Tuesday Morning Iraq Economic News Highlights 6-26-23

A Financial Expert Warns Against Printing Currency To Cover Budget Expenses And Offers Proposed Solutions

Financial expert Mustafa Hantoush warned of an insane rise in the exchange rates of the dollar against the dinar in the event that the government resorted to printing the currency in order to cover expenses in the budget.  Hantoush said in a press interview seen by “Takadam” that “the government is on the verge of implementing a huge budget, which puts it in an embarrassing position,” noting that “Iraq in previous years was facing difficulty in securing 8 trillion dinars per month, so what will it do when it needs more than 16 trillion dinars per month if you start implementing the budget?

He added, "The government faces a big challenge in order to withdraw the cash block available to citizens through high-interest bonds in order to avoid printing more cash block from the local currency," noting that "the presence of the cash block outside the banking system will open the way for speculation."

He pointed out that "printing more local currency to cover expenses in the budget will eventually lead to an insane rise in the exchange rates of the dollar against the dinar."

The country's general budget law entered into force after it was published in the Official Gazette, and ministries are now awaiting instructions for implementing the budget before embarking on its implementation.

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After Publishing The Budget With Facts.. "Massacre" In The Numbers Of Kurdistan Employees

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policy  |Today, Baghdad today – Baghdad  A government source revealed a significant shortage in the number of employees in the Kurdistan region, as stated in the financial budget law, after it was published in the Official Gazette, on Monday, and entered into force.

The source stated to (Baghdad Today), “The Iraqi Al-Waqa’i newspaper published the general budget for the three years, but it revealed a (massacre) against the employees of Kurdistan, where it was stated that the number of the region’s employees is 658 thousand and 189 employees, but the number of Kurdistan employees accredited to the regional government a year ago 2013 until today is 681 thousand and 979 employees.

He explained that "by the difference between the two numbers, the salaries of 23 thousand and 790 employees have been reduced from the Kurdistan employees group, which constitutes 3.5 percent of the region's employees group."

The source noted that, "It is remarkable in the matter that no official comment was issued by the Kurdistan government or the concerned authorities, and no one knows the reasons for the shortage or reduction of all these numbers of employees."

It is noteworthy that the House of Representatives voted at dawn on the 12th of this June, on the Federal General Budget Law of the Republic of Iraq for the years (2025, 2024, 2023) in total, while the President of the Republic approved the budget on the 21st of the month.  LINK

The Decline In The Price Of The Dollar Against The Dinar In Baghdad And Erbil

2023-06-27 02:49   Shafaq News/ The exchange rates of the US dollar against the Iraqi dinar decreased today, Tuesday, in the main stock exchange in the capital, Baghdad, and in Erbil, the capital of Kurdistan Region.

Shafaq News agency reporter said that the central Al-Kifah and Al-Harithiya stock exchanges in Baghdad recorded this morning, an exchange rate of 147,300 Iraqi dinars against 100 US dollars, while yesterday morning, Monday, prices recorded 147,800 dinars.

As for the dollar prices in exchange shops in the local markets in Baghdad, they decreased, as the selling price reached 148,500 dinars, while the purchase price reached 146,500 dinars for every 100 dollars.

As for Erbil, the capital of the Kurdistan Region, the price of the dollar also decreased, as the selling price reached 147,350 dinars, and the purchase price was 147,250 dinars for 100 dollars.   LINK

The "Sacrificial Market"... Customers Are Less This Year, And The Rich Buy In Dollars

Baghdad today – Diyala   The sacrificial market in Diyala governorate witnessed a major recession due to the decline in demand for it in the past days, amid calls to re-import livestock and sheep to bridge the gap in the price calendar .

Alaa al-Khazraji, a livestock and sheep trader, told (Baghdad Today) that "the sacrificial animal market suffers from a real recession, especially since the turnout rate is low by up to 40% for various reasons, the most prominent of which is the direct rise in prices and the weak purchasing power of large classes of society."

He added, "We consider the sacrificial market as a criterion for the general economic situation in any governorate, including Diyala, as whenever it is weak, this is an indication of growing poverty."

As for Mazban Khairallah, a livestock and sheep trader, he indicated that "Diyala governorate is one of the governorates that is characterized by abundant production of livestock and sheep, but it suffers from high prices because the bulk of its production goes to other governorates with the sacrificial season."

He added, "The turnout is very limited compared to previous seasons," pointing out that "the cost of raising livestock and sheep has become very high in the absence of government support."

He pointed out that "the rich and well-off in the province are not stopped by the high prices, as some of them buy sacrifices in dollars because of their wealth, as he put it."

As for Abdullah Ali, a retired man, he said, "He has been searching for days for a sacrifice for his martyred son, but he did not succeed because of the high prices," stressing that "there are those who take advantage of the season to raise it."

He added, "Unfortunately, there is cheating by some by selling sick sheep, wondering where the veterinary role is to limit it and take measures to prevent it."

As for Abd al-Karim Hassan, an employee, he decided to postpone the sacrifice with the exacerbation of the hemorrhagic fever crisis after 7 confirmed injuries were recorded in Diyala, noting that "the hemorrhagic fever was behind the postponement of many people to buy the sacrifice for this season."

While Alwan Bilal, the owner of a food store in Baquba, indicated that “preventing the entry of large numbers of cattle and sheep from the Kurdistan region to Diyala under the pretext that they are “smuggled” is what pushed prices to rise and prevented many from buying the sacrifice, adding that “Kurdistan is part of Iraq.” How can imported cattle and sheep enter it and are prevented in Diyala? LINK

“Biden’s Sanctions Continue.” America Determines The Mechanisms For Paying The Iraqi Debt To Iran

International  2023-06-27 | 1,785 views  Alsumaria News – International , US State Department spokesman Matthew Miller confirmed that paying Iraq's debts to Iran does not mean a change in the policy of imposing sanctions, specifying the mechanisms for accessing these funds.

In his response to the announcement of the payment of all Iraq's debts to Iran from gas dues, the US State Department spokesman said, "This does not mean a change in Washington's policy towards Iran or Iraq," stressing that "the Biden administration continues to implement all US sanctions on Iran.

He added: Since 2018, the  State Department  has made a number of concessions in consultation with Congress that allow Iraq to pay for electricity imports from Iran, by transferring funds to a restricted account in Iraq.

He stressed that in line with US sanctions, this money can only be accessed for humanitarian and other non-sanctioned transactions and the money only goes to "approved third parties" and is not transferred toIrandirectly.

Miller confirmed that United States Continues to approve transactions for the use of funds on a case-by-case basis.

On Sunday, the Iranian deputy oil minister for gas affairs said that the Iraqi  Ministry of Electricity  had paid Iran all gas-related debts.

In his statements, the Iranian official did not mention the amount of frozen funds in Iraqi banks.

For his part, Ahmed Musa, a spokesman for  Iraqi Ministry of Electricity  On Monday, his country paid the dues for Iranian gas to Tehran and deposited it in Iran  Iraqi Trade Bank.

He said, “The Ministry of Electricity has paid all the dues it owedIraqTo Iran, which is dues for importing gas from it.”

He added, “The dues were paid to  Iraqi Trade Bank In the credit fund, but the bank finds it difficult to transfer it to the Iranian government because of the US sanctions.  LINK

Iraq And Saudi Arabia Lose Their Share Of Oil In The Asian Market

Energy  Iraq and Saudi Arabia are starting to lose oil market share in Asia, with Asian giants India and China opting for cheaper Russian crude, S&P Global Commodity Insights reports.

According to S&P Global, preliminary data indicates that Indian refiners' imports of Russian crude in May reached an all-time high of about 2 million bpd, surpassing combined purchases by Iraq and Saudi Arabia and displacing supplies from the Middle East, Africa and some US supplies.

These imports are expected to account for 40%-45%, or 2 million-2.5 million barrels per day, of India's basket of crude oil imports, S&P Global said, assuming that prices remain competitive compared to alternative sources.

Meanwhile, China's imports of crude oil from Russia hit a new record of 2.30 million barrels per day (9.71 million metric tons) in May, more than Saudi imports of 1.73 million barrels per day.

China's crude oil imports from Russia are also likely to grow for the foreseeable future as Russia increased supplies of the Espoo blend medium sweet crude to 39 Aframex-sized cargoes in May, with China accounting for 29 cargoes and India 10, according to Kpler and Platts cFlow ship and shipping data. Commodity tracking software.

OPEC Secretary-General Haitham Al-Ghais said in this regard that the alliance has no concerns, indicating that "the market is open to all players. Russia is a prominent player and a major player in the global oil markets, Malaysia and Asia are the main importers of oil and the market is open to all, and there is growth in demand that accommodates all of us." ".

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Chinese Companies Acquire The Largest Share Of Iraq's Oil Within A Month

Energy   Economy News _ Baghdad  The Iraqi Oil Marketing Company "SOMO" announced today, Tuesday, that Chinese oil companies were the most purchasers of Iraqi oil during the month of May.

"Sumo" stated in a statistic published on its official website and seen by "Al-Iqtisad News", that "Chinese companies were the most numerous among other international companies in purchasing Iraqi oil, with 9 companies out of 39 companies that purchased oil during the month of May."

She added that "Indian companies came second with 7 companies, then South Korean and American companies came third with 4 companies each, and Italian and Greek companies came fourth with two companies each, while the rest were distributed among Spanish, (Dutch-British) and Turkish companies." Russian, Egyptian, Emirati, Kuwaiti, Jordanian, French, Indonesian, Japanese, and one company for each.

Somo indicated that it "depends on the sale of Iraqi oil on the main criteria for contracting with large, medium, independent and vertically integrated governmental international oil companies," noting that "the most prominent international companies that bought Iraqi oil are (Indian Hindustan, Korean Cocas, American Exxon Mobil, and Dutch-British Shell). Italian Wayne).

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