Saturday Morning Iraq Economic News Highlights 7-22-23

US Sanctions Confuse Iraq's Finances, Suggesting A "Scarcity" Of The Dollar And A New Crisis

Economy  | Baghdad today - follow-up  The decision of the US Treasury Department to impose new sanctions on 14 Iraqi banks, months after imposing similar sanctions on 4 important banks due to financial dealings with Iran and others related to money laundering operations, caused a rapid reaction inside Iraq, as it led to a decline in the value of the dinar against the dollar, in addition to the influx of depositors to the punished banks to withdraw their money deposited in dollars.

And the Iraqi dinar on the Baghdad and Erbil stock exchanges recorded a sharp decline by 1520 dinars per dollar, after it was between 1450 and 1460 dinars on Wednesday. The Wall Street Journal, on Wednesday, quoted US officials as saying that the United States had prevented 14 Iraqi banks from conducting transactions in dollars.

The newspaper's report stated that the ban, imposed by the Treasury Department and the Federal Reserve Bank, is part of "a comprehensive campaign against the transfer of US currency to Iran."

The newspaper added that the United States revealed information that Iraqi banks were involved in money laundering and fraudulent transactions, some of which may have involved sanctioned individuals, and raised concerns that Iran might benefit from these transactions.

Local Penalties

An official source in the Central Bank of Iraq said, “The bank’s management has officially received the imposition of US sanctions on a number of banks, which included each of the Islamic Advisor Bank for Investment and Finance, Al-Qartas Islamic Bank for Investment and Finance, Taif Iraq Company, Elaf Bank, Erbil Bank for Investment and Finance, International Islamic Bank, Trans-Iraq Bank, Mosul Bank for Development and Investment, Al-Rajih Bank, Sumer Commercial Bank, Trust International Islamic Bank, Ur Islamic Bank, Islamic World Bank for Investment and Finance, Zain Iraq Islamic Bank for Investment and Finance.

The source continued: "The central bank administration worked to stop all transactions in dollars with those banks and prevent them from entering the currency auction on Thursday."

And the source, who asked not to be named, indicated that the penalties are local, pointing out that the latter "will not stop all of these banks' work, but will only prevent them from dealing in dollars, while other banking operations will not be affected by the imposed penalties, especially since those banks have bank accounts for citizens worth billions of dinars, and those banks also have many employees' salaries that are localized in them, so this business will continue normally."

He added, "The imposition of US sanctions on 14 Iraqi banks will have a significant impact on the Iraqi economic and financial situation, and these sanctions will have repercussions on raising the exchange rate of the dollar in the local market. Preventing these banks from dealing in dollars will cause a new scarcity in the US currency, and there will be a new resort to buying the dollar and withdrawing it from the market, which raises its value."

The official source in the Central Bank of Iraq concluded, "According to information received from the US Treasury, there is another group of Iraqi banks that may be subject to sanctions during the coming period, due to the monitoring of their illegal activities in sending currency to Iran, especially since money transfers in dollars are all closely monitored by the US Treasury and the US Federal Bank."

Gradual Rise

For his part, a member of the Finance Committee in the Iraqi parliament, Mustafa Al-Karawi, said, "Great economic repercussions will be witnessed by the Iraqi financial market, due to the imposition of sanctions by the United States on a number of banks, including the rise in the exchange rate of the dollar, which witnessed a rapid rise a few hours after the imposition of those sanctions."

Al-Karawi warned that "the rise in the exchange rate of the dollar will not stop and there will be a gradual rise every day, and this matter requires a real government stance and measures to address this matter, which could turn into a cash crisis like the one that occurred during the past months with the beginning of the formation of the new government, and this matter requires Iraqi diplomatic movement towards the US Treasury and the US Federal Reserve."

He added, "The Finance Committee in the Iraqi parliament will work to host the responsible figures and authorities in the Central Bank, to discuss the repercussions of imposing sanctions on a number of private Iraqi banks, and to find out what the bank's procedures are to address the significant increase in the exchange rate in the local market."

On the other hand, Mustafa Akram Hantoush, an expert in financial and economic affairs, told Al-Araby Al-Jadeed that “the imposition of US sanctions will restore the crisis of a significant increase in the exchange rate of the dollar in the local market. It will also have an impact on the reputation of the Iraqi banking sector in front of the international community. These sanctions confirm the involvement of these banks in acts that violate international laws.”

And Hantoush indicated that "the imposition of US sanctions on some banks confirms the lack of Iraqi control by the Central Bank on the work of the sector, in contrast to the US control over the work of banks, which indicates the difficulty of removing any dollar from Iraq towards the US-sanctioned countries, led by Iran."

Not The Last

Hanoush stressed that "US sanctions against Iraqi banks are not the first, and most likely they will not be the last, and this matter requires an Iraqi government position to stop the sanctions on the remaining local banks, and monitor the work of banks regarding preventing dealing in dollars with Iran, Syria, Lebanon and Russia."

In turn, an official at Elaf Bank, one of the banks included in the US sanctions list, said that the bank had received a notice banning its dealings in dollars, stressing in a phone call that "the banks will continue to operate in the local currency," refusing to comment on the US decision regarding the involvement of the sanctioned banks in "suspicious" financial transactions.

And the Iraqi financial expert, Ahmed Al-Janabi, considered that the private banks had failed to implement the Central Bank's instructions, and had become a burden on the Iraqi economy. Pointing out that there are several reasons for the failure of these banks, most notably their reliance on quick profits in the currency auction, without significant financial risks, their inability to attract and develop deposits, and the failure to achieve investment goals due to the failure of private banks to attract real capital and employ them in the economic fields.

Despite the Iraqi government's approval of a package of financial measures, the most prominent of which was fixing the exchange rate of the Iraqi dinar at 1,320 dinars against one dollar, despite the fact that several months have passed since this decision, the difference is still large between the official exchange rate approved by the Central Bank of Iraq and the parallel market.

 Source: "The New Arab"   LINK

Once Again... Exchange Rates Exceed The Threshold Of 150,000 For Every Hundred Dollars

2023-07-22 | 3,009 views  Alsumaria News - Economy

Alsumaria News publishes the exchange rates of the dollar against the Iraqi dinar in the Iraqi local markets, for today, Saturday, July 22, 2023.

According to the "Iraq Stock Exchange website", the exchange rates were as follows:

Offered: 152,000 Wanted: 150,000 South

Offered: 152,000 Wanted: 150,000 North

Baghdad   Shown: 152,000   Wanted: 150,000 

and decided  Central Bank of Iraq  Earlier, the exchange rate of the dollar was adjusted against the Iraqi dinar, as the price of buying a dollar from the Ministry of Finance reached 1,300 dinars per dollar and sold it at (1310) dinars per dollar to banks through the electronic platform, and it is sold at (1320) dinars per dollar from banks and non-bank financial institutions to the final beneficiary.   LINK

Al-Tamimi: The Oil And Gas Law Needs To Include The Decisions Of The Federal Court

Legal expert Ali Al-Tamimi stressed the importance of not violating the decisions of the Federal Court when moving towards approving the oil and gas law, especially since its decisions are final and binding.

Al-Tamimi said in a press interview seen by “Takadum” that “the draft oil and gas law consists of 53 articles, as it required the establishment of the Federal Oil Council, which is chaired by the Prime Minister, and the membership of the Minister of Oil and Finance, the Governor of the Central Bank, a representative of the producing provinces and regions, and experts in oil.

Representing the components of the Iraqi people, setting petroleum policies, issuing instructions for implementing contracts, approving exploration, development and production, approving contracts and other terms of reference stipulated in the project.

He added, "The signing of the contracts is by the Federal Ministry of Oil, provided that it is approved by the Federal Oil Council within 3 months, and it is referred to the Council, otherwise it is considered null and void. The first is that it be service contracts only, not participation.

And he indicated that “the law needs to be imposed on contracting companies to employ Iraqis exclusively, as self-producing countries do, and this is important, in addition to the issue of previous contracts to legislate the law, so it must be stipulated, and the problem with contracting companies other than the constitution and decisions of the Federal Court should be resolved according to the principle of joint management of the two parties, i.e.

The federal government and the region, with the exclusive right to dispose of the federal government in accordance with Article 135 of the Civil Code, which states (whoever disposes of the property of others, his disposition is dependent on the permission of the owner).

He pointed out that “the law needs to explicitly stipulate the penalties that affect the parties that conclude contracts in violation of this law, as well as specifying the oversight bodies that have the right to view these contracts, in addition to its need to stipulate the rest of the oil products, not just oil and gas.”

Al-Tamimi stressed, “The need for the draft law to include the decisions of the Federal Court, especially since these decisions are final and binding on all authorities, according to Article 94 of the Constitution.”

https://takadum-news.com/archives/174698#hathalyoum 

Parliamentary Energy Expects To Resolve The Oil And Gas Law After The Decision Of The International Court In Paris

July 21, 2023  Baghdad / Obelisk Al-Hadath: A member of the Parliamentary Energy Committee expected to “resolve” the draft oil and gas law that has been stalled for years in the House of Representatives due to political differences over it.

Kazem Toki said in a statement, "The legislation of the oil and gas law will be decided because, after the decision of the International Court in Paris, the Kurdish side will leave the political conditions that it clung to and delayed approving the oil and gas law."

He added, "There are also moves by the Oil and Gas Committee and the Prime Minister to complete this issue."

The Kurdistan Regional Government announced Thursday that it had delivered the region's production of crude oil to the federal government since last month.

Omid Sabah, the head of the office of the regional council of ministers, who heads the Kurdish delegation, said in a press conference held in Baghdad, that: “The Kurdistan Regional Government has shown its commitment since the date of last June 25 until today, as the federal government receives 50 to 60 thousand barrels of crude oil per day. Today, the Ministry of Oil confirmed this in the final minutes.

https://almasalah.com/archives/59701

Amber May Disappear.. Drought Is Hardening The Agricultural Plan In Iraq

2023-07-22 | 05:21  Alsumaria News – Local  A landmark of Iraq, the Iraqi amber rice, will leave the provinces that were famous for its cultivation, namely Najaf, Diwaniyah and Muthanna, after drought and water scarcity forced a change in the country's agricultural plan.

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An agricultural life with pale features, a green spirit that migrated, agricultural symbols in grains that their owners weep dry, and a season that will leave the land of Mesopotamia, chasing away with it the hopes and livelihoods of entire families and farmers who used to grow amber rice with areas of about three hundred to four hundred thousand dunums each year, will be idle and outside the agricultural plan for the current season, which threatens the loss of at least 300 thousand tons of the amber rice crop, which is known for its high quality. and its distinctive scent.

President of the local union of cooperative agricultural associations  in Double Awad Atshan Al-Ajibi, explained that "the announced agricultural plan seems fragile and the future of some types of crops, such as rice, for example, has become frustrating for farmers who live on this crop."

He added, "Ministry of Water Resources  She became helpless and idly in front of the dryness of the rivers in which he lives Iraq And agricultural lands will lose their yields, and rice cultivation will be limited to seeds, which means that some governorates will be affected, especially Euphrates Middle kNajaf And Diwaniyah And Double According to the official newspaper.

For his part, the farmer drew Hussein  Abbas Al-Absawy  He pointed out that "the effects of water scarcity will not be limited to the rice crop only, but will extend to many other crops, such as vegetables, fruits, and horticulture of all kinds, and fish lakes will also be affected."

He stressed the importance of finding quick solutions, such as expanding the uses of groundwater or artificial seeding and the use of modern irrigation methods to reduce waste and the like.

The three governorates have become victims of an agricultural plan that does not allow cultivation, but will take care of drinking water first through its reliance on groundwater, he says.  

Khaled North  Spokesperson for  Ministry of Water Resources  "All the current indicators do not allow the implementation of a summer agricultural plan as we used to implement it in previous periods,"

 he added, "will depend on the priorities of raw water processing, the first priority is the priority of drinking water, and the second priority is the provision of water for domestic, health, environmental and industrial uses, while the third priority will be in the agricultural sector and the preservation of orchards and fruitful areas and some simple fruits and vegetables as well as preserving some types of seeds and crop varieties," according to the newspaper.

Negotiations and official and technical discussions are continuing with neighborsTurkeyandIran, but there are no positive signs or features of agreements between the three countries, while the Ministry of Water Resources is calling for a strong government position, devoid of courtesies, in order to seek to save the two great rivers that belong to all humanity, according to the specialists.

The rice cultivation season in Iraq requires flooded water in large quantities, amounting to about 12 billion cubic meters annually, while drought and evaporation made the country's strategic storage of water decline by about 7 billion cubic meters compared to the previous summer season. Therefore, rice cultivation was excluded except for very small areas (from 350,000 acres to less than 10,000 acres only) in order to preserve the seeds of this crop, which would cost farmers and farmers tens of millions of dollars, according to experts.   LINK

Political Warnings From The Legislation Of The Oil And Gas Law Before Resolving The File With The Kurds

Political analyst Hazem Al-Bawi warned, today, Friday, against going towards legislation of the oil and gas law before resolving the file with the Kurds in terms of the violations that occurred and the control of some oil fields by the region.

Al-Bawi said in a press interview seen by “Takadum” that “the Iraqi people know very well that Kurdish parties are the ones that obstructed the course of approving this important law, which has been stalled since many parliamentary sessions, for well-known reasons.”

He added, "The adoption of this law will strike more concessions that the Kurdish authorities unjustly take from the oil file," noting that "most of these concessions relate to the administrative side of the fields, especially those that lie outside the borders of the region in the provinces neighboring Kurdistan, which were seized by the region's authorities inadvertently."

And he stressed that "approving this law in a scientific and sober legal manner will be the factor in fairness to the oil-producing provinces that suffer from poverty and deprivation in the center and south."    https://takadum-news.com/archives/174883