"Tidbits From TNT" Tuesday Morning 9-7-2021
TNT:
Tishwash: Did the flotation of the dinar save Iraq's economy from Corona and the decline in oil prices?
Last year, Iraq suffered from a stifling economic crisis as a result of the outbreak of the Corona pandemic and the decline in oil prices, which constitutes the backbone of the country's revenues, and the government resorted to floating the dinar to save the economy and pay the salaries of its employees.
The decision to float increased the suffering of the citizens, as the prices of goods witnessed a double increase compared to what they were previously, especially since most of what is available in the local markets is imported from abroad and is subject to the currency difference in dollars against the Iraqi dinar .
And the Central Bank of Iraq decided, at the end of last year, to raise the price of selling the dollar to banks and exchange companies to 1460 dinars.
Creating a competitive atmosphere in Iraq
And Finance Minister Ali Allawi revealed at the end of last month, in press statements, that the process of changing the exchange rate was not easy, stressing that Iraq came out safely from the difficult economic situation, and said that “ Iraq’s financial policy during a year and a half passed through five exceptional circumstances, and that the economy The Iraqi government has changed since 2019 and the obligations of the previous government, and the Corona crisis led to the collapse of oil prices and increased unemployment,” noting that “the government’s policy worked to control expenditures, and thus it was reflected in the state’s revenues.”
The Iraqi minister considered that "the fiscal and monetary policy is reformist, and it is necessary to continue to work with it, and the reform process is correct, and started from the banks and customs," stressing that "the fiscal policy aims at balancing oil and maximizing other resources," and stressed that "the process of changing the exchange rate The dollar should have been done years ago, which reflects something useful for reforming the economic system, as it is not possible to create an incubating environment for a private economy without the government’s ability to change the distortion in public finances.
And Allawi indicated that the exchange rate reflects many issues, and there is a benefit in its increase in some economic sectors, pointing out that the process of changing the exchange rate was wanted to create a competitive atmosphere in Iraq, especially since there is today a balance between demand for currency and supply, and stressed that the ministry aims to stabilize the price of currency. The exchange and will defend it, and government banks aim to support the national economy, not the advances per se, indicating that the government is not against this matter, but must diversify the sources to which these advances go.
Providing cash to the government
The economic researcher Hamza Al-Hardan said that "the main purpose of floating the Iraqi dinar is to provide cash liquidity to the government through the exchange rate difference, and it was not related to solutions to rescue the Iraqi economy, and the evidence is that we did not witness any indicators of local economic growth, as well, the government claimed that it will reduce the bleeding of the Iraqi economy." Hard currency abroad through the currency auction, and the price difference will lead to a significant decline in the exit of hard currency from the country, but as a result, we did not witness any decline in the rates of selling the currency, which sometimes reached higher levels than it was in the old exchange rate.”
He added, "The rise in commodity prices in the market is offset by a decrease in the rate of purchasing power, and all of them are negative repercussions of this decision." According to Al-Hardan, "the government took this decision, and it was the easiest, to provide cash liquidity to pay salaries and obligations during the period of low oil prices and the Corona crisis.
Al-Hardan considered that "the Iraqi economy suffers from continued total dependence on selling oil, and the rentier economy needs solutions, including activating the role of the private sector, providing a safe investment environment and radical solutions to the problems of unjustified government spending."
An expert in international economics, Anwar al-Saadi, said, "The flotation policy may succeed in some countries, but in Iraq's economy it is not of real benefit, because it is a rentier economy that depends heavily on oil revenues. Therefore, the flotation policy requires diversifying the economy to create a state of balance in Supply and demand, but this is considered difficult in Iraq because there is only one player in this equation, which is the Central Bank of Iraq.
Plug the deficit against rising inflation
With regard to the interest in floating the recent devaluation of the dinar, Al-Saadi confirmed that the flotation “only succeeded in closing the deficit in the 2020 budget, but in return it led to a gradual and rapid rise in the level of inflation, thus harming the low-income class, which is predominant in Iraqi society, Due to the reflection of exchange rate differences and the increase in import costs borne by the final consumer, the annual inflation rate rose in December 2020, by 3.2 percent on an annual basis, affected by the change in the dollar exchange rate. In these years, it reached four percent.
Al-Saadi expected, "Consumer prices will continue to rise for the following months. As for the future of the dinar, it is expected that it will maintain its price in the range of 1500 as a maximum for a period of up to more than a year, and if the economic situation improves, it is possible to raise the value of the dinar again."
For his part, the economic expert, Evan Shaker, considered that the decision to reduce the value of the Iraqi dinar against the dollar was
not correct and did not save the Iraqi economy, and on the contrary, it exacerbated the economic crisis, and continued, “The reduction mechanism was random, as well as the rate of approximately 25 percent is very high, and in At the same time, there were no stimulus packages to absorb the shock, revive the economy, and support low-income segments, and on the contrary, unemployment rates increased, and the government failed to create an appropriate environment to support and develop the local industry, so this decision harmed the Iraqi economy as a whole.
The dollar exchange rate reached 1470 dinars to the public, and 1460 dinars to banks operating in Iraq
Shybaby: IRAQ FINANCE EXPO 22 - 23 SEPTEMBER 2021...Learn about the fastest growing economy in the MENA region!
IRAQ FINANCE EXPO
We are delighted to announce the 4th edition of the Iraq Finance Expo, taking place in Baghdad and Online between 22-23 September and Officially Co-Hosted alongside the Central Bank of Iraq and the Ministry of Finance. IFEX is your one-stop-shop in discovering all the commercial opportunities in Iraq’s banking, financial services and FinTech sectors.
Officially Co-Hosted with the Central Bank of Iraq and the Ministry of Finance, IFEX is your One-Stop-Shop to access new commercial opportunities in Finance, Banking, FinTech and Digital Transformation in Iraq.
We are delighted to announce the 4th edition of the Iraq Finance Expo, taking place in Baghdad and Online between 22-23 September and Officially Co-Hosted alongside the Central Bank of Iraq and the Ministry of Finance. IFEX is your one-stop-shop in discovering all the commercial opportunities in Iraq’s banking, financial services and FinTech sectors.
More than four fifths of the adult population of Iraq are today without a bank account. Personal banking is rare and there is a wide-open future for digital financial solutions offering easy, cost-effective payments systems. People in Iraq are ready to leap from an unbanked present to a fintech future. Mobile phone use is extensive and the market is wide-open to mobile banking opportunities. And with a significant global diaspora easy international payments in and out of Iraq will be very welcome.
Iraq’s redevelopment will require trusted and reliable sources of business financing. There is as yet no widespread network that can provide capital to enterprises in many industries with enormous growth potential. Loans to business and commerce from trusted partners are rare. Opportunities are legion.
Join us at the Iraq Finance Expo and discover how your business can be a part of Iraq’s promising financial future.
IFEX will host a dedicated VIP Conference featuring unrivalled content from all the key players in Iraqi Banking and Financial Services.
This exclusive Conference will comprise a 2-day programme including top analysis, discussion and exchanges. Listen to leading VIP speakers highlighting the opportunities within Iraq.
The Conference is the only opportunity to hear from top government officials and bodies on the requirements for Iraq. New companies will be showcasing their disruptive technologies over a 2 day period.
Keynote Address: HE Prof Ali Allawi - IDTS VIDEO - May 2021
H E Mustafa Ghalib, CBI Governor, IDTS VIDEO - May 2021
HIGHLIGHTS
2-day Agenda with top analysis and discussion.
Presentations from leading government officials and multinational executives.
Sector breakdown on key industries.
Technology Showcase across a multitude of sectors.
Discuss opportunities within Iraq’s major projects and network with Tier 1 Investment professionals, C-level corporate leaders, investors and executives from across the globe.
Understand the current business climate in Iraq and the multinationals successfully implanting projects.
Generate leads from a highly targeted audience.
Benefit from the only gathering of finance and banking professionals operating in Iraq.
Learn about the fastest growing economy in the MENA region!
Exhibition on banking and finance in Iraq | Iraq Finance Expo (ifexiraq.com)
************
Tishwash: PLANNING: IRAQ NEEDS TO FINANCE ECONOMIC STRATEGIES TO IMPLEMENT THEM REALISTICALLY
The Minister of Planning, Khaled Batal Al-Najm, stressed today, Monday, that Iraq does not need more economic and development plans and strategies, as much as it needs to fund existing strategies for the purpose of implementing and applying them on the ground.
The ministry stated in a statement received by the "National News Center", that "the minister chaired a joint meeting of the Sustainable Development Goals Follow-up Cell, and the National Committee for Sustainable Development, which includes the undersecretaries of the relevant ministries, their general managers, and a number of experts."
The minister said, according to the statement, that “there are great efforts being made by the government, despite the difficulties and challenges facing Iraq, foremost of which are the repercussions of the Corona pandemic, and the lack of financial resources, which negatively reflect on achieving sustainable development goals,” noting that “Iraq is the only country.” In the region, which presented a plan to recover from the Covid-19 pandemic, which was approved by the Council of Ministers last week.
He added that "a framework for cooperation with the United Nations was concluded yesterday and includes five strategic priorities, which ultimately serve to achieve the sustainable development goals."
The minister went on to say that “there are important practical measures and steps taken by the government, in terms of improving the level of the economy and addressing development gaps, and these efforts and measures included a number of basic sectors such as agriculture, water resources, oil and energy, and the investment of associated gas, and petrochemicals, and there will be many strategic projects. that Iraq will witness during the next few years,” attributing the reluctance to achieve the sustainable development goals, to “the circumstances that Iraq and the world have gone through, as a result of the repercussions of the Corona pandemic.”
And he indicated that "the Ministry of Planning is working towards developing a long-term vision, which takes into account the promotion of the green economy, reducing dependence on fossil fuels, and moving towards renewable energies through the use of clean means."
The statement continued, "The meeting witnessed a review of Iraq's participation in the high-level political forum and the launch of the second voluntary report, presented by the Undersecretary of the Ministry of Planning, Dr. Maher Hammad Johan, while the Undersecretary of the Ministry of Environment, Dr. Jassem Al-Falahi, presented a review of the Iraqi contributions document in the face of climate change, and the Undersecretary of the Ministry of Higher Education presented Dr. Yassin Al-Ithawi, a review of the steps achieved for the Million Tree Project.
The participants in the meeting discussed, “the progress made in launching the Sustainable Development Forum, to be launched soon, as well as discussing and defining the paths of the future action plan and the results of the work achieved. link
JCNoble: hope the banks are correct about this week.
Jwill: Hopefully this will be it this time & not a smoke screen!
Yada: Not a smoke screen jwill. The actions of the PM, CBI, previous meetings with the US, summit outcome, and the signing off by the UN, the lower denoms in the ATM and fils positioned in the market place ready to be used, all indicate release.
******************
Mot: ~~~ Got teens??? ~~~
Mot: ~~~ When I Get These Dieting Tips!! -- Has to Share!! --- from Mot of course!! ~~~
