KTFA
Henig » February 12th, 2023
Central Bank. US parties express their readiness to face the challenges of working with the electronic platform for remittances and cash / expanded
Baghdad / Nina / The delegation of the Central Bank of Iraq met for long hours with the delegation of the US Federal Reserve Bank and the US Treasury Department in Washington, D.C.
According to a statement by the bank, the two parties expressed their readiness to work together to meet the challenges of working on the electronic platform for remittances and cash.
The delegation of the US Federal Reserve Bank and the US Department of the Treasury discussed a number of support mechanisms for the Central Bank of Iraq to enhance its capabilities to deal flexibly with crises during this stage.
The US Federal Reserve confirmed that the measures of the Central Bank of Iraq are in the right direction to build a solid banking sector.
The Assistant Deputy Secretary of the US Treasury indicated ways to fully support the efforts of the government of Iraqi Prime Minister Mohammed Shia Al-Sudani in economic reform, and the readiness of the US Treasury Department to provide the required support.
The meeting listened to a presentation by the Governor of the Central Bank of Iraq on the bank’s directions in achieving its most important objectives to ensure general stability in prices, and options and proposals in the field of accelerating, expanding and streamlining the work of the electronic platform for external transfer.
The Governor of the Central Bank of Iraq, Ali Mohsen Ismail, confirmed the bank’s intention to launch the second package of facilities that will enhance the stability of the exchange rate. LINK
IMO: All of the things listed as problems in this article would be solved by the new exchange rate. Once there is a ReInstatement of the historic value, these “problems” become laughably minute.
Pressure of expenditure or acceptance of rising deficits”. MP: Two options for the government on the budget
Economy News – Baghdad
The parliamentary finance committee indicated on Saturday that changing the exchange rate may increase the budget deficit by at least 10 to 15 trillion dinars, with the price of a barrel of oil remaining around $ 70.
“The Financial Management Law does not allow the government to exceed the budget deficit of 3%, which in any case does not exceed 15 trillion dinars, but the truth is that the deficit reached more than 60 trillion dinars before changing the exchange rate, and we expect that at least 10 to 15 trillion dinars will be added to this deficit,” said committee member Jamal Kojar.
He explained that the government “has two options, either to compress expenditures and go towards deleting some paragraphs in the executive budget or the operational and investment budget, or to accept the rise in the deficit from 60 trillion to 75 trillion,” and considered that “the government should not borrow from local banks that owe it in the first place.”
Regarding the government’s internal debt, he said: “These banks are supposed to play the role synonymous with the role of the government because the latter can create jobs through projects through the investment budget, while banks can create jobs for the private sector by granting soft loans.”
“If the government moves towards withdrawing liquidity from these banks, it will burden them with increasing debts and loans and tying the hands of banks to create jobs, and thus the pressure will shift to the government, which has tended towards appointment,” Koger said in an interview with the official newspaper.
Regarding the price of a barrel of oil, Koger explained that “the budget estimates will be about $ 70 even with the decline in its prices, and the government will be forced to withdraw from the bank reserve as happened in previous budgets,” pointing out that “the operating budget will be fixed, while the investment budget will change if the government chooses to compress expenditures, and some projects may be transferred to a supplementary budget or subsequent budgets in the hope of rising oil prices.” LINK
Source: Dinar Recaps
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