Iraq News Highlights and Points To Ponder Tuesday Afternoon 10-8-24
What Are The Reasons For The Rise In The Dollar Price In Iraq? A Specialist Answers
Economy | 03:45 - 07/10/2024 Mawazine News - Baghdad The researcher and specialist in the financial and banking sector, Mustafa Hantoush, identified the reasons for the rise in the dollar exchange rate in Iraq, indicating that the parallel market in the country needs an in-depth study to dismantle the reasons for its instability.
In an interview followed by /Mawazine News/, Hantoush said that “the existence of huge trade with Iran and Syria, in addition to large numbers of travelers to these two countries, with the presence of small traders who do not own companies or import licenses, are all factors that are not covered by the official currency auction, which leads to fluctuations in exchange rates.”
He added that “fear of the outbreak of wars in the region prompts traders and citizens to exaggerate the quantities imported and consumed, and prompts some to save the dollar, which directly affects the price of the currency in the local market.”
Hantoush confirmed that “Iraqi supply chains from countries such as Turkey, Canada, Australia, China and India do not face any problems, and there are no concerns about the liquidity of the dollar in Iraq, so the crisis raised by traders and citizens is unjustified.”
The exchange rate of the dinar against the dollar jumped on the black market to 154,500 dinars per 100 dollars. https://www.mawazin.net/Details.aspx?jimare=255712
What Is The Relationship Between Regional Tension And The Rise Of The Dollar In Iraq?
Posted on 2024-10-08 by sotaliraq 2024-10-07 Baghdad The Iraqi market witnessed a noticeable rise in the exchange rate of the dollar against the dinar, until it exceeded 155 thousand dinars for every 100 dollars, coinciding with the intensification of the war in Lebanon, and the growing expectations of an Israeli strike against Iraq or Iran.
Observers attributed this rise to several reasons, the first of which is the state of panic among citizens from the outbreak of a comprehensive war, which prompted them to store the dollar, in addition to the increased demand for it by Iran and armed factions, in anticipation of what is coming.
Economic expert Nabil Al-Tamimi said in an interview with “Al-Alam Al-Jadeed” that “the dollar exchange rate crisis is temporary, and it is not economic. There is no defect or crisis within the Central Bank of Iraq. Rather, its cause is due to the existence of fears among citizens, which made them store the dollar, in addition to the media hype and the state of panic regarding the events of the war in Lebanon.”
Al-Tamimi added, “The talk about Iraq entering a state of war with Israel and the possibility of targeting Iraqi sites and facilities has led to citizens’ lack of confidence in the dinar or in banking transactions, and this is the main reason for the dollar crisis. In this case, the crisis is temporary and not ongoing, and the market needs confidence from the government to return prices to their previous state.”
The price of the dollar rose in the Iraqi markets to 155,750 dinars for every 100 dollars, according to today's price, Monday, after it began to rise to more than 150,000 dinars, following the assassination of Hezbollah Secretary-General Hassan Nasrallah in an Israeli strike in Lebanon. This rise came after the exchange rate had been stable at 148,000 dinars for every 100 dollars.
The region is witnessing great tension, as Iran bombed Israeli military bases near Tel Aviv, during a large-scale missile attack, in response to the assassination of the former head of the political bureau of Hamas, in addition to the Secretary-General of Hezbollah, Hassan Nasrallah.
Since last week, Israel has intensified its attacks on Lebanon, especially the southern suburb, destroying most of the infrastructure and buildings, amid expectations of an Israeli response to Iran, as well as an Israeli response to Iraq, after it announced that two Israeli soldiers were killed by a drone launched from Iraq.
For his part, financial expert Abdul Rahman Al-Mashhadani explained, during an interview with “Al-Alam Al-Jadeed”, that “the current rise in the dollar exchange rate is not economic, as the dollar was stable for a long time, and the Central Bank was selling in large quantities that covered the volume of Iraqi trade, reaching 270 million dollars per day.”
Al-Mashhadani continues, “The political situation and the crisis that threatens the outbreak of war and its expansion, including Iraq and Iran, and the reactions towards the countries that support Israel, are the main reason behind the rise in the price of the dollar.”
He confirms that “there are two reasons behind the increase, the first is that a large number of traders have obligations with suppliers outside Iraq, and when the economic and security situation deteriorates, the obligations remain on them, and they try to fulfill their obligations as soon as possible, because the trade process is linked to the reputation of the trader, so he wants to pay it, and tries to obtain the dollar in an unofficial way.”
The other reason is due to the fears among citizens, who, with the intensification of the crisis and daily news about the worsening situation, want to keep their dollar reserves in anticipation of travel or any emergency,” the financial expert added, “
Also, due to the current security crisis, there is no trust in banking transactions, and citizens want to store dollars in their homes or with them personally, and there are 50 billion dollars stored inside the country, because there is a fear of banking transactions, as a result of fear of economic sanctions that may be imposed on certain banks or the deterioration of events, and thus the collapse of banks, as happened in Lebanon.”
For months, Iraqi factions have been launching missile and drone attacks on Israel in support of the Palestinian resistance in the Gaza Strip, but the escalation began to intensify since the Lebanese Hezbollah entered into the mutual shelling with Israel until the escalation reached its peak with the assassination of Nasrallah.
Last week, Asharq Al-Awsat newspaper quoted informed sources as saying that Tel Aviv had identified 35 targets inside Iraq that could be struck at any moment, including targeting prominent political leaders and faction leaders, similar to what happened in Lebanon.
At the same time, it indicated that Prime Minister Mohammed al-Sudani had asked prominent Shiite figures to mediate to rein in the factions and prevent Iraq from being dragged into the war between Lebanon and Israel.
In addition, economic expert Jawad Malekshahi stated, during an interview with “Al-Alam Al-Jadeed”, that “since Mohammed Shia Al-Sudani assumed the position of Prime Minister until today, the crisis has continued, and it is being manipulated by suspicious hands linked to regional agendas.”
[size=45]He points out that “the main problem at the present time behind the crisis is Iran’s need for hard currency, and the more Iran needs hard currency as a result of the siege imposed on it, the more dollars are accumulated in the Iraqi market to save the Iranian economy, which causes a shortage in the Iraqi market and an increase in the price against the dinar.”
He explains that “this scarcity benefits the parties linked to the Iranian axis from two sides: on the one hand, supporting the Iranian economy and preventing its collapse, and on the other hand, using it as a pressure card against Al-Sudani’s government to remain under the control of Iran and the political forces loyal to it in the government and the House of Representatives, so that it does not rebel against Tehran’s instructions.”
The expert added, “The main reason for the current rise is due to Iran and the armed factions’ need for the dollar, due to the crisis in Lebanon, and also to finance themselves, as well as due to their fears of the ongoing targeting.”
Al-Alam Al-Jadeed was one of the first newspapers to reveal that currency smuggling was continuing, despite controls on banks, and was being carried out via bags transported overland to Turkey and Iran, after the dollar was withdrawn from the local market and not through the official dollar selling window. Specialists at the time called it “black transfers.” LINK
The Fate Of The Three-Year Budget Is Unclear: Most Of The Allocations Have Not Been Spent And Parliament Awaits The Arrival Of The 2025 Schedules
Posted on 2024-10-08 by sotaliraq The House of Representatives is waiting for the government to receive the 2025 budget, and despite the general trend to pass it easily and not amend it significantly, as happened with the current year’s budget, the Finance Committee revealed that the two previous budgets, especially the investment budget, have not been fully disbursed yet, which is expected to happen with next year’s budget as well, for several reasons, most notably the lack of financial liquidity, according to representatives and experts.
Member of the Parliamentary Finance Committee, Jamal Kojer, says, “The Iraqi government has not disbursed the financial allocations for the investment budget for the year 2023 or 2024, until now, due to the lack of financial liquidity, the suspension of some projects due to the provincial council elections, and other reasons.”
Koger added, “The Parliamentary Finance Committee is waiting for the arrival of the 2025 budget tables in order to review them and know the details of those tables and the expenditures in them.
They will be studied well by the committee before voting on them, and we will certainly have the authority to amend those tables, through additions and deletions without any new financial additions.”
He added, “There is no specific time for the government to send the budget tables to the House of Representatives. They may reach us during the next month, and we will follow up on this with the responsible authorities in the Ministry of Finance and the Council of Ministers, to expedite sending the tables for voting on them before the end of the current year.”
It is noteworthy that the Parliamentary Finance Committee revealed that it will discuss the 2025 budget next November, while stressing that employees’ salaries are fully secured.
It is noteworthy that the budget for the current year has not been implemented nor has its funds been spent yet, despite warnings from specialists about the loss of confidence in the government’s ability to manage finances, causing economic, investment and political confusion as well.
In mid-July, the issue of forgery or manipulation of the 2024 budget tables was raised between the House of Representatives and the Prime Minister’s Office, which sparked controversy and conflict in data and correspondence between the two parties.
The story began when the Finance Committee said that some members of the Council had manipulated the budget tables after they were approved, and then sent to the Council of Ministers, indicating that investigations had begun into the issue.
For his part, financial expert Ahmed Al-Tamimi says, “Iraq is suffering from a loss of financial liquidity, and therefore it was unable to implement all of the 2023 and 2024 budgets, and we do not believe that it will be able to implement all of the paragraphs and schedules of the 2025 budget.”
Al-Tamimi believes that “Iraq was facing a real financial crisis due to the decline in oil prices, and it was going to face a crisis even in the issue of paying employees’ salaries during the new year, but the repercussions of the recent Lebanon war led to a rise in global oil prices, and this achieved economic and financial benefits for Iraq, as it relies on financing its general budget from oil sales.”
He does not expect “a fundamental change in the 2025 budget schedules, compared to the previous ones,” expecting “it to be passed by parliament easily, especially since the majority within parliament supports and backs the government, and is working to pass its plans without obstacles or opposition.”
Member of the Parliamentary Finance Committee, Moeen Al-Kazemi, had indicated that the 2024 budget tables came from the government with a spending volume of 211 trillion dinars, and came out of Parliament with a volume of 226 trillion dinars, noting that the change came in the following paragraphs:
increasing the amount of the ration card by five trillion dinars, increasing oil revenues by five trillion dinars, reducing fees by five trillion dinars, and financial increases for the Ministry of Electricity and some governorates, as these increases mean increasing the budget deficit from 64 to 79 trillion dinars.
On June 12, 2023, the House of Representatives voted on the Federal Budget Law for the years 2023, 2024 and 2025, in an initiative that is the first of its kind in the country’s history in terms of the size of the budget as well as the number of fiscal years, with a value of 197 trillion and 828 billion dinars, with a financial deficit of 63 trillion dinars, or nearly a third of the budget.
In addition, Member of Parliament Mukhtar Al-Moussawi explains that “Parliament and political forces in general do not know anything about the 2025 budget schedules, and they are waiting for it to arrive from the Council of Ministers, and there is no specific time for this arrival, and perhaps it will arrive at the end of next month or more than that.”
Al-Moussawi points out that “the Iraqi government has a financial surplus from the 2023 budget, as well as the year 2024, due to the oil prices fixed in the budget, which are less than the real price of selling oil. There is also a lot of money that the government has not spent on projects and other things, which confirms that there is no financial crisis, as some are trying to promote.”
He stressed that “amending the 2025 budget, which is expected to reach the House of Representatives during the coming period, is unlikely, as there is parliamentary confidence in the government’s financial and monetary policy plans, and therefore it will be passed without any obstacles or disagreements, as happened during the passing of the 2024 budget schedules.” LINK