TNT
Tishwash:
interesting time to share this info hmmmm
In numbers.. The decline in the value of the Iraqi dinar
Today, Friday (December 27, 2024), the economic expert, Manar Al-Abidi, determined how much the Iraqi dinar has lost in value.
Al-Obaidi explained in a tweet followed by “Baghdad Today” that “the value of any currency is determined based on two basic factors, which are the amount of currency issued, which is the total cash pumped by the central bank, and the size of reserves, which includes foreign currencies, investments, and gold held by the central bank.”
He explained that “the situation at the end of 2023, the amount of currency issued reached 101 trillion dinars, and the value of official reserves reached 145 trillion Iraqi dinars.”
Al-Obaidi added, “As for the situation at the end of 2024, the amount of currency issued remained at the same level of 101 trillion Iraqi dinars, and the value of official reserves decreased to 139.7 trillion Iraqi dinars.”
He pointed out, “The impact on the value of the Iraqi dinar, despite the stability of the issued monetary mass, the decrease in the value of official reserves by 5.3 trillion Iraqi dinars led to a decline in the purchasing power of the dinar, and as a result of this decrease in reserves, the actual value of the Iraqi dinar decreased by 5.3%.”
Al-Ubaidi pointed out that “the continued decline in the actual value of the dinar will lead at some point to an increase in inflation as a result of the decline in the strength of the dinar compared to reserves alone. All this while the average price of Iraqi oil was high, so how will things turn out in the event of a decline in oil prices?” link
Uncertainty over the 2025 budget.. Parliament: We don’t know anything about it yet
Member of Parliament Ahmed Al-Sharmani explained Thursday (December 26, 2024), that Parliament does not know anything about the 2025 budget schedules, suggesting that the government is deliberately delaying sending it.
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Al-Sharmani said in an interview with “Baghdad Today”, “According to the Financial Management Law, the budget or its schedules must reach the House of Representatives at the end of the month (10) of each year, and any delay in doing so is considered a legal violation, especially since this violation has been repeated for many years.”
He explained that “the 2025 budget tables are not known to the House of Representatives so far, and the delay in sending them is a violation, and there is no specific date for sending those tables.”
Al-Sharmani added, “Perhaps the government will link sending the tables with amending the law proposed in Parliament, and this will delay sending the tables for a long time due to disagreements over the origin of the amendment.”
MP Jawad Al-Yassari confirmed on December 19, 2024, that political differences over amending the budget law will delay voting on the 2025 budget schedules, indicating that “the Iraqi government is waiting for Parliament to amend the budget law, so that it can send it the schedules for 2025 according to the amendments.”
It is noteworthy that Member of Parliament Mustafa Al-Karaawi announced on December 8, 2024, the postponement of the second reading of the amendment to the General Budget Law until after the legislative holiday. link
Expert: Central Bank decisions threaten banking sector and stability of national economy
Researcher and specialist in financial and banking affairs, Mustafa Hantoush, confirmed today, Monday, that the decisions of the Central Bank threaten the banking sector and the stability of the national economy.
Hantoush said in a statement to Al-Maalouma Agency that “the recent decisions of the Central Bank of Iraq, which included stopping the financial transfer platform (FITR) and handing over the management of the Iraqi dollar to four banks owned by investors, some of which belong to countries such as Jordan and the Gulf, constitute serious repercussions.”
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He pointed out that “these policies may lead to the collapse of the Iraqi banking system and the exacerbation of economic crises, noting that more than 100,000 jobs in the private banking sector are threatened with loss in favor of foreign banks, which constitutes a major blow to banking autonomy.”
He explained that “the monopoly of the dollar by these banks will lead to difficulty in stabilizing the exchange rate and increasing volatility, which will exacerbate the economic situation and weaken competition in the banking sector.”
As part of the solutions, Hantoush called for “extending the work of the money transfer platform in coordination with the new US administration, and enabling Iraqi banks to open dollar accounts in international banks such as Citibank and JP Morgan, as is the case in the countries of the region.”
He also stressed the “importance of transparency and announcing the mechanisms of cooperation with Ernst & Young regarding transfers in other currencies such as the euro, yuan and dirham, in addition to revealing the results of the contract with Oliver Wyman regarding the status of the 28 sanctioned Iraqi banks.”
At the end of his statements, Hantoush called for “addressing the central banks of countries such as Turkey, the Emirates, China and India to open branches of Iraqi banks in those countries, which would contribute to transforming the banking relationship from remittances to a direct commercial partnership. link
Source: Dinar Recaps
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Tishwash:
Goodbye dollar auction.. Central Bank announces the end of 20 years of billions and suspicions
The matter has been settled.. Iraq will no longer offer its precious dollars in the controversial dollar auction, or what was called the foreign currency sales window and the electronic platform.
After 20 years since the start of this procedure, Ammar Khalaf, Deputy Governor of the Central Bank, confirmed in a statement to the 964 Network that the dollar platform has become closed in compliance with the date set by the governor to close it at the end of 2024.
Khalaf denied all rumors about the possibility of extending the platform’s work, and spoke with great positivity, reassuring the market and consumers that the overwhelming majority of traders have already adapted to the new system in which the Central Bank does not provide direct dollars to traders. But what will happen?!
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The sale of the dollar was a mechanism adopted by the Iraqi government after 2003 during the era of Governor Sinan Al-Shabibi, for several goals mentioned in a study by the bank official, Dr. Walid Aidi Abdul Nabi , including controlling the exchange rate and raising the purchasing power of those with limited incomes, among others. It aims to provide hard currency to traders in order to finance their imports of goods from abroad, but the idea was later subject to much skepticism and suspicion, and the auction became one of the most frequently mentioned files in discussions about c********n, fictitious import invoices, and currency smuggling to neighboring countries, among others.
According to the new system after the window closes, traders will have to deposit their money in dinars in Iraqi banks that have entered into partnerships with foreign banks (called correspondent banks). These correspondent banks with American banks will undertake all verification and compliance procedures, while the Central Bank will only be tasked with strengthening the dollar balances in the accounts of banks that are able to pass all these procedures.
Many experts believe that this step has relieved the Central Bank of responsibility for any potential m**********n of invoices or attempts to smuggle currency, and the Central Bank has thus protected itself from any potential American sanctions with their dangerous implications for the country’s economy.
Khalaf said, “The date for closing the platform is fixed, it will not change and will not be extended. The banks have been preparing since the beginning of this year when Governor Ali Al-Alaq announced his intention to close the platform.”
According to Khalaf, “transfers are made by strengthening the balances of Iraqi banks, and 97% of transfers are now made according to the new mechanism. This will be noticeable during the first days of the new year, as the Central Bank’s transfers to banks that are operating at full capacity will not change by strengthening the balances with correspondent banks.” However, he left the door open to the possibility of a very slight and ineffective decline in the Central Bank’s sales.
He pointed out that “the majority of banks in Iraq have correspondent banks and have been operating according to the new mechanism since the beginning of this year, and traders will not face any problem unless their money is in banks without correspondent banks.” link
Source: Dinar Recaps
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