Iraq News Highlights and Points to Ponder Late Friday Evening 8-23-24

Economist Points To A “Solution” That Will “Lower” The Dollar Exchange Rate

Baghdad Today – Baghdad  Today, Thursday (August 22, 2024), Mustafa Akram Hantoush, an expert in economic and financial affairs, commented on the reasons for the fluctuations in the dollar exchange rate in the Iraqi markets.

Hantoush told Baghdad Today, "The parallel market needs to be dismantled in order for the exchange rate to decrease.

Previously, there were solutions to the issue of cigarettes and gold, and the tax was reduced and the merchant was allowed to buy through the platform again, and the exchange rate stabilized at 145 thousand dinars."

He added, "We have small traders who do not have a facilitating mechanism, and we have trades such as gold and cleaning materials that have not been processed, and we have huge trade with Iran and Syria worth millions of dollars, and these can be processed by giving them currency or gold," stressing that "most countries have solved the problem of trade with Iran, despite the American sanctions imposed on them, and solved the problem of travel to those countries."

The dollar exchange rate in the parallel markets rose again, as the markets recorded prices close to 150,000 dinars for every 100 dollars, even though the Central Bank of Iraq sells it at 1,320 dinars for every one dollar.

With the government's efforts to control prices in parallel markets, commercial markets witnessed a decline in the exchange rate in recent weeks, but it rose again, which indicates an economic problem that is still present in the country.

In response, parliamentarians raised a movement to question the governor of the Central Bank within the legislative dome, as the Finance Committee in the House of Representatives, on Sunday (August 4, 2024), directed a request to the Presidency of Parliament to question the governor of the Central Bank .

A document signed by the members of the Finance Committee, received by Baghdad Today, stated: “We, the members of the Finance Committee listed below, are the signatories for the purpose of hosting the Governor of the Central Bank due to a major defect in the management of the bank .”

The document added: "Therefore, we demand that the Governor of the Central Bank be questioned in the nearest session, in accordance with the applicable articles of the constitution and internal regulations."   LINK

Economist Puts “Extortion, Bribery And Smuggling” As The Main Causes Of Dollar Exchange Rate Fluctuations

Posted On 2024-08-21 By Sotaliraq  Economic researcher Diaa Al-Mohsen placed the blackmail, bribery and smuggling operations carried out by dollar dealers who are unable to disclose the sources of their money as the primary reasons for the fluctuation of the dollar exchange rate in local markets.

Al-Mohsen explained that “the old authority is still struggling to address the issue of the dollar exchange rate. All the measures it has taken since taking over the management of the Central Bank barely touch on the real problem that led to these increases, which in one way or another had a major impact on the economic situation of the Iraqi family.”

He noted that “the Iraqi market depends entirely on securing its needs through imports that eat up all the revenues generated from Iraqi oil sales.”

In an interview with Al-Mada, Al-Mohsen pointed out that “there are many reasons for the fluctuation of exchange rates other than the above, as many dealers do not enter the dollar for reasons related to the nature of the money they obtain (the national currency).

Some obtain the Iraqi dinar through bribery, others obtain it through blackmail, some of them deal in drugs and human organs, and many others cannot disclose the sources of their money or the final beneficiary of the process of sending it abroad, which exposes them to many legal problems and may expose them to penalties according to Iraqi law.”

He pointed out that “these people are forced to go to the black market to request dollars, and thus the exchange rate of the dollar against the Iraqi dinar rises to increase the demand for the dollar.

We should not forget that there are those who smuggle dollars by tampering with the documents for importing goods, and this tampering occurs at border crossings, and in the end the country is the biggest loser and behind it the ordinary citizen.”

Regarding the dominance of the dollar, the economic researcher continued, “There does not seem to be a glimmer of hope on the horizon to get rid of the dominance of the US dollar as long as the bank’s management insists on keeping the Iraqi economy revolving in the orbit of the US dollar.

If there was a real administration working for the benefit of the national economy, it would have done everything in its power to diversify the sources of currencies it deals with, which is what the current administration does not want.”

He continued, "I believe that the government should seriously consider activating the economic sectors, especially with the Central Bank of Iraq talking about reserves exceeding $115 billion. It is possible to simplify the procedures for granting loans to project owners who have feasibility studies for the projects they want to implement that are in the interest of the Iraqi economy, and grant them soft loans in exchange for the project being the collateral, to reduce the gap between market requirements and imports, and to bridge this gap by increasing local production to cover the needs of the local market and by relying on modern technology in relation to industries, and by relying on modern agricultural techniques in relation to agriculture."

 He stressed, "Only here will we have put the Iraqi economy on the right path, and as for words other than what we said, they will be nothing more than plowing the sea."

The dollar exchange rate in the parallel markets in Iraq rose again, as the dollar price recorded an increase with the closing of the Al-Kifah and Al-Harithiya stock exchanges to reach 149,300 dinars for every 100 dollars, while it recorded a decrease last Saturday with the closing of the Al-Kifah and Al-Harithiya stock exchanges to reach 149,550 Iraqi dinars for every 100 dollars.  LINK

Is Iraq Heading Towards Printing New Paper Currency?

Money and business   Economy News – Baghdad  Committee member Moeen Al-Kazemi said in a statement followed by "Al-Eqtisad News": "There is no intention to print new paper currency at the Central Bank," noting that "the Ministry of Finance began funding ministries and governorates with salaries two days ago."

He added that "the cash mass required monthly to pay employees' salaries is estimated at four million employees and four million beneficiaries of the Retirement Authority and two million social care, which is approximately 7 trillion and 500 billion dinars."

 He continued that "this quantity is prepared monthly and there is no shortage in this aspect, considering that the current export is approximately 3 million and 400 thousand barrels of oil at a price of more than $ 75 per barrel."

He explained that "providing the necessary liquidity is done by the Central Bank and delivered to the Ministry of Finance, which in turn delivers these numbers and the cash mass to the ministries and governorates, and there is no acute problem regarding cash liquidity." 360 views  Added 08/22/2024 - https://economy-news.net/content.php?id=46608

Parliamentary Finance: Iraq Needs More Than 7 Trillion Monthly To Finance Salaries

Economy    22:03 - 2024-08-22  Member of the Parliamentary Finance Committee, Moeen Al-Kadhimi, announced today, Thursday, that the Ministry of Finance needs more than 7 trillion dinars per month to finance salaries in Iraq.

Al-Kadhimi explained in a press interview that "the Central Bank of Iraq continues to provide cash liquidity to the Ministry of Finance, which in turn provides it to citizens directly through the disbursement of salaries, loans, and financing of projects."

He continued, "the Ministry of Finance needs more than 7 trillion dinars per month in cash to finance the salaries of employees, retirees, and beneficiaries of the social protection network."

Al-Kadhimi stressed that "employees' salaries are fully secured and there is no delay," noting that "the Central Bank provides cash liquidity to the Ministry of Finance periodically to disburse employees' salaries on time."  https://kirkuktv.net/AR/Details/22025

Oil Revenues Under The Microscope Of The Extractive Industries Transparency Authority

Economic  08/22/2024  Employing oil revenues to achieve effective economic development was the focus of discussion among economic experts participating in the workshop to discuss the performance evaluation reports of the Extractive Industries Transparency Authority.

The attendees focused on the extent to which oil revenues contribute to achieving sustainable development that provides a decent life for society and contributes effectively to eliminating poverty.

The motives for issuing these reports also come from the fact that Iraq is the third richest country in the world in terms of abundant natural resources.

Oil expert Dr. Ali Nima said: Iraq joined the Extractive Industries Transparency Initiative in 2011 and issued 13 reports, and the 14th report is under completion.

He pointed out that the initiative has evolved from what it was and has now focused on where the revenues are invested? How much?

Where were the quantities of oil sold and the prices, in addition to the contracts and how are they organized?

He pointed out that the report issued is extremely important as it contains accurate information about all aspects of this sector, oil sales operations from SOMO and the Oil Products Distribution Company. The report also includes production quantities according to each company and the average export price in Europe, America and Asia, and how prices are compared.

Nima pointed out that the issue of social benefits of oil companies towards local communities has witnessed development in this regard, and the (benefits) are now directed to sectors that truly serve those areas, raise the level of services provided to the local community, and make it feel the presence of real support.

Adnan Bahiya, a specialist in transparency affairs in extractive industries, said: The main objective in preparing transparency reports in extractive industries is to show the extent to which oil wealth contributes to achieving real, sustainable development.

He pointed out that the motives for issuing these reports come from the fact that Iraq is the third richest country in the world in terms of abundant natural resources that have not reflected their positive impact on society and the economy in general.

Rather, we find poverty rates in the country varying from one governorate to another, and this was not supposed to happen in a country like Iraq, as we find poverty rates in Basra Governorate reaching 15%, in Kurdistan 6%, and in other governorates exceeding 30% despite the existence of a large amount of wealth in Iraq.

Bahiya stressed the necessity of employing financial revenues in real development that contributes to raising the percentage of the national product and not going to easy revenues that come through taxes and raising their percentages or their experience from this form of revenue, indicating that Iraq is a country capable of rising strongly and creating real sustainable development and that this matter requires a real and effective will.

Bahiya stated that the mission of the Transparency Commission is to clarify the paths of financial revenues, as Iraq cannot be a country rich in resources and suffer from an economic decline in many aspects of the economy.

Bahiya sees the necessity of working towards a real direction towards sustainable development through a serious and gradual approach to the sectors that have the elements to start the renaissance, as there are natural and human resources in Iraq that can be employed in a way that creates the highest levels of benefit.   https://alsabaah.iq/101529-.html