Tuesday Morning Iraq Economic News Highlights 9-5-23

Parliament Holds The Central Bank Responsible For Manipulating The Price Of The Dollar

Policy  05/09/2023  the number of readings: 276  Baghdad-Iraq today:  The Parliamentary Finance Committee attributed the continued rise in the dollar exchange rate to the complex procedures included in the electronic window, while indicating the existence of collusion by some central bank employees by passing large sums of money to a group of merchants.

Committee member Mueen Al-Kazemi said in a press interview, “The Parliamentary Finance diagnosed, during its meeting with the bank's governor, the existence of errors in the procedures of the electronic window to buy the dollar, and the matter caused the reluctance of a significant proportion of merchants to register and request foreign currency, which led to a scarcity of supply.”

 In the market and the rise in the exchange rate,” noting that “the procedures adopted by the bank are complex and have caused the reluctance of many merchants and to avoid registering in the electronic dollar purchase window.”

Al-Kazemi added, "Some exchange rate speculators are working to publish unreal prices under the stock exchange title and broadcast them within (WhatsApp) groups and other sites, and this led to price conflicts and created a greater interest than the demand for buying or selling.”

And he explained, “The American sanctions also prevent the issuance of remittances to some merchants wishing to import from neighboring countries such as Iran, Lebanon and Syria, and this measure prompted merchants to use illegal methods in order to transfer their money to facilitate the task” of importing goods and merchandise,” pointing out that “the complicity of some employees in the central bank with a group of merchants, especially in the currency auction, it caused the passage of sums of money that are not parallel to the volume of goods that are imported.

And Al-Kazemi continued, “The Finance Committee has put in place some procedures and agreed with the bank’s governor regarding them, as they are likely to contribute to reducing the price, including granting an amount of 3 thousand dollars to citizens who wish to travel.”

Directly away from the exploitation of tourism companies and offices for their requests and benefits through their passports, with the committee's monitoring of the bank regarding the implementation of all observations that were identified during the hosting of the bank's governor.”

Al-Kazemi stated, "The Iraqi government has entered a battle between its desire to implement a sober banking system, and ending the power of speculators and currency smugglers."    LINK

The exchange rates of the dollar in the Iraqi market today

Economy  09-05-2023 | 5,714 views   Alsumaria News – Economy  Alsumaria News publishes today, Tuesday, the exchange rates of the dollar in the local markets.

And the dollar prices stabilized with the closure of the main Al-Kifah and Al-Harithiya stock exchanges in Baghdad, to record 153,400 Iraqi dinars for 100 dollars.

The selling prices in the exchange shops in the local markets in Baghdad amounted to 154,500 dinars, while the purchase price amounted to 152,500 dinars for every 100 dollars.

And the Central Bank of Iraq decided, earlier, to adjust the exchange rate of the dollar against the Iraqi dinar, as the price of purchasing a dollar from the Ministry of Finance  reached 1,300 dinars per dollar and sold it at (1310) dinars per dollar to banks through the electronic platform, and sold at (1320) dinars per dollar. Dollars from banks and non-bank financial institutions to the final beneficiary.   LINK

Iraq Achieves The Highest Trade Surplus In History.. An Expert Summarizes The Reasons And Clarifies The "Restrictions" - Urgent

Baghdad today - follow-up    Today, Monday (September 4, 2023), economist Nabil Al-Marsoumi announced that Iraq achieved the highest trade surplus in the past year 2022, while he indicated that the trade surplus had increased unrelated to reform.

In his post, Al-Marsawi outlined the reasons for Iraq achieving the highest trade surplus in the past year, pointing out that the surplus is "the difference between merchandise exports and imports."

And he continued, "The surplus achieved for the year 2022, over the course of the history of the oil industry, which is close to a hundred years old, as the surplus amounted to 53.54 billion dollars due to the increase in oil exports in 2022 to about 120 billion dollars, of which 115 billion dollars came from crude oil exports, and 5 billion dollars most of it." of black oil exports.

Al-Marsoumi added, "This means that the increase in the trade surplus in Iraq has nothing to do with reform, development, diversification of the economy, or any self-efforts, but rather is linked to an external variable, which is oil prices, whose annual rate in 2022 reached more than $95 a barrel."

 Trade Surplus

In addition, statistics conducted by the German company  Statista , which specializes in market and consumer data, today, Monday (September 4, 2023), revealed that Iraq achieved the largest trade surplus for the past year 2022 over the past ten years.

The trade balance indicates the differences in imports and exports of goods in the country during the year. If the value of its exports during a period exceeds the value of its imports, it is called a surplus in the trade balance. If the total value of imports exceeds the total value of exports, it is called a deficit in the trade balance.

And the company stated in a table it published today, that Iraq achieved the highest trade surplus for goods in 2022 over the past ten years, as the surplus last year amounted to $53.54 billion, up by 64% from 2021, when the trade surplus for goods in that year reached $20.08 billion.

He pointed out that Iraq achieved a deficit in its trade balance for two years, the first in 2020, when the deficit amounted to 4.11 billion dollars, and the second in 2015, when the trade deficit amounted to 0.94 billion dollars.

And the report continued, while in 2019 the balance achieved a trade surplus of $16.62 billion, in 2018 the trade surplus reached $35.95 billion, and the trade surplus in 2017 reached $15.1 billion, indicating that the trade surplus in 2012 amounted to $35.39 billion.

 Oil Export

And Iraq had achieved during the past year (2022) financial revenues of more than 115 billion dollars from the export of crude oil, to be the highest in years, according to official figures announced by the Iraqi Ministry of Oil.

According to those figures, the daily export rate amounted to 3,320,000 barrels, which is a total of one billion, 211,800,000 barrels for a full year.

 Reflections

And about the repercussions of these financial revenues on the economy and the citizen, and their impact on resolving the economic crises facing the country, whose budget depends more than 95% on oil sales, the financial advisor to the Iraqi government, Mazhar Muhammad Salih, says that these revenues were subject to two restrictions in financial behavior due to the absence of the budget law for the year 2022:

The first is by adhering to Article 13 of the amended Financial Management Law No. 6 of 2019, which requires spending 1/12 of the total actual ongoing or current expenditures in the previous budget estimated at 115 trillion dinars ($70 billion).

The second restriction refers to the allocations contained in the Emergency Law for Food Security and Development No. 2 of 2022, amounting to 25 trillion dinars ($17 billion), which means that the total expenditures for 2022 amount to 140 trillion dinars ($88 billion).

Saleh explains that the remaining financial surplus from the 2022 revenues is 27 trillion dinars ($18.5 billion), and it will be an opening balance in the 2023 budget.

Sovereign Fund

For his part, the economic academic at the University of Baghdad, Ali Dadoush, stresses the need to invest the financial surplus in developing industry and agriculture and supporting the foundations of the real private sector, to operate factories and factories and produce locally manufactured goods and services, in conjunction with the gradual re-imposition of taxes on goods that are produced locally, in line with Activating the role of oversight and preventing the removal of locally produced commodities and keeping them within prices equal to or a margin lower than the prices of competing foreign commodities.

Dadush added, "All of the aforementioned is achieved through the method of balancing programs and performance with the establishment of the sovereign fund," which he considers "the first step towards diversifying the sources of the Iraqi economy."

The academic indicated that this guarantees the solution of several problems rooted in the Iraqi economy, such as unemployment and corruption, in both its financial and administrative aspects, the imbalance of the trade balance and the smuggling of foreign currency abroad.

Source: "Baghdad Today - Agencies"   LINK

The Global Credit Rating Expects Economic Growth In Iraq Due To Oil Revenues

September 5, 2023  Baghdad / Obelisk Al-Hadath: The Ministry of Finance confirmed, on Tuesday, that Iraq had maintained its credit rating.

And the ministry stated in a statement that “in the latest report of Standard & Poor’s Credit Rating Agency (S&P), Iraq maintains its credit rating at B – / B with a stable outlook, with an emphasis on financial and economic stability, according to the report,” indicating that “the new rating came Reflecting the policy of continuous economic and financial reforms pursued by the Ministry of Finance, in addition to maintaining the level of foreign currency reserves that exceed the external public debt and fulfilling other external financial obligations as a result of the stability of crude oil prices.

She added, "The report adopted several indicators in its classification, the most important of which are: the Iraqi parliament's approval of the tripartite budget for the years (2023, 2024, and 2025), which aims to revive infrastructure projects and economic needs," noting that "the formation of the government at the end of 2022 led to a state of political stability." ".

And she continued, “The report confirms that the prediction of a large surplus in the current account, within the economic expectations, will add to the already strong foreign currency reserves, which works to support Iraq’s external capabilities to service debt during the next 12 months.”

And she pointed out that “the agency predicts that economic growth will reach 2.6% annually, during the years 2023-2026, which is linked to an increase in oil production and its repercussions on growth in the non-oil field, in addition to a decrease in annual inflation rates to 4% in July 2023 after it was 5.” -6% during the years 2021 and 2022, which is due to government measures in revaluing the currency, controlling prices, and government support for food and energy prices.

While the agency’s report indicated, according to the statement, “the possibility of improving Iraq’s credit rating in the event of a high rate of economic growth, diversification of the public financial revenues of the oil and non-oil state, an increase in the per capita share of national income, and the continuation of financial and economic policy reform measures.” https://almasalah.com/archives/65442

Stopping The Disbursement Of An “Invalid” Check, Amounting To About 700 Million Dinars, To Establish A School And A Chapel In Baghdad

September 4, 2023  Baghdad / Obelisk Al-Hadath: The Investigation Department of the Integrity Commission announced, on Monday, that it was able to stop the disbursement of a check worth more than (650) million dinars, in addition to seizing tampering with the contract for the construction of a government property in Baghdad.

The department said in a statement, “A team from the Baghdad Investigation Directorate moved to the Directorate of Execution of the Justice of the Session; For the purpose of investigating the issue of suspicions of corruption in the disbursement of a check in the amount of (653,910,612) dinars,”

 pointing out that “the investigation and audit work revealed suspicions of corruption in the disbursement of the amount owed by the Oil Products Distribution Company to a company according to a judicial decision of the Court of First Instance in the Presidency of the Karkh Appeal.”

She added, “The deed was disbursed without authorization from the beneficiary company; based on a letter submitted by the company,” noting that “his history and the margin of the justice outlet have been tampered with, in addition to the existence of an old power of attorney that has not been renewed, and that the company’s papers and minutes date back to the year 2020.”

And she stated that “the authority’s procedures were able to stop the disbursement of the aforementioned amount, through coordination with the Rasheed Bank – General Administration.”

And she continued, “The team, which moved to the Engineering Department of the Shiite Endowment Diwan, detected violations in the contract concluded between the Diwan and a limited public contracting company; For the purpose of establishing a school and a chapel,”

explaining that “after conducting the on-site inspection by the Court of First Instance specialized in commercial cases in Rusafa, accompanied by three experts, it was found that the property subject of the examination has nothing to do with the school and the chapel, but rather it is a residence built on agricultural land that has been occupied by one of the families.

She explained, “The judge of the Rusafa Investigation Court, which is specialized in cases of integrity, decided to approach the Shiite Endowment Office; To inquire about the disbursed amounts, and to seize copies of the initial and deed of the property.    https://almasalah.com/archives/65346