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"Tidbits From TNT" Tuesday Morning 11-24-2020

TNT:

Tishwash:  The Central Bank holds a meeting with the Bank for International Settlements (BIS) (CBI)

The Central Bank of Iraq held a remote meeting with the Bank for International Settlements (BIS) to discuss prospects for joint cooperation and investment mechanisms between the two parties.

The two parties agreed on the contribution of the Bank for International Settlements to enhance the capabilities of the Central Bank of Iraq and increase investment opportunities in foreign reserves.

The Bank for International Settlements is an international institution that provides services to central banks that seek to enhance global monetary and financial stability,

And that through its activities in achieving a balance of the priorities of strategic importance for central banks in managing reserves,

 And ensuring a good understanding of liquidity management and diversification in order to obtain good returns to meet their needs,

 As well as providing credit brokerage services, gold, foreign exchange and asset management, including an integrated management function

 For financial and operational risks and properly control them.

The Central Bank of Iraq  information Office

November 21, 2020  link

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Tishwash:  Al-Kazemi: The government is keen to facilitate all procedures for investors

Prime Minister Mustafa Al-Kazemi affirmed, on Tuesday, November 24, 2020, the government’s keenness to facilitate all procedures for investors.

Al-Kazemi said during the cabinet session that investment is a priority for us, and the government is keen to facilitate all procedures for investors.

He added that the ministers should pay great attention to investment projects, to provide job and reconstruction opportunities and revitalize all vital sectors.  link

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Harambe:  Bloomberg: Cash-Strapped Iraq Seeks $2 Billion Upfront Payment for Oil

(11/23/20)

Iraq is seeking an upfront payment of about $2 billion in exchange for a long-term crude-supply contract, the latest sign of Baghdad’s growing desperation for cash.

The Middle Eastern country is grappling with an economic crisis caused by the combination of low oil prices and OPEC+ output cuts. As state coffers crumble and school teachers go unpaid, the country risks a repeat of the upheaval that brought down the government and saw hundreds of protesters killed last year.

 In a letter to oil companies seen by Bloomberg News, the Iraqi government sought to mitigate its dire financial position by proposing a five-year supply contract delivering 4 million barrels a month, or about 130,000 barrels a day. The buyer would pay upfront for one year of supply, which at current prices would bring in just above $2 billion, according to Bloomberg News calculations.

 The letter from SOMO, the Iraqi state-owned agency in charge of petroleum exports, was first reported by the Iraq Oil Report.

“SOMO, on behalf of the Ministry of Oil, has the interest to propose a long-term crude-supply deal in exchange for prepayment for a fraction of the total allocated quantity,” according to the letter, which was marked strictly confidential. It asked potential buyers to respond by Nov. 27.

Loan Security

Cash-strapped oil producers have often relied on pre-payments deals to raise cash, but Baghdad hasn’t done so until now. The semi-autonomous Kurdistan Regional Government in northern Iraq has used similar contracts in the past, as have Chad and the Republic of Congo.

 In a pre-payment deal, the oil buyer effectively becomes a lender to the country. The barrels are a security for the loan, much as borrowers use their homes as collateral for a mortgage.

For Iraq’s federal government, the loan could help address divisions between lawmakers and Prime Minister Mustafa Al-Kadhimi, who only came to power in May and has warned the government will struggle to pay civil servants.

“They need the money,” said Ahmed Mehdi, an expert on the Iraqi petroleum industry at the Oxford Institute for Energy Studies. “On a monthly basis, the government is short around $3.5 billion to pay for salaries, imports, pensions and debts.”

Crude Sweeteners

All OPEC+ countries have suffered economic hardship, but Iraq is in the weakest position. Although crude prices have recovered from the worst of this year’s slump, they are still down 30% this year. Members of the Organization of Petroleum Exporting Countries also have less oil to sell because of the cartel’s deep production cuts.

Iraq’s gross domestic product will contract 12% this year, more than that of any other OPEC member under a production quota, according to International Monetary Fund forecasts.

 In the letter, Baghdad asked the potential buyer to pay, on signature of the contract, for 48 million barrels due to be shipped between July 2021 and June 2022. It sweetened the proposal by allowing the buyer to ship the crude to any facility anywhere in the world during that one-year period.

 Traditionally, Middle Eastern nations restrict where buyers can deliver their crude, limiting the ability of traders to exploit price disparities between Asia, Europe and the U.S. They also limit re-selling, forcing buyers to refine the barrels themselves, which can also curb potential profits.

 https://www.bloomberg.com/news/articles/2020-11-23/cash-strapped-iraq-seeks-2-billion-upfront-payment-for-crude

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Tishwash:  Calls to maximize resources and stay away from continued borrowing

Economic experts warned that the government's continued use of domestic and external borrowing to finance the fiscal deficit in spending, because it has future economic and financial implications for the country, while calling for real economic reforms to maximize the country's financial resources.

Multiple resources

"The government should move away from borrowing and think about alternatives that could be new resources for the state," she said, adding that "Iraq has multiple resources that can be used to diversify its economy."

"The confused economic policies adopted by successive Iraqi governments have made the Iraqi economy hostage to oil prices, which means that high oil prices are reviving the economy and falling prices are leading to deflation," she said.

 Vital sectors

She continued: "Most oil countries began to think about alternatives to oil through the activation of vital economic sectors such as industrial, agricultural, tourism and even the sectors of services, transport, education and others, indicating that the government promised to submit a reform paper to parliament and has not yet been submitted.

"The use of loans is not a solution to the financial crisis, but it exacerbates the crisis, because the state does not have enough revenues to pay off the debt, especially since external debt entails conditions, consequences and interest," she said. 

"Real reforms must be carried out, starting with fighting corruption and controlling all border crossings, including those in the Kurdistan region, to diversify the state's financial resources," she said.

Borrowing policy

Economist Ahmed Al-Majdi warned of serious consequences for the national economy if borrowing policies continue.

"The government is required to develop appropriate solutions for the purpose of freedom from the economy," al-Majdi told Al-Sabah.

"The solutions include developing clear plans and visions to control the ports and automate them, activating customs duties and taxes, supporting the private sector, involving it in various state activities, encouraging investment in various vital sectors, whether industrial, agricultural, tourism, services, transportation, education, etc.," he said, adding that "these could create new financial resources for the state instead of tying the state with financial debts that Iraq will continue to pay for the coming years."

link

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Mot:  Widowed mother of 9, working as a school janitor, left speechless by amazing Secret Santa gift

https://www.youtube.com/watch?v=0brex9zczu0

Secret Santa is back and this Christmas is bigger than ever! ~~~~~

https://www.youtube.com/watch?v=FC5yd7ysqxY

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