Thursday Morning Iraq Economic News Highlights 12-15-22

Parliamentary Finance comments on the rise in dollar exchange rates in the country

Political | 02:35 - 12/14/2022   Special - Mawazine News, the Parliamentary Finance Committee commented, today, Wednesday, on the rise in the exchange rates of the dollar to more than 151 thousand dinars per 100 dollars.

Committee member Jamal Cougar said in an exclusive interview with Mawazine News, "The committee does not know the reasons for the suspension or weakness in the currency auction, and that, unfortunately, when the supply decreases, the demand increases," noting that "the reasons for the lack of supply are not yet known."

He added, "It is the duty of the government to work on controlling prices because Iraq is a consuming country, and the goods that enter the country are all in hard currency, which necessitates the government to deal with the matter." https://www.mawazin.net/Details.aspx?jimare=214133

What Are The Solutions To Reduce The Dollar Against The Iraqi Dinar?

Money and business   Economy News-Baghdad   On Thursday, economic expert Manar Al-Obaidi presented solutions to address the temporary rise in dollar exchange rates.

Al-Obaidi said in a publication, "The effect of the rise of the dollar against the Iraqi dinar has great repercussions, especially on the fragile class as a result of the rise in prices of various materials, particularly basic foodstuffs," noting that "the price of the dollar is not as important to the simple Iraqi citizen as the high prices of basic materials and high inflation rates are." ".

He explained that "the basis for importing foodstuffs is from Turkey in particular and from Iran," noting that "the most affected materials are flour, meat, vegetables, and other factors affecting the price hike are transportation and operational costs."

He pointed out that "the basis for reducing the vulnerability of these products to the prices of changing these materials is to provide support packages for the import of these materials in order to reduce their vulnerability to exchange rates and also work to reduce the costs of sold fuel, especially diesel and black oil, which will contribute to reducing the operational costs of transportation and operation of capable Iraqi factories."

To compensate for some products, as well as to allow the import of wheat through the private sector in order to operate mills to provide flour products at reasonable prices.

And he warned that "the solutions above are temporary until the return of exchange rates to normal, since the change resulted from procedures and the strength of the Iraqi economy has nothing to do with this rise."   Views 52    Added 12/15/2022 - 9:40 AM   Updated 12/15/2022 - 2:23 PM

https://economy-news.net/content.php?id=31348

Mazhar Muhammad Salij: The Rise In Dollar Exchange Rates Is A Temporary Phenomenon

Economie   10:27 - 2022-12-15  The economic advisor to the Prime Minister, Mazhar Muhammad Salih, considered the rise in dollar exchange rates a "temporary phenomenon" and not a problem with the adequacy of foreign reserves, while stressing that the new measures had imposed a restriction or discipline on the supply of foreign currency.

Saleh said, "The rise in the exchange rate in favor of the dollar is not due to a problem with the adequacy of foreign reserves, as it is a force to intervene in the exchange market and provide sufficient supply to meet the demand for foreign exchange."

He added, "The rises that occurred are a temporary phenomenon dictated by regulatory conditions in the procedures for conducting external transfer requests (submitted by local banks) on foreign currency," noting that "work was done a while ago with an advanced (electronic) platform linking the transfer request by banks." with correspondents from international banks and relevant global compliance bodies simultaneously.

Al-Sudani's economic advisor explained: "During the start of the experiment a few weeks ago, it became clear that there were shortcomings and information deficiencies that were not consistent with the governance of the flow of transfers through the global banking system, which led to some of them being returned again or rejected in order to complete the standard submission requirements and follow the standard foundations in disclosing the final beneficiary and other things." Banking Disclosure and Compliance Requirements.

And Mazhar indicated, "It takes some time to reorganize the requests and their consistency with the global requirements for transfer through the digital platform, which has come to represent the new tool in dealing with the window of the Central Bank of Iraq for buying and selling foreign currency."

Earlier in the day, the exchange rates of the dollar recorded an unprecedented rise when the 100 US dollars reached more than 152,000 Iraqi dinars, which angered the Iraqi people who were hoping for the return of dollar prices to their previous state.    https://kirkuktv.net/AR/Details/11543

The Decline In Oil Prices Confuses The Budget Accounts.. And The Finance Committee: It Will Not Be Explosive

Posted On2022-12-15 By Sotaliraq    Baghdad / Firas Adnan   The Finance Committee in the House of Representatives stated that the decline in oil prices will force Iraq to approve a regular budget after it was planning an explosive one, and talked about five reasons that delayed voting on the project in the government until now, including political differences.

Committee member Jamal Cougar said, "The government was supposed to send the draft budget law to the House of Representatives before the end of the legislative term."

And Cougar continued, “The parliament, and for this reason, had extended its legislative term by one month, hoping that the law would reach it, but that did not happen, and it had no choice but to go to a one-month recess that ends on the ninth of next January.” He pointed out, “The delay in sending the draft budget law was for several reasons, the first of which was that the formation of the government was delayed until the end of last October.”

Cougar explained, “The amended Federal Financial Management Law No. 6 of 2019 stipulates that sending the budget to Parliament must be on October 15, but the government was formed about two weeks after this date.”

And he stated, “The second reason is that the government is still new and has a ministerial curriculum, and it needs time until the budget is formulated in a way that is consistent with this approach,” stressing that “the third reason is the political differences between the federal government and the Kurdistan region.”

Cougar talked about “a fourth reason, represented by the political debate between the blocs that make up the State Administration Alliance that forms the government,” stressing that “every political bloc looks at the budget as an integral part of the ministries it obtained in this government.”

And he stated, "The last reason, which has confused the government's work in recent times, is represented by the drop in global oil prices. After the barrel was at $98, it is now $76." And Cougar continues, “It was expected that a barrel of oil would be included at a price of 75 dollars in the budget, and this decrease, which occurred by about 20 dollars, confused all accounts.”

And he added, "The government draft budget has not yet determined the price of a barrel of oil, especially since the decline in prices coincided with decisions issued by the Organization of Petroleum Exporting Countries (OPEC) through which it reduced the quantities sold."

Cougar believes that “talk about approving an explosive budget has become a thing of the past in light of the new oil prices,” expecting that “the budget will be normal, but it will not fall under the economic pressure that Iraq went through during the year 2021.”

And he considered, “The deficit that the budget will bring is planned and not real, and it will not be large, provided that the federal financial management law is adhered to, which stipulates that the deficit may not exceed 3% of the national product, which was estimated in Iraq at 250 billion dollars,” adding that “the deficit is according to this.” The output should range from 7 to 10 billion dollars.”

Cougar stressed, “The government cannot fulfill any promise, especially in terms of job grades, unless it is included in the budget law, and what is being talked about at the present time is just ink on paper; Because he did not obtain the financial allocation for its implementation.

And he added, “The constitution mandated the government to provide job opportunities, whether in the private or public sector, for citizens, so it either goes to support the private sector by creating many job opportunities, or it goes to launch job grades.”

Cougar added, "The budget will eventually reach Parliament, and next year will witness its approval in coordination between the blocs that formed the government."

And the Finance Committee had previously expected that the total amounts of the budget law for next year would be about 130 trillion dinars, or a little more than that, while it was likely that the deficit would be about 10 trillion dinars.

For his part, another member of the committee, Representative Mueen Al-Kazemi, stated that “the blocs affiliated with the State Administration Alliance had agreements regarding the formation of the government, and some of them related to approving the budget law and the materials contained in it.”

Al-Kazemi added, "The draft law has reached its final stages after the Ministries of Finance and Planning completed all procedures regarding their projects." He pointed out, "The legislative recess will help the government focus more on the law, as this is a space of time that can be invested in order to love your project and make it more commensurate with the general situation."

And Al-Kazemi concluded, that “all procedures have been completed, and only some points remain that are subject to discussion within the Prime Minister’s office, and we expect that they will be voted on within the government during the next two weeks, in preparation for referring them to Parliament.”

It is noteworthy that the ministerial curriculum of the government of Muhammad Shia al-Sudani included a number of paragraphs, the most prominent of which is the acceleration of the preparation of the budget in order to provide services and attention to the investment aspect and the strengthening of state resources through diversification and not being satisfied with oil revenues, which today constitute more than 90% of the general revenue of the state.  LINK

Parliamentary Finance determines the reason for the government's delay in sending the 2023 budget to Parliament

Posted On2022-12-15 By Sotaliraq   The Finance Committee in the House of Representatives spoke of confusion in the government executive apparatus regarding the issue of resolving the price of a barrel of oil within the draft budget law for the year 2023, which is expected to reach Parliament during the coming period.

Committee member Jamal Cougar said, "There is confusion in the government executive apparatus regarding the issue of deciding the price of a barrel of oil, within the draft budget law for the year 2023, which is expected to reach parliament within a short period."

And between: “The price of a barrel will be from 55 to 65 dollars,” explaining that “the price of a barrel of oil when the government was formed was high and approached 100 dollars, and we had expected that the price of a barrel would be from 70 to 75 dollars in the budget, but after the decline in The price of a barrel is about $20 a barrel. This has confused the government, as it cannot yet decide the price and whether this decline is the last, or another decline will follow.

The Advisor to the Prime Minister for Financial Affairs, Mazhar Muhammad Salih, had expected in a previous statement that the value of the budget would be about 140 trillion, and there would be a hypothetical deficit of up to 20 trillion, while the data indicated that the price of a barrel of oil in the budget would be approximately 65 dollars.   LINK