“Tidbits From TNT” Monday 12-15-2025

TNT:

Tishwash:  Fitch affirms Iraq's credit rating at (B-) and praises "internal stability"

The Iraqi Ministry of Finance announced on Monday that the international credit rating agency Fitch has affirmed Iraq’s sovereign rating at (B-) with a “stable” outlook.

The ministry said in a statement, received by Shafaq News Agency, that this step reflects international confidence in the ability of the Iraqi economy to maintain its financial and credit stability despite the current global and regional challenges.

The ministry explained in its statement that the Fitch report highlighted positively the strength of internal stability in Iraq, noting that the internal situation has remained resilient and stable during the past months, which reflects the success of government policies in keeping the Iraqi arena neutral from regional conflicts and escalating tensions in the region.

The Iraqi Ministry of Finance added that the agency also noted the significant improvement in the security situation, which has strengthened the country’s ability to absorb successive geopolitical shocks, pointing out that oil revenues still constitute a major support for the Iraqi economy, providing a financial base that contributes to the sustainability of service provision and the running of state affairs.

The Ministry of Finance affirmed that maintaining the rating with a stable outlook provides an incentive to move forward with the implementation of the structural reforms adopted by the government, which aim to maximize non-oil revenues, improve the efficiency of public spending, and address the challenges associated with approving future budgets, thereby reducing financial uncertainty and enhancing the path of economic development.

The ministry renewed its commitment to working according to strategies aimed at diversifying sources of income and strengthening the pillars of the national economy, taking advantage of the state of security and political stability to enhance the confidence of international financial institutions in the future of the Iraqi economy.

A credit rating is an indicator of a country's ability to meet its financial obligations and repay its debts. Fitch Ratings' affirmation of Iraq's rating at (B-) means that the country is still able to repay, but it faces potential financial and economic risks, which keeps borrowing costs relatively high and makes investor confidence cautious, without registering a substantial improvement or decline in the financial situation, according to specialists.

Fitch Ratings is one of the world’s largest credit rating agencies, along with Standard & Poor’s and Moody’s. It is based in the United States and specializes in assessing the creditworthiness of countries and companies. Its ratings are based on economic, financial and political indicators and are used globally by governments, investors and financial institutions to estimate investment and borrowing risks. link

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Tishwash:  My perspective on the dinar and economic reform, based on what Dr. Nabil Al-Marsoumi wrote about them.

With all due respect to you, my dear professor Dr. Nabil Al-Marsoumi, and with all due appreciation for your knowledge and expertise, from which I have always benefited, I hope you will allow me to present the following points to you, in response and commentary on what you wrote about economic reform a few days ago, as follows:

1- The “White Paper” was never a reform paper, and it never will be. In it, the wrong measures and government corruption were imposed on the people, as they were exposed to inflation due to the reduction in the exchange rate of the dinar, and stagnation prevailed in the markets due to the contradictions in the economic measures, not to mention the exploitation of the economic crises by those in power and their entourages to make profits and accelerate the wheel of smuggling.

2- I agree with you, my dear professor, that the economic crises in developing countries are caused by errors in macroeconomic policies, and I also agree with you on the necessity of cooperating with the International Monetary Fund and the World Bank. However, I do not agree with you, nor with the pillars of the Iraqi government that approved the “White Paper” prepared by the World Bank, with nominal Iraqi participation, regarding many of the items and measures contained in the ill-fated White Paper.

I do not agree with placing the plans to address the Iraqi economic crises under the authority of the World Bank or others. Rather, I call for the solutions to be purely Iraqi, in cooperation with international financial institutions, as Iraq is full of good economic personnel, both inside and outside the government.

3- In my view, seeking to reduce the exchange rate of the Iraqi dinar is an economic crime that should only be resorted to in extreme emergency situations, when other means are exhausted. Iraq has multiple available means to address its economic crises, such as borrowing, rationalizing the budget, reforming food rations and social welfare, regulating salaries, limiting appointments, and eliminating underemployment, among others. These measures will be painful, as you mentioned, but they are certainly better than the effects of stagflation, which will burden the rich before the poor.

4- Floating the Iraqi dinar, in the current state of the Iraqi economy, contradicts the most basic rules of economics, not to mention its contradiction with reason and logic. Economically, floating occurs in a balanced free market where there is a real opportunity to achieve a fair exchange rate. This is impossible to achieve in the current Iraqi economy, as the only party that possesses dollars and hard currencies is the Central Bank of Iraq. As for the Iraqi market, it obtains hard currencies from the Central Bank, because Iraq is an importing country and not an exporting one, and most traders do not possess hard currency because they do not export, but rather they depend on the Central Bank to provide foreign currency liquidity. Consequently, there is no balanced market in which hard currency is available to everyone, and it is a market governed by what the Central Bank provides of hard currency, so competition becomes impossible, and achieving a fair exchange rate becomes impossible.

5- Promoting the idea of ​​floating the dinar and reducing its exchange rate in the markets and among the general public is extremely dangerous. It is a preemptive move for possible future measures that may not happen, and if they do happen, they may not be soon. Occupying the markets with this type of idea presented as a solution is harmful and not beneficial. Therefore, I recommend staying away from it and leaving the idea of ​​floating the dinar and reducing its exchange rate to the next government.

6- The economic reform process will be harsh and costly for the poor and those with limited and middle incomes, as you mentioned. The government must strive to alleviate the burden of this harshness and cost by improving economic, security, and social performance, and by formulating a national reform paper, with the participation of the concerned parties, the government, society, and markets, and with the assistance of local, international, and UN financial institutions.

6- Economic reform measures will not be effective unless they are accompanied by good intentions from those who take them. Corruption and mismanagement have brought Iraq to this state, and its continuation means the inevitable failure of reform measures. I think the time has come for the marginalized class of the national elite and entrepreneurs in the markets to take their place in the constructive and effective contribution to managing the course of the economy in Iraq, whether those in power accept it or not.  link

Tishwash:  Iraqi Foreign Minister: Ending the UNAMI mission in Iraq reflects the progress and stability achieved.

United Nations Secretary-General Antonio Guterres expressed his pride in the ongoing cooperation with Iraq on Saturday, while Iraqi Foreign Minister Fuad Hussein affirmed his country's appreciation for the international organization's role during previous phases.

A statement from the Iraqi Ministry of Foreign Affairs, received by the Iraqi News Agency (INA), stated that "Foreign Minister Fuad Hussein received the Secretary-General of the United Nations, Antonio Guterres, upon his arrival at Baghdad International Airport."

The statement explained that "this visit came on the occasion of the announcement of the end of the work of the United Nations Assistance Mission for Iraq (UNAMI), after years of carrying out its tasks in supporting the political process, promoting stability, and providing advice and assistance in various fields."

During the reception, the Minister affirmed the Iraqi government's appreciation for the role played by the United Nations and UNAMI in supporting Iraq during previous phases, noting that "the termination of the mission's work reflects the progress and stability achieved, and embodies Iraq's ability to manage its national affairs and strengthen its sovereignty and constitutional institutions."

For his part, the Secretary-General of the United Nations expressed his "pride in the existing cooperation with Iraq," stressing "the continued support of the international organization for Iraq through new cooperation frameworks that are appropriate for the next stage, and that enhance sustainable development and international partnership."

United Nations Secretary-General Antonio Guterres arrived in Baghdad this morning to participate in the official ceremony marking the end of the mandate of the United Nations Assistance Mission for Iraq  link

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Mot:  Where Would You Like to Sit!!!