Iraq Economic News and Points to Ponder Saturday AM 9-23-23

Parliament Expected A Conditional Fall For The Dollar To 1,450 Dinars In Iraqi Markets

2023-09-23 02:31  Shafaq News/ Member of Parliamentary Finance, Moin Al-Kadhimi, expected on Saturday that dollar prices in the parallel market would fall to 1,450 dinars per dollar in the coming months, provided that government measures packages are implemented, while he ruled out that the decline would come close to the official price set by the Central Bank of Iraq.

The exchange rates of the US dollar continue to rise against the Iraqi dinar, in the markets of Baghdad and Erbil, the capital of the Kurdistan Region, for several days.

Al-Kadhimi told Shafaq News Agency, “The price of the dollar will reach 1,450 dinars if the Central Bank’s procedures are implemented to facilitate transfers, arrange tax procedures, and pay them directly without referring to the Tax Directorate, which will provide a reserve and liquidity of dollars in the black markets.”

The dollar is likely to fall to the aforementioned price during the next three months if the scheduled and imposed government measures are successfully implemented.

In response to other parliamentary expectations that the dollar exchange rate would fall to 1,320 dinars, Al-Kadhimi ruled that out, and considered it a far-fetched matter in light of the current financial conditions, even though the government secures the needs of the markets and imported goods at a rate of 80% of its needs through the currency sale window at a price of 1,320 dinars.

Almost since the beginning of this year, the Central Bank of Iraq launched a working mechanism in an electronic platform and the international financial transfer system “SWIFT”, but this did not help the dollar exchange rates stabilize in Iraq, despite the attempts of the government and the Central Bank to control the exchange rate in the parallel (black) markets. ).

In its August 2023 issue, the administration of the Central Bank of Iraq considered the exchange rate of the dollar against the dinar being traded in the markets by speculators “illegitimate,” calling for the need for all parties to come together to achieve stability in the exchange rate, especially since Iraq has Sufficient foreign reserves to meet legitimate needs.

On Wednesday, July 19, the US Treasury Department imposed sanctions on 14 Iraqi banks in a campaign aimed at preventing the dollar from reaching Iran.

As a result, the Central Bank of Iraq decided to prevent the sanctioned banks from dealing in dollars, pointing out that the sanctions were imposed as a result of auditing transfers dating back to last year (2022), before the implementation of the electronic platform, and before the formation of the current government as well.  LINK

The Price Of The Dollar Fell Against The Dinar In The Markets Of Baghdad And Erbil

2023-09-23 03:03  Shafaq News/ Dollar prices decreased today, Saturday, in Baghdad markets and in Erbil, the capital of the Kurdistan Region.

Shafaq News correspondent said that dollar prices fell with the opening of the Al-Kifah and Al-Harithiya stock exchanges to record 155,200 dinars against 100 dollars, while prices last Thursday were 156,000 dinars against 100 dollars.

Our correspondent indicated that the selling prices in the exchange shops in the local markets in Baghdad decreased, as the selling price reached 156,250 Iraqi dinars, while the purchasing price reached 154,250 dinars for every 100 dollars.

As for Erbil, the stock market does not trade on official holidays, but the dollar recorded in banking shops is the selling price of 155,100 dinars against the dollar, and the purchase price of 155,000 dinars against 100 dollars.  LINK

Freezing The Budget... What Is The Relationship Between Political Money And Elections In Its Delayed Implementation?

Posted On2023-09-23 By Sotaliraq    Four months have passed since the adoption of the Federal General Budget Law, but it has not been implemented yet, for reasons that specialists attributed to the delay that occurred in legislating the law and then in issuing implementation instructions, while others attributed it to the fear that its funds would be exploited in the local elections scheduled for December 18. / Next December.

For the first time in its history, Iraq approved a three-year financial budget in a single draft law, which Parliament voted on last June. The government defended the step by saying that it aims to develop plans for important projects in the country, in addition to avoiding the problem of delaying the approval of financial budgets every year for several months.

The budget for the current year and the next two years, according to the budget law, amounted to $153 billion, with an expected deficit of $48 billion, and the oil price was approved at $70 per barrel, as Iraqi oil exports constitute more than 96% of Iraq’s financial imports.

After several months have passed since its approval date, the tripartite budget allocations have not been launched on the ground yet, which has opened the door to speculation and questions about the reasons behind the delay in implementing its provisions.

What is the reason for the delay?

In this context, a member of the Finance Committee in the Iraqi Parliament, Nermin Marouf, said, “The budget law was approved last June, and until instructions for its implementation were issued, more than half the year had passed, so the failure to implement the budget is due to the delay in enacting the law, and Then in issuing instructions to implement them by the Ministries of Finance and Planning.”

Marouf explained, “The government continued to spend 1/12 of last year’s budget, so spending was limited to actual current spending and most of it was for salaries.”[/size]

She explained that “the government needs to spend on investment projects in the current year, so that the ministries and governorates send their plans for investment projects, as spending on investment projects is not the same as current expenditures, but rather includes several stages of preparing the plans, approving them, and approving the projects in the Ministry of Planning.” And then announce it until the project is approved.”

She added, “These projects are financed in installments and according to completion rates, and these take several months, until the investment budget is disbursed on the ground, and this is the first obstacle to not implementing the part related to the investment budget in the current budget.”[/size]

Budget funds

Regarding the fate of the budget funds as the end of the year approaches, Marouf explained, “The funds allocated to the investment budget are transferred to the next year allocated to the projects. These will not end, but rather the spending on these projects will continue until the end of the fiscal year.”

She continued: “As for the unspent funds of the current budget, at the end of the year they become surplus funds from last year, and are rolled over to the next year, and added to the funds that will be allocated from next year’s budget, and this is according to the budget law and the financial management law.”

A member of the Finance Committee indicated, “Before the end of the current year, the Ministry of Finance, through the Council of Ministers, is supposed to send new tables to estimate next year’s revenues and expenditures, but with the same texts as the current law.”

Marouf pointed out that “the texts contained in the law, which are 78 legal articles, will not be changed, but only the estimated spending and revenue schedules for the coming year, so they must be sent again to the House of Representatives for approval, so that the government will be able to implement the budget for the coming year.” “.

Electoral exploitation

For his part, the Iraqi politician, Halim Salman, stated that “the Prime Minister - according to the leaks - put a ‘freeze’ on the flow of tripartite budget funds, for several reasons, including fear that the budget funds would be used to finance the provincial council elections.”

Salman added, “This explains the lack of confidence of the government, senior management, and the Ministry of Finance in political parties and local governments that could exploit budget funds for the benefit of the elections.”

He pointed out that “these reasons have not been officially announced, but it seems that this matter is true, and despite the approval of the budget and the issuance of its instructions, there is still a delay in the process of releasing the funds, which makes it likely that what some politicians have said is correct.”

Financial losses

[size=45]In turn, the economic expert, Jalil Al-Lami, saw that “the Sudanese government is now working to collect funds for the emergency support law that was approved during the time of the previous government, in order to finance some projects that have completion rates, since the remaining period of the year is not enough for the government to announce the projects.” And implementing new ones, or completing old projects, as they have been subject to extinction and a change in estimated cost prices.”

Al-Lami confirmed to the agency that “the delay in sending budget allocations will lead to the cancellation of contracts with international and local companies to develop new cities and governorate infrastructure, which will cost Iraq many losses due to the penal conditions that were placed in the contracts with those companies.”

He concluded by saying that “the budget is the natural financial regulator for the functioning of institutions and departments at all civil and military levels, and for the country to avoid randomness in spending at a rate of 12/1, so there is no justification for delaying the implementation of the budget items.”  LINK

Points to Ponder on Dreaming and Believing:

 Expect your every need to be met, Expect the answer to every problem, Expect abundance on every level, Expect to grow spiritually - Ellen Caddy - The Dawn of Change 

Expect the best: Convert problems into opportunities; Be dissatisfied with the status quo: Focus on where you want to go, instead of where you're coming from; and most importantly, Decide to be happy, knowing it's an attitude, a habit gained from daily practice, and not a result or payoff - Dennis Waitley - The Winners Edge

When you are inspired by some great purpose - some extraordinary project - all your thoughts break their bonds - your mind transcends limitations - your consciousness expands in every direction -- and you find yourself in a new, great and wonderful world -- Dormant forces, faculties and talents become alive, and you discover yourself to be a greater person by far than you ever dreamed yourself to be - Patanjali

Trials are but lessons that you failed to learn presented once again - so where you made a faulty choice before you can now make a better one - and thus escape all pain that what you chose before has brought to you - A Course in Miracles

Your pain is the breaking of the shell that encloses your understanding - Kahlil Gibran

Take heart - truth and happiness will get you in the end -- You can't lose in this game - have fun -- It goes on too long to be taken seriously "all" the time -- John & Lyn St Clair Thomas - Eyes of the Beholder