Iraqi News Highlights Thursday Afternoon 6-8-23
Iraqi News Highlights Thursday Afternoon 6-8-23
Tlm724 Administrator Bondlady’s Corner
Warnings Of Running Out Of Iraqi Cash Reserves Due To Indicators Of The International Economy
Economy | Baghdad today – Baghdad Today, Wednesday, the economist, Bariq Shubar, warned of the depletion of the Iraqi cash reserves, due to the indicators of the international economy and the state of contraction, and the occurrence of actual deficits in the general budget and the Iraqi balance of payments.
Shubbar expected, in press statements, followed by (Baghdad Today), a contraction of the general international economy, a drop in oil prices, and a decline in export revenues, with the continuation of planned government spending in the 2023 budget and subsequent years, which will cause a state of fiscal deficit and depletion of reserves of foreign currency and gold. And the economist said,
"The increase in cash reserves is very important for the future of the Iraqi economy, because of its strategic importance,
but the fiscal and monetary policy pursued by successive Iraqi governments failed to use the reserves for sustainable development purposes." He pointed out that
"the total cash reserves announced by the Central Bank of Iraq include the financial abundance achieved in the past year belonging to the Ministry of Finance, and
it will be withdrawn by the US Federal Bank after passing the 2023 budget." Shubar emphasized that
"the central bank sells large amounts of dollars, which are leaving large amounts of it outside Iraq, and this means that an inevitable decrease will be exposed to the cash reserves."
The Central Bank of Iraq revealed a new statistic that showed the increase in foreign exchange reserves and the quantities of gold available as strategic storage, in addition to its progress in the global ranking among the countries that have the most gold reserves.
And the statistic, which was published yesterday, Tuesday, showed that the cash reserves of the dollar rose until the end of May 2023 to 111.7 billion dollars, from about 77 billion dollars a year ago, and the gold reserves rose to 132.7 tons from 96.4 tons a year ago.
According to the same statistic, Iraq ranked 30th in the world in gold reserves, eight places higher than it was in May 2022.
Despite the increase in monetary and gold reserves, there are warnings about the risks of repercussions of this rise, which will lead to structural imbalances and economic problems that are difficult to treat.
The Advisor to the Prime Minister for Economic Affairs, Mazhar Muhammad Salih, explained that the increase in foreign currency reserves resulted from the oil price differences for the year 2022, as the selling price of a barrel of Iraqi oil reached about $93.
Saleh said, in media statements, that this increase was due to the lack of a budget for the country, in addition to the fact that government spending was limited according to the 1/12 system, with the existence of the food security law, which provided large revenues for the general budget, and this was reflected in the provision of large revenues for the finances. the public.
He referred to the storage available at the Central Bank of foreign currency reserves with budget savings amounting to about 16 trillion Iraqi dinars, which means that the reserves revealed by the Central Bank of monetary currency include the bank's storage with the government's storage.
Iraq Saves The Dollar And Invests In Gold
Immunization of the economy from global fluctuations
Jabbar Zidan is an Iraqi journalist @jabarzed Saturday, June 3, 2023 5:27
The Central Bank of Iraq seeks to convert cash reserves into gold (AFP)
"Gold is an adornment and a treasury."
This saying represents what international banks have reached in terms of storing and buying tons of gold as a result of global price fluctuations,
as the Central Bank of Iraq worked to purchase a new amount of the yellow metal in order to guarantee the country's economy, which depends mainly on oil.
Specialists indicate in an interview with "Independent Arabia" that monetary gold is considered a guarantee to avoid the risks of fluctuations in currency exchange rates in which the investment portfolio of foreign reserves varies, stressing that
it is an essential guarantor to protect the investment portfolio of the Central Bank of Iraq against fluctuations in the risks of the exchange rate of the local currency, the interest rate, and others..
30 Worldwide
And the Central Bank of Iraq announced, last Wednesday, the purchase of new quantities of gold of approximately 2.3 tons, which resulted in an increase in its holdings of this metal by 1.79 percent,
bringing its total to (132.74) tons, maintaining its sequence in the thirtieth rank in the world ranking. Gold holdings of the countries of the world.
The Investments Department stated, according to a statement by the media office of the Central Bank of Iraq, that the purchase came with the aim of increasing its holdings of gold in light of the economic and political conditions the world is witnessing.
Gold is considered one of the most important components of the reserves held by banks and international financial institutions, as
they continuously increase their reserves of this metal, because of this procedure’s positive impact on the financial solvency of these institutions and the creditworthiness of their countries.
Gold Guarantee
In the context, the financial advisor to the Iraqi Prime Minister, Mazhar Muhammad Salih, said that monetary gold occupies within the base of diversifying sovereign foreign reserves an estimated rate of between 7 to 10 percent of the total components of the investment portfolio represented by various currencies as foreign assets, and managed by central banks.
In the world, including the Central Bank of Iraq, according to international standard evidence, in investing that portfolio in various currencies.
Saleh explained that despite gold no longer playing a direct role in the international monetary system today, "central banks and governments around the world, including Iraq , seek to keep record quantities to protect against economic instability," pointing out that
"it is characterized by less fluctuations in its prices." compared to other individual commodities, trading stocks and currencies, across the world's various asset cycle chains.
Investment Stability
For his part, Mahmoud Dagher, a specialist in financial affairs and former director general of financial operations at the Central Bank of Iraq, said,
"The increase in the gold balance means the stability of Iraq's foreign investments that belong to the Central Bank," continuing to say that "currencies are now imitating each other, so it is better That our reserves in gold are the only effect," denying the existence of an impact on the domestic economy.
Financial Transformation
On the other hand, economic researcher Nabil Jabbar Al-Tamimi said that the process of buying gold is driven by financial transformation policies in the midst of the international conflict and expectations of large economic fluctuations in it or fears related to the expected recession, which is what drives investors to buy gold as a substitute for stocks, currencies and other assets.
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Al-Tamimi referred to the contracts signed by the Central Bank of Iraq to buy gold two years ago, during which reserves increased from 98 tons to 132 tons, pointing out that it will not exceed 9 percent of its total reserves today in US dollars, with investments in US Treasury bonds.
Critical Risks
On Thursday, the International Monetary Fund issued a pessimistic statement for the Iraqi economy after recovering from the Corona pandemic last year, as he mentioned a number of fund experts who met in Jordan from May 24 to May 31 to discuss with the Iraqi authorities about recent economic developments and expectations as well as policy plans.
In the coming period, the growth momentum of the Iraqi economy has slowed in recent months, reaching a level lower than before the pandemic.
Experts said that
"oil production is set to shrink by 5 percent in 2023 due to a cut in production (OPEC +) and the
interruption of the (Kirkuk-Ceyhan) oil pipeline, in addition to
fluctuations in the foreign exchange market in the wake of tightening control over combating money laundering as well as financing terrorism." by the Central Bank of Iraq, which negatively affected foreign currency sales.
Growth Estimates
And the fund’s experts stated in their statement that
“estimates indicate that the real non-oil GDP contracted by 9 percent (on an annual basis) in the last quarter of 2022, which cancels its growth during the previous three quarters, with the continued stability of the foreign exchange market with the help of the bank’s measures.”
The Iraqi Central Bank, as it is expected that the growth of real non-oil GDP will resume and reach 3.7 percent in 2023, after rising to 7 percent in January.
The fund noted that "inflation has begun to moderate, reflecting a decline in international commodities, in addition to a 10 percent revaluation of the dinar, and
it is expected that the average will reach 5.6 percent in 2023."
The experts pointed out, according to the statement, that "favorable conditions for the oil market supported Iraq's financial and external situation, but structural imbalances continued to widen, and
in 2022 current account surpluses in public and external finances reached 7.6 and 17.3 percent of GDP, respectively, on the back of revenues." record high oil prices, and the CBI's foreign exchange reserves rose to $97 billion (11 months of imports), including $16.3 billion (6 percent of GDP) in financial savings accumulated by the government, at the time
At the same time, the large fiscal expansion expanded the non-oil primary deficit from 52 percent to more than 68 percent of non-oil GDP during 2022.
Financial Relief
And the statement added that
“the largest fiscal easing envisaged in the draft budget law of 2023 would widen the primary non-oil fiscal deficit to 75 percent of non-oil GDP and bring the total fiscal balance to a deficit of 6.5 percent of GDP.
The combined effects of
increased government spending, a
revaluation of the exchange rate, and
lower oil production have
raised the fiscal breakeven price of oil to $96 per barrel.
Experts stressed that
"in the short term, the implementation of the authorities' financial plans could lead to a re-ignition of inflation and fluctuations in the foreign exchange market, and
in the medium term, the continuation of current policies in the presence of a great deal of uncertainty about the future course of oil prices poses critical risks to the stability of the economy."
If there is no significant increase in oil prices, the current fiscal situation may lead to an increase in the deficit and intensification of financing pressures in the coming years.
Experts emphasized that
"a tougher fiscal policy is needed to enhance flexibility and reduce the government's dependence on oil revenues while protecting critical social spending needs.
Supporting the government's plan to increase social assistance, the mission recommends stronger targeting to ensure it is directed at the most vulnerable.
World Bank: Iraq's GDP Growth Declined By 1.1%
Economy breaking The World Bank Iraqi economy local production
2023-06-07 Shafaq News/ The World Bank expected, on Wednesday, that Iraq's real GDP growth will decline by 1.1% during the current year 2023.
Shafaq News agency viewed a schedule issued by the bank, during which it expected the real GDP growth of Iraq to decline by 1.1% during the year "2023", indicating that
"Iraq's gross domestic product increased in 2021 and 2022, by 1.6% and 7%, respectively, after it It was down 12% in 2020."
The World Bank schedule also showed an expectation that Iraq's gross domestic product would rise again in the next year 2024 and 2025 by 6% and 3.7%, respectively.
The bank suggested that the decline in the gross domestic product of three Arab countries in 2023, namely Iraq and Syria, would be by 5.5%, Yemen by 0.5%, and Lebanon by 0.5%, while the highest growth rate of GDP among the Arab countries would go to Egypt by 4%, followed by Qatar by 4%. 3.3%.
Gross domestic product is measured by the economic performance card, as it is the total value of all final goods and services produced by any country as a comprehensive tool for measuring the production of this country.
It is calculated as follows: Gross Domestic Product = Consumer Expenditure + Government Expenditure + Total Investment + Net Exports.
https://shafaq.com/ar/اقتصـاد/البنك-الدولي-تراجع-نمو-الناتج-المحلي-ال-جمالي-للعراق-بنسبة-1-1
The Head Of Securities Reveals The Reasons For The Fluctuation Of The Exchange Rate Of The Dollar And What Will Happen After The Approval Of The Budget
Economy | Baghdad today – Baghdad The head of the Securities Commission, Faisal Al-Haimus, expected a decrease in the exchange rates of the dollar against the Iraqi dinar and its stability after the approval of the 2023 budget.
Al-Haimus said, in a statement to the official newspaper, that "the Commission supports the Iraqi dinar, although it is mainly the responsibility of the Central Bank," noting that "the stability of the dinar price represents a common interest."
And that "the stability of the dinar will give confidence to new investors to enter the Iraqi market for securities." Al-Haimus added, "The measures taken by the Central Bank led to its decline during the last stage," explaining that "the period of fluctuation in changing the exchange rate will be followed by its stability at the price of 1320 dinars."
Al-Haimus attributed the fluctuation of the exchange rate to the failure to approve the budget and thus the failure to launch projects, "expecting that" approving the budget will lead to entering into the stage of stabilizing the dinar.
He called for the necessity of supporting the government by speeding up the approval of the budget, because it will release funds to projects and enter the work phase, which will provide stability in the exchange rates of the dinar against the dollar.
The Central Bank Hints At The Possibility Of Canceling Some Fines On Banks
news source /the morning The source of the news / morning Baghdad: Ahmed Abed Rabbo The Central Bank of Iraq hinted at the possibility of canceling some fines imposed on private banks that violate the instructions, while stressing that the purpose of the fines is to ensure their compliance with the instructions and not to punish them.
The Iraqi Central Bank expressed its astonishment at the huge uproar that arose in this regard.
During the past days, the controversy escalated between experts and specialists in financial affairs regarding the imposition of fines by the Central Bank on banks, and
they described the monetary policy of the Central Bank as retaliatory and inflexible, especially with the fines exceeding the barrier of 34 billion dinars for the first quarter of this year.
The Deputy Governor of the Central Bank of Iraq, Dr. Ammar Hamad, said to “Al-Sabah”:
“The bank may move towards canceling some fines on private banks and reconsidering them in the event that they were imposed with a miscalculation by the bank’s employees,” noting that “the bank is keen to ensure efficient performance of banks.
He added that the Central Bank “aims to correct the path of some private banks and ensure their compliance with the standards and their commitment to the set timings, especially in the process of sending some of the data required by it in accordance with laws and instructions.”
Regarding penalties for banks that cannot be tolerated, Hamad explained that
“the Central Bank takes harsh penalties for violations related to financing terrorism and money laundering,” noting that this is a “red line.”
The deputy governor attributed the imposition of fines to administrative violations, indicating that most of them do not amount to non-compliance. https://iraqakhbar.com/3961754
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