Some “Iraq News” Posted by Clare at KTFA 5-8-2025
KTFA:
Clare: Al-Sudani arrives in Ankara and considers the "Development Road" project an economic approach to confronting crises.
5/8/2025
Prime Minister Mohammed Shia al-Sudani arrived in the Turkish capital, Ankara, on Thursday morning for an official visit, according to a brief statement issued by his media office.
Before heading to Ankara, Al-Sudani wrote a newspaper article in which he described the "Development Road Project," which Iraq has begun constructing to transport goods from the Gulf via Turkey to Europe, as a move toward an economic approach to addressing crises.
In his article, the Prime Minister said, "Iraq calls for adopting an integrated economic approach that addresses development disparities and enhances collective capacity to confront food, energy, and supply chain crises."
He added, "The Development Road project, which is nearing completion, is a practical model for this approach and can serve as a foundation for genuine Arab partnerships."
Al-Sudani continued, "Today, we are not only rebuilding Iraq, but we are also participating in reshaping the Middle East through a balanced foreign policy, informed leadership, development initiatives, and strategic partnerships."
Al-Sudani's visit to Ankara came to participate in the meetings of the Iraqi-Turkish Supreme Council for Strategic Cooperation.
Fahrettin Altun, the head of the Turkish Presidency's Communications Department, confirmed in a post on Twitter on Wednesday that Al-Sudani will make an official visit to Turkey accompanied by a high-level delegation and will meet with President Erdogan at the presidential complex in the capital, Ankara.
The Turkish official added that Turkish-Iraqi relations and current regional and international developments will be discussed, in addition to holding a high-level Strategic Cooperation Council meeting between the two countries.
Alton stated that documents aimed at strengthening cooperation in various fields between the two countries are expected to be signed during Al-Sudani's visit, predicting that Al-Sudani's visit will strengthen the already strong Turkish-Iraqi relations in many areas.
On Tuesday, Mukhtar al-Moussawi, a member of the Iraqi parliament's Foreign Relations Committee, revealed to Shafaq News Agency that al-Sudani will visit Türkiye this week and will discuss security, economic, and water issues in Ankara.
The Iraqi embassy in Ankara announced last Monday the arrival of an official Iraqi delegation in preparation for the signing of bilateral memoranda of understanding.
Iraqi Ambassador to Ankara, Majid al-Lajmawi, stated that Iraqi Prime Minister Mohammed Shia al-Sudani's upcoming visit to Turkey will include discussions on several issues, including development, energy, and trade.
Turkish Transport Minister Abdulkadir Uraloğlu previously announced that Iraqi Prime Minister Mohammed Shia al-Sudani will visit Türkiye in the coming days, while Turkish President Recep Tayyip Erdoğan will visit Iraq during the first half of this year. LINK
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Clare: The Prime Minister warns of the challenges facing the region and calls for a unified Arab initiative.
5/8/2025
Prime Minister Mohammed Shia al-Sudani affirmed on Thursday that Baghdad is hosting the Arab Summit at an exceptional moment for the region, calling for responsible Arab discourse and economic integration to confront challenges.
In his speech at the opening of the Arab Summit in Baghdad, Al-Sudani said, "The Arab Summit in Baghdad comes in a transformative context. It is a moment when the Iraqi national will converges with the general Arab hope to overcome differences and move towards building an effective and comprehensive Arab cooperation system."
He added, "Today we need a responsible Arab discourse based on political realism and a belief that solidarity does not mean conformity, but rather respect for particularities within a common goal and destiny."
Al-Sudani pointed out that "Iraq believes that strengthening Arab action begins with strengthening relations between Arab capitals from the Gulf to the Atlantic, based on mutual respect and non-interference in internal affairs."
He warned that "the challenges we face—from repeated Israeli aggression on Gaza, the West Bank, Lebanon, and Syria, to internal divisions in some Arab countries, to regional and international interventions—threaten not only the security of these peoples but also our collective will as a nation. "
He called for "the launch of a unified Arab initiative that goes beyond the humanitarian dimension to support the building of a national state based on the constitution, dignity, and diversity," stressing the importance of "having a comprehensive Arab development strategy."
Al-Sudani called for "the adoption of an integrated economic approach that addresses development disparities and enhances collective capacity to confront food, energy, and supply chain crises," noting that "the Development Road project, which is nearing completion, is a practical model for this approach and can serve as a pillar for genuine Arab partnerships."
He emphasized that "Arab national security is indivisible and cannot be achieved without effective cooperation, balanced policies, and strong institutions that protect the supreme interests of the nation."
Al-Sudani concluded his speech by saying: "From Baghdad, we address an appeal to all Arab capitals: It is time to start anew, on new ground, with a new methodology, and a new will." LINK
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Clare: Al-Sudani: Baghdad is hosting the Arab Summit at an exceptional moment for the region.
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Clare: The Central Bank's trilogy curbs the parallel market. The dollar drops to a historic low for the first time since 2022.
5/8/2025 - Baghdad
The Iraqi dinar has seen a significant improvement in its value against the US dollar in Iraqi markets over the past few weeks, with the hard currency declining for the first time since 2022, reaching 141,000 per $100.
Before Ramadan, the dollar exchange rate hovered around 150,000 dinars per $100. During Ramadan, the dollar exchange rate remained relatively stable at around 147,000 to 149,000 dinars per $100. However, with the beginning of April, coinciding with Trump's announcement of a tariff war, the dollar exchange rate in Iraq declined rapidly, reaching 142,000 dinars per $100 today.
This improvement was driven by a package of monetary and regulatory policies that succeeded in reducing demand for foreign currency through informal channels.
In this context, the Prime Minister's Advisor for Financial Affairs, Mazhar Mohammed Saleh, identified three main factors that contributed to curbing the parallel market and strengthening the dinar.
In an interview with Al-Eqtisad News, Saleh said that the Central Bank of Iraq has succeeded in meeting the dollar needs of major traders by strengthening national banks' reserves with their foreign correspondents, which are highly rated (AAA) banks, and by beginning to use alternative currencies such as the Emirati dirham, the euro, and the Chinese yuan in banking operations, especially with Iraq's main trading partners such as Turkey, the UAE, and China. This approach has contributed to accelerating remittances and reducing reliance on the parallel market.
Small businesses accounted for approximately 60% of private sector trade in Iraq. Supported by new government measures, this category of traders was facilitated to access dollars directly through Iraqi banks, eliminating the need for expensive intermediaries. This contributed to absorbing a significant portion of the parallel demand for dollars.
Saleh noted that travelers are now able to obtain dollars at the official exchange rate (1,320 dinars per dollar) using electronic payment cards, in addition to the ability to obtain $3,000 in cash per month through official airport outlets, significantly reducing their reliance on the black market.
Saleh emphasized that several supporting factors also contributed to reducing pressure on the dollar in the parallel market, including stricter legal procedures for dealing in dollars outside the banking system. This prompted individuals to avoid the legal risks associated with the black market and turn to gold as a savings instrument, due to global dollar fluctuations and concerns about the future of paper currency.
Al-Sudani's advisor pointed to the increasing demand for government bonds with attractive semi-annual returns, which have become a reliable tool for preserving value, away from speculation in the foreign exchange market. He also emphasized the success of hypermarkets in stabilizing the prices of basic commodities, which has weakened the impact of the parallel market on citizens' livelihoods and contributed to overall economic stability.
Concluding his remarks, the Prime Minister's advisor noted that demand for gold has reached a historic peak, driven by growing concerns among Iraqis about the possibility of the US Federal Reserve canceling or reducing some paper dollar denominations in the future. This has prompted citizens to diversify their savings away from the US currency.
In addition, economic expert Manar Al-Abidi identified a number of other reasons that led to the decline in the dollar's price locally.
Al-Obaidi told Al-Eqtisad News that the primary reason for the dollar's decline is a decline in demand on the parallel market, coupled with a significant increase in the supply of hard currency, both from domestic and foreign sources. He explained that this new balance has helped narrow the gap that has long separated the official exchange rate from the parallel market rate.
Among the notable changes, Al-Obaidi points to the declining confidence of many local investors in the dollar as a savings instrument, due to expectations of a decline in its value against gold. This trend has prompted a large segment of citizens to exchange dollars and purchase gold, increasing the dollar money supply in the local market.
In contrast, other sources have contributed to the increase in dollar supply, most notably remittances and foreign investments, particularly those related to international companies operating in Iraq. According to Al-Obaidi, these inflows are no longer solely linked to oil revenues, but rather come from additional channels that have helped ease pressure on foreign currency.
In a remarkable monetary measure, the Central Bank of Iraq (CBI) reduced the dinar money supply by more than 6 trillion dinars over the past six months, declining from 104 trillion to approximately 98 trillion dinars. This contraction helped raise the relative value of the dinar against the dollar, placing additional pressure on the parallel market.
Regarding trade, despite a 6% increase in imports from China, Iraq's imports from major countries such as India, Turkey, and the United States saw a significant decline. Upcoming figures are also expected to reveal a decline in imports from the UAE, which accounts for 30% of Iraq's total imports. This reflects a decline in overall demand for the dollar due to the contraction in trade activity.
Al-Abidi also points to the expansion of channels for accessing dollars at the official exchange rate, through bank cards, official money transfers, and direct transfers, which has prompted many merchants and individuals to move away from the black market.
In addition, regional conditions played a significant role in easing pressure on the dollar. The deteriorating economic situation in Iran led to a decline in demand for goods imported from Iraq, which were re-exported there. The cessation of trade with Syria also contributed to the decline in import demand.
Al-Obaidi also points to a decline in the trade in smuggled oil and prohibited goods, which used to rely heavily on dollar-denominated transactions on the parallel market. These activities have recently been curtailed through strict security and banking measures.
Al-Abidi believes that the continuation of these trends could push the dollar to levels close to 1,395 dinars in the coming period, barring any sudden developments in monetary policy or regional balances. LINK