic Studies”, Ghazi Faisal, considered, “Al-Sudani’s upcoming visit to Washington is a matter of protocol, which all previous heads of government worked on, and this visit is always devoid of any real practical agreements, and it is only limited to discussing some files.” joint ventures, especially the security ones.
Faisal suggested that Al-Sudani’s upcoming visit to Washington would be devoid of “discussing the new escalation by the armed factions, as well as some forces close to Tehran against the Americans in Iraq, especially with the passing of the third anniversary of the assassination of Qassem Soleimani and Abu Mahdi Al-Muhandis. There will be direct American messages to Al-Sudani to stop this .” Threats to prevent any US reactions against these parties at the military level or to impose sanctions.
And he talked about “pressures exerted on Al-Sudani by armed factions, in addition to political forces within the coordination framework regarding his movement towards the file of the American presence in the country, but Al-Sudani is aware of the danger of opening this file now, and for this he is working to postpone the presentation of this file, until after his visit to Washington.” But the pressure on him is too great.”
And Iraq had officially announced the transformation of the tasks of the American forces into advisory ones on December 31, 2021, within the agreement signed between the two countries, with a number not exceeding two thousand soldiers.
These forces are located in three main locations in Iraq, namely the “Ain al-Assad” base, located 130 kilometers from the city of Ramadi, the center of Anbar Governorate, in the west of the country, and the “Harir” base, north of Erbil, within the Kurdistan region of Iraq, along with Camp Victoria. “, adjacent to Baghdad Airport, in which there is a task unit and intelligence analysis, in addition to the US embassy in central Baghdad.
(Muhammad Ali contributed reporting from Baghdad) link
Source: Dinar Recaps
Gold makes third consecutive weekly gain
llow-up – Mawazine News
Gold prices rose, at the end of the week, achieving the third Straight weekly gains, after US jobs report reduced concerns about Raising interest rates in America.
The price of gold at settlement, about 1865.69 dollars per ounce, up about 2.3 percent for the week.
U.S. jobs data showed that Employers added 223,000 jobs in December, more than experts had expected. Wages grew slightly less than expected.
Federal Reserve Fund futures traders boosted Their bets that the Fed will raise interest rates by 25 basis points at the end of its meeting which lasts two days on the first of February after the release of jobs data.
The Federal Reserve raised interest rates by 50 basis points in Its December meeting, after four consecutive increases of 75 basis points.
A few U.S. central bank officials confirmed Thursday past their commitment to fight to bring inflation down to the target of two percent, But St. Louis Federal Reserve Chairman James Bullard said 2023 had There has finally been some relief in the fight against inflation.
High interest rates reduce the metal’s attractiveness. Yellow represents a hedge against inflation but does not generate a return.
Source: Dinar Recaps
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