"Tidbits From TNT" Wednesday 4-3-2024
TNT:
Harambe: Zimbabwe Set to Announce Fate of Local Currency After 73% Plunge - Bloomberg 4-3-24
Zimbabwe’s currency plunged to yet another record low as citizens rushed to the safety of the US dollar amid speculation an announcement from the central bank on the fate of the local unit is imminent.
The Zimbabwe dollar traded at 22,476 against the greenback, taking its losses this year to 73%, the world’s second-worst performance only after the Lebanese pound. A sense of urgency has gripped the nation after authorities brought forward the start date of the new governor, John Mushayavanhu, by a month.
The local media reported the move was made to announce a new currency plan that may include embracing the gold standard.
The southern African nation’s unstable currency risks sending the nation back into hyperinflation 15 years after its old local dollar had to be abandoned. The latest two Reserve Bank of Zimbabwe governors, John Mangudya and Gideon Gono, failed to bring order to the exchange rate despite multiple efforts.
These included the launch of gold coins and gold-backed digital tokens under Mangudya’s watch, while Gono repeatedly slashed zeros off banknotes as hyper-inflation spiraled and topped 231 million percent in 2008.
“What we are seeing is anxiety and people preferring to hold US dollars,” said Lloyd Mlotshwa, head of research at IH Securities, a Harare based brokerage. “This signals reverting to a place of safety ahead of the currency announcement.”
Local media reports at the weekend said Mushayavanhu, who assumed office on March 28 instead of as planned, may announce at the end of this week the new currency policy in a monetary policy statement, which has been delayed for almost two months.
The central bank has not given a date on the release of the monetary-policy statement that was originally scheduled for February but had been deferred to give policymakers time to finetune the currency plan.
David Mnangagwa, the country’s deputy finance minister, said last week the statement’s release was imminent, attributing volatility in the exchange rate to “anxiety and anticipation” over the policy’s delay.
Meanwhile, the premium for dollars in the parallel market over official rates has widened 60% to as much Z$36,000, according to which monitors the exchange rates.
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Tishwash: Iraqi economy faces threat as US closes oil revenue account
According to the letter, Iraq maintained this account with the US Federal Reserve Bank, allowing it to receive oil revenues in dollars and utilize them to cover essential expenses in accordance with agreements with the United States.
In a recent development that has raised concerns over the stability of the Iraqi economy, the United States has closed the account through which Iraq collects revenue from its oil sales.
This revelation came to light through a letter addressed to the Finance Committee of the Iraqi Parliament, dated March 18, 2024.
The letter, signed by Ammar Khalaf, Deputy Governor of the Central Bank, outlines the closure of the account known as the Development Fund for Iraq (DFI), which has been operational since 2003.
The DFI, under the supervision and protection of the United Nations and the United States, served as a crucial mechanism for Iraq to collect and manage its oil revenues.
According to the letter, Iraq maintained this account with the US Federal Reserve Bank, allowing it to receive oil revenues in dollars and utilize them to cover essential expenses in accordance with agreements with the United States.
However, with the closure of the DFI account, Iraq's oil revenue is now being directed to a new account, referred to as IRAQ2. This transition raises concerns among experts, including finance and banking specialist Kamaran Qadir Yaqub, who warns that the protection previously afforded to Iraq's revenue may no longer be guaranteed.
Yaqub emphasizes the risk that IRAQ2 could be vulnerable to potential interference or manipulation by the United States, posing a significant threat to Iraq's financial stability.
In addition to the closure of the DFI account, the letter also sheds light on a contractual arrangement between Iraq and a US company for the transportation of dollars from the United States to Iraq. Under this contract, Iraq paid a security deposit of $441,000, with a transportation fee of $216,310 for each convoy of dollars.
The closure of the DFI account and the implications for Iraq's financial security highlight the complex dynamics of international financial relations and the vulnerability of countries reliant on oil revenue. As Iraq navigates these challenges, stakeholders closely monitor developments to assess the impact on the country's economic stability and future prospects link
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Tishwash: The Central Bank is preparing a report to lift the ban on 28 Iraqi banks
Today, Wednesday, the Parliamentary Investment and Development Committee revealed steps by the Central Bank to lift the ban on 28 banks, while indicating that the private sector will participate with the public sector in many strategic projects.
The head of the Parliamentary Investment and Development Committee, Hassan Al-Khafaji, said in a statement followed by “Al-Iqtisad News”: “The committee proposed to the Governor of the Central Bank, Ali Al-Alaq, to support private private banks and involve them in loans,” explaining that “the governor confirmed his support after lifting minor violations against some banks.” .
He pointed out that "the governor of the Central Bank promised to submit a report to the US Treasury to lift the ban on Iraqi banks, which number 28 private banks," expecting "the ban on those banks to be lifted during the coming period."
The Chairman of the Parliamentary Investment and Development Committee affirmed “his committee’s support for the private sector as it is the strategic partner and ally of the public sector, and a country cannot progress and prosper without the private sector,” pointing out that “the private sector will participate with the public sector in many important strategic projects, electrical, industrial, and others link
Mot: .. why are You Late.. didnt YOu Hear the Alarm Clock! -- Yes I Did and ~~~
Mot: . OK - OK - BUT!- How bout Opening the Door just a Little ! K
