Iraqi News Sunday AM 12-20-20
Iraqi News Sunday AM 12-20-20
TLM724 Administrator BondLady’s Corner
He Describes It As "Immediate Tinkering" ... Parliamentary: Political Parties Behind The Change In The Exchange Rate
Pratha News Agency87 2020-12-20 The MP for the National Approach bloc, Hussein Al-Oqabi, revealed, on Sunday, the "support" of political parties to change the currency exchange rate, considering the current treatments pursued by the Ministry of Finance and the Central Bank to solve the economic crisis, as "immediate patches" and will not solve the essence of the problem.
Al-Aqabi said in a press interview, "The government still believes within our political creed that the government is supported by the parliamentary majority, especially in its strategic decisions, which are signed by large blocks within the House of Representatives." Noting that "the biggest and real problem in this methodology is unable to find any solutions to the financial and economic crisis that we are suffering from."
Al-Aqabi added, "Raising the dollar exchange rate at this level, which may reach approximately 1500 dinars to the dollar, in addition to relying on the rule of leaning without financial and economic policies, maximizing state revenues, rationalizing public spending and not taking bold and exceptional decisions to address the crisis, all of which are the basis of the problem."
Stressing that "there is a great confusion and a useless policy that did not touch the essence of the crisis, considering that our real problem is the administrative and leadership vacuum at the national level, so that it touches the basic needs of citizens and provides real solutions to the essence of the problem so that things can be straightened out properly."
He stressed that "the current solutions are immediate patches and will not solve the essence of the problem in the Iraqi reality," stressing that "the statement of the Minister of Finance and also the Central Bank have worked to confirm the errors and the wrong methodology that the government is going on, and it is clear to us that there are blocks behind government decisions and support them, whether he stated The Minister of Finance did not say so.
The Minister of Finance, Ali Abdul Amir Allawi, confirmed yesterday (December 19, 2020) that adjusting the exchange rate is a political decision of the Iraqi leadership, and it is a decision that enjoys the support of political and parliamentary forces and economic actors that participated with the government in lengthy discussions to reach this measure. http://burathanews.com/arabic/news/382828
Al-Salhi: Parliament Will Reject Any Government Decision That Affects Citizens' Food And Salaries
Pratha News Agency82 2020-12-20 The head of the Turkmen Front, Arshad al-Salihi, rejected, on Sunday, the government's decision to reduce the value of the Iraqi dinar, indicating that Parliament will vote against any decision affecting the lives and daily strength of citizens.
Salhi said in a press statement that "raising the selling price of the dollar to 1450 dinars at once was a mistake committed by the Central Bank and the Ministry of Finance that can be completely tolerated."
He added that "the leaders of the political blocs refused to increase the price of the dollar two weeks ago, based on the report of the Finance Committee rejecting the proposal issued by the Central Bank."
"Raising the price of the dollar will lead to the suspension of local factories because local factories buy raw materials in dollars from abroad, which will lead to an increase in the price of the local product, and any reduction in the employee's salary allocations is illegal," he added.
He pointed out that "putting the hard currency auction to government banks and controlling customs revenues at border crossings brings financial resources to the state." http://burathanews.com/arabic/news/382827
Agricultural Associations: The Exchange Rate Caused A Great Loss ... And The Financial System Bears The Responsibility
Pratha News Agency84 2020-12-20 The General Union of Agricultural Cooperative Societies in Iraq confirmed, on Sunday, that the decision to raise the exchange rate caused a "great loss" for farmers and agriculture, holding the Ministry of Finance responsible for its "ill-considered" decision, as he put it.
The president of the union, Haider Al-Asad, said in a statement that "the Iraqi farmer is the most affected by the high price of the currency that the Ministry of Finance worked on, and it seems that this measure was ill-considered, especially since the ministry still owed the farmer his dues for the last agricultural season."
Al-Asad explained that "the Iraqi farmer depends on imported materials in a large percentage in the agricultural process, such as seeds, fertilizers, plastic sheets and other materials, which are calculated in US dollars while he markets his product in Iraqi dinars, and this will generate a large gap between the cost of the agricultural process and the price of marketing the product in local markets." ".
He continued, "The Ministry of Finance had to pay off the dues it owed to farmers for the last agricultural season, which amounted to almost two trillion dinars before it started raising the exchange rate for the US dollar and causing a heavy loss to the farmer and the citizen alike," blaming the Ministry of Finance "responsibility for this big loss." Ask her to "speed up the payment of dues as soon as possible." http://burathanews.com/arabic/economic/382826
After The Government’s Decisions Yesterday .. The Dollar Exchange Rate Increased Against The Iraqi Dinar Today
Pratha News Agency110 2020-12-20 The exchange rates of the dollar against the Iraqi dinar were published on Sunday (December 20, 2020).
The sale price of the dollar is 146,000 The purchase price of the dollar is 145,000
Today, Saturday, the Central Bank announced officially setting the exchange rate of 1450 dinars per dollar, and 1460 dinars per dollar, the price of selling foreign currency to banks, 1470 dinars per dollar, the price of selling foreign currency to the public.
Justifying this by saying, "Failure to take such a decision may make us forced to take difficult decisions that may put Iraq in a situation similar to what happened to neighboring countries," after statements made by Finance Minister Muhammad Tawfiq Allawi, which focused in this direction. http://burathanews.com/arabic/economic/382784
After Raising The Pric e Of The Dollar .. What Are The Scenarios For The Iraqi Market?
Pratha News Agency81 2020-12-20 Industrial Development and Investment Consultant Amer Al-Jawahry spoke, on Sunday (December 20, 2020), about what the Iraqi market will witness after raising the exchange rate of the dollar against the Iraqi dinar.
Al-Jawahiri said in a press statement that "raising the value of the dollar against the dinar will primarily lead to an increase in the prices of foodstuffs in the local market, in addition to that there are repercussions, possibilities and exploitation that will contribute to raising the prices of other materials," noting that "the commercial movement depends on profit and obscene more than Humanity. "
He added, "The salaries of the employees will be greatly affected, while the employee will remain in his place because the salary is guaranteed."
Regarding the statement of the Minister of Finance, Ali Allawi, on the fact that local production will not be affected by costs, Al-Jawahiri stressed that "local production will be affected by costs because there are many imported factors in local production and the issue of the dollar price is reflected in many aspects of life, including the rise in some wages, and this is reflected in the little increase in domestic production. very ".
He stressed that "changing the exchange rate was a decision taken," noting that "we recommend that there be a gradual change in the exchange rate."
He added, "It is not possible for investment to recover without parallel measures of development and improvement of the investment environment," considering that "the recovery of this sector will not take place without the existence of the debt crisis and the planned deficit."
http://burathanews.com/arabic/economic/382797
The Federal Budget For 2021 And The Rise In The Dollar Exchange Rate
Pratha News Agency93 2020-12-20 Dr. Bilal Al-Khalifa The exchange rate mechanism is the central element in the international financial economy. It is also the pole element in modern financial thinking, and it has great importance in adjusting and settling the balance of payments of the state, especially those developing countries.
The decision taken by the Iraqi government to increase the exchange rate of the dollar against the local value has several advantages, including positive and negative ones. From today, the economic situation of the Iraqi citizen differs from yesterday. The dinar collapses against the dollar and is reflected in inflation rising, and poverty widens further, in a country that floats on oil and has other resources that can be exploited, but its inhabitants are plunged into suffering.
Positive points in raising the exchange rate:
1- The Minister of Finance or experts declares that the new rise is due to the government's endeavor to raise the exchange rate of the dollar so that it can reduce the gap between imports in hard currency from selling oil and what it spends on the country's operating budget, i.e. reducing the budget deficit, as Iraq sells oil with a value of 3.250 million barrels Per day (according to the draft federal general budget), equivalent to (3.25 x 42 dollars = 136 million dollars per day) (49,822.5 billion dollars) (59,787,000,000 Iraqi dinars, or about 60 trillion annually),
2- a number that is not sufficient to pay the salaries of employees of about 70 Trillions of dinars per month, and with the devaluation of the dinar, the deficit decreases and the volume of public revenues is enhanced. The volume of oil imports at the new exchange rate is (49,822.5 million dollars x 1450 dinars = 72,224,262,500 dinars, or 72 trillion) and thus the need for internal and external borrowing is eliminated.
2- Lowering the dollar exchange rate will lead to a reduction in the smuggling and transfer of dollars outside Iraq, and things may be counter-productive, meaning that the dollar will be brought from abroad, and this is evident in the period before 2003 when the dollar was coming from abroad to Iraq.
The disadvantages of raising the exchange rate
1- "The price of the dollar will continue to rise in the coming days, which will greatly affect citizens." Because Iraq does not manufacture or grow anything, and therefore all of its needs are imported, and in dollars, the result is an increase in everything in the market.
2- The state was supposed to have a supervisory apparatus over the economy (it does exist), but the question here is whether the government can control the craze for raising prices and the greed of merchants.
3 - The affected are the poor, who constitute the largest proportion of Iraqi society. ”Likewise, employees have also been affected because the value of their salaries has decreased by a quarter. So, who used to receive a salary of one million, then it is now that of 750,000.
In the days leading up to the date of 12/20/2020, the sale of foreign currency (the dollar) was at a price (1190) dinars, and the Central Bank sells an amount of 250 million dollars (according to a politician's statement), but in the market the price is 1330 dinars, and therefore the loss to the bank is up to ( 1330 - 1190 = 140 (dinars) 140 dinars x 250,000,000 = 35,000,000,000, or 35 trillion dinars.
Suppose that the central bank sells half of the value stated by one of the representatives, or 125 million dollars, the losses will be around 17.5 trillion dinars per day.
· The result
What determines the price of the currency in the markets is the supply and demand for this currency, just like any commodity in the markets. The one responsible for the currency is the central bank, but Iraq, in light of the political and administrative confusion, we see that the bank is subject to the control of the Ministry of Finance, and this is clear and evident from the statement of the Minister of Finance yesterday, and in leaks and statements by representatives and officials in the state that the exchange rate has been agreed upon politically (i.e. the consensus of the blocks And it was a ministerial position or a certain position.
In countries with stable systems, the exchange rate depends on exports and imports, so the stronger the exports are than the imports, the greater the demand for the local currency, and vice versa, the more the trade balance in favor of trading partners decreases, the more demand for the currency decreases and pushes its price down against other foreign currencies.
1- Unfortunately, as is the government's habit of not finding viable solutions to get out of financial crises and obtain sustainable resources outside the oil sector, we find that they are heading to immediate solutions that contain negative aspects of the citizen directly, and the increase in the price of the dollar is nothing but an example of immediate and prosthetic solutions.
2- Let us assume that the matter is urgent and a remedy must be found in order to reach strategic solutions (of course it does not exist), so it was optimal for it to raise the value of the exchange gradually and for long periods and study the effect of this solution and whether it is successful is a matter with a negative impact, and also that the decision-makers have sufficient time to find Sustainable solutions.
3 - It was better for the government to go to the idle resources such as collection, taxes, and outlets that are not controlled and informal (such as the outlets in the region).
4- As a solution and treatment for the poor classes, it is to control the price of basic foodstuffs and medical materials, by selling the dollar at the old price to the merchants who import the aforementioned materials, and thus we guarantee that these new pricing will not harm the simple citizen. http://burathanews.com/arabic/economic/382802
Al-Faily: The Minister Of Finance's Statements Indicate That He Is Not Aware Of The Accumulated Suffering Of Iraqis
Time: 12/20/2020 15:49:51 Read: 416 times {Baghdad: Al Furat News} A member of the Parliamentary Economic and Investment Committee, Mazen Al-Faili, said today, Sunday, that the statements of the Minister of Finance that most of the Iraqi savings are in dollars indicates a lack of awareness and awareness of the reality of the Iraqis and their accumulated suffering.
Al-Faili said in a statement, a copy of which was received by {Al Furat News}, that "we are surprised by the statements of the Minister of Finance, Ali Allawi, as he states that most of the Iraqi savings are in dollars, so there is no need for concern, which indicates a lack of awareness and awareness of the reality of the Iraqis and their accumulated suffering. In its official reports, the poverty rate has exceeded 25% of the Iraqi people, and they do not receive the minimum sources of income required to provide for the essential human needs. Mad
He added, "Those who are included in the retirement, their average monthly salary does not exceed six hundred thousand dinars, and likewise the majority of employees, the average of their salaries does not reach one million dinars. Are such sums sufficient when most of them do not own homes and bear paying the monthly rent for housing to meet their basic needs until it is said that they save in dollars?"
"We believe that the government's way of thinking that is deduced from such statements that are far from the reality of matters and are confined to theoretical frameworks separated from the reality of the painful people will lead to more confusion and ill-considered decisions, exacerbating the pain of the poor, the low-income brackets and the majority of employees," Al-Faily explained.
Al-Faili added, "We call on parliament to assume its responsibility in addressing this methodology that is steeped in imagination and preventing any attempts to compromise the salaries of employees or restrict the limited income." Forgiveness Al-Khalidi LINK
Al-Kalabi: Collecting Signatures For An Emergency Session In The Presence Of Al-Kazemi, Allawi, And The Governor Of The Central Bank
Time: 12/20/2020 15:35:06 Read: 2,782 times (Baghdad: Al Furat News) Member of Parliament Yusef Al-Kalabi announced today, Sunday, that the signatures of an emergency session will be collected in the presence of Prime Minister Mustafa Al-Kazemi, Minister of Finance Ali Allawi and Central Bank Governor Mustafa Ghaleb.
In a statement, Al-Furat News received a copy of it, Al-Kalabi stated that “the signatures of MPs are being collected for an emergency session on 12/23 in the presence of Prime Minister Mustafa Al-Kazemi, Minister of Finance Ali Allawi and Governor of the Central Bank, Mustafa Ghaleb, to discuss:
1- The reasons for the decline in the exchange rate and the classification of banks The fiscal policy followed
2- The World Bank’s agreement with the financial and central government, conditions and obligations
3- Reasons for the low application of the government curriculum
The Central Bank of Iraq had raised the exchange rate of the dollar against the Iraqi dinar to 1470 dinars for the public and 1460 dinars for the banks participating in the currency auction.
The decision caused concern and fear among Iraqis, especially employees, of high prices, and had already negatively affected the movement of commercial centers and important markets such as Shorja and Jamila Alwa in Baghdad.
Central Bank Governor Mustafa Ghaleb said that the bank "will double the sale of the dollar to exchange companies," indicating that "the abundance of dollars will make it stable in the market."
He pointed out that "the Ministry of Finance formally requested an increase in the exchange rate of 1450 dinars to one dollar and we asked for his presence to explain the reasons for raising the value of the dollar," stressing that "the Iraqi reserve is still in good standing." LINK
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