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TNT
Tishwash:
Advisor to the Prime Minister: Iraq today has the highest levels of foreign reserves in its financial history
Advisor to the Prime Minister, Mazhar Saleh, confirmed that Iraq today has the highest levels of foreign reserves in its financial history.
Saleh defended the banking restrictions aimed at “verifying these transfers,” with the aim of reassuring “the international financial community and also for reasons related to Iraqi society: Do these transfers actually go to finance Iraq’s trade?”
He added, “What is happening has nothing to do with the strength of the Iraqi economy. Iraq today is at the highest levels of foreign reserves in its financial history.” Rather, “structural changes have occurred in issues of dealing with foreign currency.” link
The government is spending 133 trillion dinars from the current year’s budget and revealing the status of employees’ salaries for the new year
Member of the Parliamentary Finance Committee, Mustafa Al-Karawi, said in a press interview that “delaying the budget releases does not affect employees’ salaries,” indicating that “salaries have been fully secured.”
Al-Karaawi added, “About 130 trillion Iraqi dinars were spent out of the total budget amounting to 199 trillion dinars.”
A member of the Parliamentary Finance Committee pointed out that “delayed projects are among the government’s obligations, and will be proceeded with after disbursing all investment budget allocations.”
For his part, economic affairs specialist Safwan Qusay said in a press interview, “The cessation of oil exports in the Kurdistan region affected Iraqi revenues, but the rise in oil prices in recent months made up for the shortfall.”
Qusay added, “The monthly spending rate is approximately seven trillion dinars, while the budget was built on the basis of 15 trillion dinars, meaning there is an excess in spending.”
The economic affairs specialist pointed out that “the money spent is 80% of the operating budget, and the financial abundance is rotated, given that the budget is for three years.”
Earlier, the Parliamentary Finance Committee confirmed that entering the new year 2024 will not stop the disbursement of funds from the tripartite budget, given that it was approved for three years, while indicating that the committee is awaiting schedules from the government related to spending for the new year.
The head of the committee, Atwan Al-Atwani, said in a statement to the official agency, last week, that ” The committee approved a tripartite government budget, and there is no interruption to spending and disbursement, given that the approved budget is for (3) years to ensure the continuation of spending, contracting, and the continuity of the government’s work throughout its years without faltering, as happened in the past, which led to the budget being delayed for more than 6 months.
He added, “With regard to the 2024 budget, the committee is communicating with the government while awaiting its schedules, and it is possible to complete the issue as soon as possible with the aim of sending it to the House of Representatives to vote on it.” link
The most prominent of which is Japan… a list of countries and banks that have a share of Iraq’s foreign debt
Iraq’s total external debt reached $22.6 billion by the end of 2022, according to World Bank data.
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According to the data, Japan came as Iraq’s largest creditor with a share of 27%, while the share of the International Bank for Reconstruction and Development reached 18% of the total debt, while the share of the United States of America reached 7% of this external debt. link
CandyKisses:
A fruitful week in the footsteps of financial and banking reform
Economy News-
The last week ending on 14/12/2023 witnessed clear activity and efforts by the government and the Central Bank to implement the visions, plans drawn and the roadmap contained in the methodology of financial and banking reform in paragraph 7 and other relevant paragraphs of axis 12 of the government curriculum and the new strategy that the Central Bank is working on for banking reform and foreign trade financing and reconsidering lending policies in accordance with building a national lending strategy that adopts new mechanisms for bank financing and the Riyada initiative to develop the capabilities of young people and allow them to choose
Their small and medium enterprises are pioneering in all areas of development and technology.
In addition to confirming the plans for digital transformation in the financial and banking sector and moving to the community of criticism and focusing clearly on electronic payment applications in all fields and in fruitful cooperation and high coordination with government stakeholders and with the continuous support of the Prime Minister, so it was achieved during the past week and in light of the negotiating visits to organize foreign trade financing conducted by delegations from the Central Bank, the government and banks to Turkey and to the United Arab Emirates and meetings with the US Federal Reserve Bank and the Treasury The United States, the Central Bank of Turkey and the concerned authorities in Turkey include the following:
First: Starting to open accounts for our banks in Turkish lira and euros, with the strengthening of the Central Bank of Iraq in accordance with special arrangements and understandings.
Second: Starting to strengthen the balances of our banks in UAE dirhams and agreeing with First Abu Dhabi Bank on all arrangements clearly.
Third: Finding and strengthening the relations of our banks with foreign correspondent banks, achieving the compliance of the Iraqi banking system with international banking standards, and enhancing the advance balance in our bank accounts, and this will lead to a gradual reduction of dependence on the electronic platform in 2024.
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Fourth: Meeting the Central Bank’s requests for foreign exchange shipments for the year 2024.
Fifth: Emphasis on the electronic link between the Central Bank, customs, tax, and automation of the customs system and the tax system.
To complement the procedures of the Central Bank to employ the strategy of financial inclusion and electronic payment, the decision of its Board of Directors was issued to establish the National Company for Electronic Payment Systems in Iraq.
Which will regulate, develop and manage the national electronic payment systems with high efficiency, and that the role of the Central Bank will be regulatory and supervisory on these systems, and the implementation and development of the legal and operational framework will be initiated with the participation of all relevant authorities in accordance with the Central Bank Law.
This confirms that the Central Bank and the government are working in coordination and continuous efforts to achieve financial and banking reform, which is the beginning of the successful economic reform.
The central goal is to stabilize the exchange rate and not to accept the existence of another price for trading on the black market higher than the official rate, and to eliminate speculation in the black dollar and damage the national economy
Source: Dinar Recaps
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Tishwash:
Iraq seeks “monetary sovereignty” Restrictions on the dollar “confuse” Everyday life
Al-Harith Hassan, an employee in the oil sector in the city of Basra in southern Iraq, has been unable for months to withdraw his full salary in dollars from the bank, after the authorities imposed new restrictions that complicate the use of hard currencies, in their effort to control a black market for exchange rates.
These measures are considered a paradox in an oil-rich country, which has huge reserves in US dollars, exceeding one hundred billion.
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However, the emergence of a parallel exchange market, and the authorities imposing restrictions within the framework of strengthening banking supervision in compliance with international rules imposed by Washington, complicated the daily life of the population.
The official exchange rate is 1,320 dinars to one dollar, but at money changers, the price of one dollar is equal to 1,500 dinars and may reach 1,600.
Currency exchange offices have become very cautious with customers, after the arrest of dozens of money changers a*****d of manipulating prices.
37-year-old Hassan says: “For 3 months or more, there has been great difficulty in obtaining dollars from banks.”
The salary of this employee supervising logistics operations in an oil field in southern Iraq is approximately $2,500 per month.
He explained: “In the past months, we would go to the bank to withdraw our salary. They would give us very small amounts in the form of payments, due to the illiquidity of the dollar.”
Hassan explains that recently, the general trend among banks has been to give salaries in dinars and according to the official exchange rate. But he considers this “a problem, because the official exchange rate differs from the parallel market price by 20 percent,” meaning that “the salary will be reduced.” Of its real value.
The Central Bank of Iraq announced in a statement that, as of January, it had decided to “limit all commercial and other transactions to the Iraqi dinar instead of the dollar.” in the country.
“Monetary Sovereignty”
While the dollar can be withdrawn in cash from previously existing deposits in hard currency naturally, starting in 2024, it will become necessary to withdraw every money transfer from abroad in dinars exclusively, and according to the official exchange rate.
The Prime Minister’s Advisor for Financial Affairs, Mazhar Saleh, confirms that “this is the rule that is part of monetary sovereignty, but there are exceptions,” which especially include embassies.
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He adds: “We strengthen what is called monetary sovereignty… It is not possible to deal with two currencies within the national economy.”
However, these restrictions raise controversy and hinder the daily life of Iraqis, according to Agence France-Presse.
Direct transfers outside banks have become impossible in dollars, and are limited to dinars at the official rate.
The banking sector in Iraq has adopted an electronic platform, the aim of which is to monitor the uses of the dollar and tighten control over a thriving informal economy, while tax evasion attracts some importers and traders.
The Prime Minister, Muhammad Shiaa Al-Sudani, acknowledged that with the new measures, the cash supply in hard currency available in the market decreased from “200 to 300 million dollars.” per day to “30, 40 and 50 million dollars.”
Haider Al-Shakri, from the Chatham House Research Center, explains that “one of the main reasons” In order to enhance demand for the currency in the parallel market, “the smuggling of the dollar towards countries and entities subject to sanctions, especially Iran and Syria.”
In September, Shiaa Al-Sudani said that merchants who deal with Iran are forced to turn to the parallel market to obtain currency, given that Iran is a country “that has sanctions and is not allowed to conduct financial transfers.”
At the same time, he confirmed that the central banks in Iraq and Iran are discussing a “mechanism” In order to “regulate trade”, it would “break the back of the parallel market”.
“I*****l trade”
Al-Shakri also points out the existence of “i*****l trade.” For some products subject to “high taxes”, such as cigarettes.
In late November, the government announced facilities to encourage importers of cigarettes, cars, gold, and mobile phones to obtain foreign currency through official channels.
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As for bilateral exchanges, the authorities encourage banks and importers to use currencies other than the dollar, such as the euro, the UAE dirham, or the Chinese yuan.
The Prime Minister’s advisor, Mazhar Salih, defends the banking restrictions that aim to “verify these transfers,” with the aim of reassuring “the international financial community, and also for reasons related to Iraqi society: Do these transfers actually go to finance Iraq’s trade?”
He adds: “What is happening has nothing to do with the strength of the Iraqi economy. Iraq today is at the highest levels of foreign reserves in its financial history.” Rather, “structural changes have occurred in issues of dealing with foreign currency.”
He also notes that in order to protect the country with a population of 43 million people from inflation, importers have access to the dollar and buy it at the official rate, which is more beneficial.
This concerns especially foodstuffs, medicines and building materials. Saleh believes that this “creates an atmosphere of stability, which is contrary to the parallel market.”
On the other hand, Iraqis can withdraw money in dollars before they travel. But this created a new problem, as the authorities at the airport stopped many travelers in possession of debit cards, which were used to withdraw thousands of dollars from abroad at the official rate, and then sold them again at the black market price inside Iraq. link
Source: Dinar Recaps
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