Iraq and Indonesia News Posted by Tishwash at TNT 6-10-2026
TNT:
Tishwash: Iraq is moving towards balancing programs with US support and in coordination with the World Bank.
Iraqi Finance Minister Faleh Sari discussed on Wednesday with the US Chargé d'Affaires to Iraq, Joshua Harris, prospects for economic cooperation between Baghdad and Washington and ways to strengthen the partnership with US financial institutions, while both sides affirmed their support for the path of economic and financial reforms.
The Ministry of Finance said in a statement, reported by Shafaq News Agency, that the minister stressed that the government has given the economic file high priority within its program, noting that the next stage will witness reforms aimed at addressing economic and financial challenges in a radical way, and in cooperation with international partners.
The minister revealed a government trend towards preparing a program budget and gradually moving away from the traditional budget system, with the aim of raising the efficiency of spending and linking financial allocations to goals and results, in line with the requirements of financial and administrative reform.
For his part, the US Chargé d'Affaires affirmed his country's support for the Iraqi government and its readiness to enhance economic and financial cooperation, in a way that contributes to supporting stability and achieving sustainable economic growth in Iraq.
This trend coincides with what the government spokesman, Haider al-Aboudi, announced, that the Council of Ministers approved a directive to proceed with drafting a "program budget" in coordination with the World Bank and the Parliamentary Finance Committee, within the framework of economic reform. link
Tishwash: Ministry of Oil: Iraq's share of the OPEC+ production increase is 26,000 barrels per day
The Ministry of Oil revealed the size of the increase allocated to Iraq within the recent OPEC+ decision to raise oil production levels.
Ministry spokesman Salim al-Rikabi said that the OPEC+ group decided to increase production by 188,000 barrels per day, noting that Iraq's share of this increase is 26,000 barrels per day.
Al-Rikabi explained that the new increase will come into effect starting next July, within the framework of the understandings reached by the member states of the oil alliance.
Oil Minister Bassem Mohammed Khudair participated in the OPEC+ meeting held via closed-circuit television, where it was agreed to increase production by 188,000 barrels per day, distributed among seven countries: Iraq, Saudi Arabia, Russia, Kuwait, Kazakhstan, Algeria, and Oman. link
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Tishwash: The Iraqi government announces the establishment of a $150 billion development fund and sets a date for the end of the weapons collection campaign.
Iraqi government spokesman Haider al-Aboudi announced on Wednesday that the cabinet has decided to establish a development fund project with international guarantees and contributions amounting to $150 billion to achieve economic stability through investment. He also revealed that the timeframe for implementing the plan to restrict weapons to the state ends by next September, coinciding with the withdrawal schedule of international coalition forces from the country.
Al-Aboudi said during a press conference attended by Shafaq News Agency in Baghdad that the government based its management of its files on a national vision supported by the mandate and confidence of the House of Representatives, stressing its determination to commit to restricting weapons completely to the hands of the state according to the timetables specified in the ministerial program, which ends next September, coinciding with the end of the tasks of the international coalition.
The government spokesman added that the Cabinet, under the direction of the Prime Minister, approved the formulation of a "program budget" in coordination and joint cooperation with the World Bank and the Parliamentary Finance Committee to advance economic reform in the country.
In response to a question from the agency's correspondent, Al-Aboudi explained that the Development Fund represents an investment vehicle completely independent of the state's general budget, and is based on international contributions from Iraq's friends with guarantees ranging from $100 billion to $150 billion, with the aim of promoting sustainable stability.
Al-Aboudi indicated that the Prime Minister’s upcoming visit to the United States will resolve many issues, mainly related to economic aspects, stressing that Iraq adopts balanced and parallel relations with all countries.
Regarding the relationship with the Kurdistan Region, Al-Aboudi stressed that the Prime Minister directed the oil companies operating in the region to work on increasing oil production, with the aim of reaching financial outcomes and radical solutions that are directly related to securing the salaries of the region’s employees and getting out of the current crises. link
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Tishwash: The coordinating framework announces its support for Al-Zidi's economic vision and affirms: a movement to prepare a national paper and complete the cabinet.
The Coordination Framework held its periodic meeting at the office of the head of the National Wisdom Movement, Mr. Ammar al-Hakim, in the presence of the Prime Minister, Mr. Ali Falih al-Zaidi, to discuss all the political, economic and service files included on the agenda.
A statement issued by the media office of the Coordination Framework, received by the Iraq Observer Agency, stated that the attendees discussed government affairs extensively, with the Prime Minister presenting a comprehensive vision for addressing the emergency economic crisis, reviewing a number of solutions that received the support and endorsement of the Coordination Framework forces, particularly the urgent proposals for addressing the electricity crisis and activating labor and social security laws in support of the private sector and the working class.
The statement added that the assembled forces agreed to prepare a unified paper called the Coordination Framework, which includes the most important national issues to be presented and discussed within the State Administration Coalition to reach an agreement on them, while emphasizing that all political forces stand behind the government in parliament, politically and in the media to ensure the success of its reform program, as well as agreeing on the need to expedite the completion of the cabinet as soon as possible. link
Tishwash: Indonesia surprises markets with an off-season interest rate hike to support the collapsing rupiah
Indonesia unexpectedly raised interest rates outside of its scheduled meetings, a rare move aimed at supporting the rupiah after a series of record declines. The central bank decided on Tuesday to increase the policy rate by 25 basis points to 5.50%, its first such move in eight years.
The bank explained that the decision came after the rupee had fallen at a faster pace than expected since the last meeting in May, when it raised interest rates by 50 basis points, exceeding estimates.
The move comes ahead of next week's Monetary Policy Committee meeting, at a time when the currency is under severe pressure after falling by about 8% since the start of the year and 7% since the outbreak of the war in Iran, making it one of the world's worst-performing currencies. Over the past three weeks, the rupee has recorded its biggest drop since 2020.
The central bank confirmed that raising interest rates represents "an additional measure to enhance exchange rate stability in light of high global volatility resulting from the war in the Middle East," in addition to being a proactive step to keep inflation within the target range during 2026 and 2027.
Temporary market recovery
The decision boosted the Indonesian currency, which closed at 18,050 against the dollar, after hitting a record low of 18,190 the previous day. The Jakarta stock exchange also rose 7.6%, despite having lost more than a third of its value since the beginning of 2026.
A tough battle to support the currency
Authorities are struggling to curb the rupee's decline, despite last month's aggressive interest rate hike and the depletion of nearly $12 billion in foreign exchange reserves this year in an attempt to defend the currency.
The rupee is under pressure from a number of factors that have worried investors, including President Prabowo Subianto’s massive spending plans, an inflated fuel subsidy budget, controversial commodity export policies, and doubts surrounding the central bank’s independence.
Interventions in the foreign exchange market have pushed reserves to their lowest level in nearly two years, after they fell by $1.3 billion in May to $144.9 billion, despite a government issuance of $3.5 billion in dollar and euro-denominated bonds.
Expectations of further tightening
Barclays Bank believes that the Indonesian central bank may continue monetary tightening, with an expected interest rate hike of another 25 basis points next week, and the possibility of resorting to a larger increase of up to 50 basis points.
He pointed to a similar precedent in 2013, when the bank raised interest rates in an emergency move and then lowered them later at the regular meeting, predicting that interest rate cuts would begin if the rupee stabilized.
Reassuring messages from the Central Bank
Bank Governor Pere Wargiu said foreign reserves were "more than sufficient" to support the currency, but declined to confirm a further rate hike soon, calling for waiting for next week's meeting.
He explained that the bank did not want to raise interest rates, but was forced to do so in order to attract investments, enhance the attractiveness of local assets, stabilize the currency, and curb inflation.
The rupee is expected to reach a range between 16,800 and 17,500 against the dollar by 2027, with continued intervention in domestic and foreign markets to support its stability.
Additional tools to attract funds
The central bank is also seeking to attract foreign investment by reducing the cost of hedging contracts by 10% for foreign investors, in addition to raising the returns on short and medium-term debt instruments.
Experts pointed out that bond yields in competing emerging economies such as Mexico, India and the Philippines remain high, increasing competition for capital flows. link