Iraq Economic News and Points to Ponder Friday Afternoon 12-29-23
Tlm724 Administrator Bondlady’s Corner
Identify Two Phenomena Behind Exchange Rate Depreciation
12/29/2023 Mawazine News – Baghdad, member of the State of Law coalition, Saad Al-Muttalabi, on Thursday, identified two phenomena behind the decline in the exchange rate of the dollar against the Iraqi dinar, while confirming that the decline will continue until next week.
Al-Muttalabi said in a statement to Mawazine News, “The decline in the exchange rate of the US dollar against the Iraqi dinar is behind two phenomena. The first is the Central Bank’s measures to facilitate the trade exchange process by entering the platform for financial transfers, which led to a decrease in demand for the dollar from the parallel market.”
He added, “The second phenomenon is the arrival of large shipments of dollars to the Iraqi treasury from Iraqi funds located in the US Federal Bank, which contributed to saving the dollar significantly.”
Al-Muttalabi expected, “The dollar will continue to decline against the dinar until next week, but it will take a while for it to reach the official price.” https://www.mawazin.net/Details.aspx?jimare=239677
After Al-Sudani’s Statements.. Is Iraq Able To Abandon The International Coalition?
Posted On12-29-2023 By Sotaliraq The announcement by the Iraqi Prime Minister, Muhammad Shiaa al-Sudani, on Thursday, that the Iraqi government is “proceeding” towards ending the presence of the international coalition in Iraq does not deviate from a political framework, according to experts and observers who spoke to the “Al-Hurra” website.
It reveals a situation that prevents a security or military stance from being taken regarding the escalating attacks and responses between the United States of America and the Iranian-backed militias, and others linked to the “agenda with a pro-Tehran orientation.”
Al-Sudani spoke during his meeting with the Spanish Prime Minister, Pedro Sanchez.
It was followed by air strikes carried out by the US Department of Defense, the Pentagon, on 3 sites belonging to the Iraqi Hezbollah Brigades, in response to a bomb attack carried out by the militia on the Erbil Air Base, which resulted in the injury of 3 American soldiers.
He added, “The government is in the process of rearranging the relationship in light of capable Iraqi forces,” stressing that it is “moving toward ending the presence of the coalition forces, which includes security advisors who support the security forces in the areas of training, advice, and intelligence cooperation.”
Al-Sudani spoke of “recent attacks on Iraqi military bases and diplomatic missions,” and that the government’s official position considers them “hostile acts that harm the national interest and affect the security and stability of the country.”
He also stressed “the importance of adhering to the legal mandate granted by previous Iraqi governments for this presence, which must be within the framework of support for the security forces in the areas of training, and must not exceed the limit of carrying out military actions as they represent a violation of Iraqi sovereignty, which is unacceptable,” as he put it.
Why Now?
What Al-Sudani said is not considered new in terms of the presence of international coalition forces in Iraq, as he had previously referred to a part related to “the end of ISIS” last September, which prompted a response from the United States of America.
Three months ago, Washington confirmed that the presence of American forces in Iraq “is something agreed upon with Baghdad,” days after Sudanese made statements that ISIS “no longer poses a threat,” and that his country no longer needs the international coalition.
US State Department spokesman Matthew Miller said at the time: “Last August, we issued a joint statement with our Iraqi partners in which we stressed that we are there at their invitation, and therefore we intend to consult on a future process that includes the coalition to determine how the coalition’s military mission will develop.”
He added: “The Iraqi security forces are assuming command of ISIS’s tasks inside Iraq and have demonstrated an increasing ability to confront this threat.”
The Iraqi political researcher, Haitham Al-Hiti, considers that Al-Sudani’s talk about moving to end the presence of the international coalition in Iraq “is realistic and is the truest political statement by an official since 2003.”
He told the “Al-Hurra” website that “the political agenda of the ruling elite is in a pro-Iranian direction and not the United States of America,” which is what we currently see reflected in reality.
Loyalty to Iran is linked to several trends, the first of which is “making Iraq a permanent economic outlet for Iran, or a respiratory lung so that it is in possession,” according to Al-Hiti.
The researcher adds, “Iran is part of the Russian-Chinese global path that works to compete with American hegemony, and therefore it is trying to uproot Iraq from the latter.”
Mujahid Al-Sumaidaie, a researcher at the European Center for Counter-Terrorism and Intelligence Studies, believes that “the Iraqi government is in a difficult situation in terms of its ability to stop the bombing coming from the militias and the response from the United States.”
He told Al-Hurra website that Al-Sudani’s statements were “political” and indicated “his government’s inability to take a strong security and military stance to stop these two interventions,” referring to the bombing and the corresponding response.
Is Iraq able to give up?
After the rise of ISIS in 2014, and its control over about a third of Iraqi territory, Washington established an international coalition to support Iraqi forces and Kurdish forces in Syria.
Despite its defeat in 2017 in Iraq, the organization still claims attacks in the country from time to time, and the coalition is still active in Iraq to prevent its rise again, even though the latter announced in 2021 “the end of combat missions.”
The international coalition currently includes about 2,500 American soldiers and about 1,000 from its member states, and they are deployed in military bases under the command of Iraqi forces.
Researcher Al-Sumaidaie believes that the Iraqi government “needs a plan if it wants to expel the coalition led by American forces, and it may be for five or three years or less.”
For years, the coalition has been conducting “logistical operations, training, and bombing on ISIS sites, based on information coming from Iraq or from the intelligence services,” according to Al-Sumaidaie.
He added: “If Iraq wants to end its presence, it must prepare to fill the void, that is, deploy forces capable of providing logistical support, confronting terrorism, and bombing sites.”
He must “be able to collect information and intelligence efforts in the battle against the organization,” according to the researcher, who adds: “Otherwise, the result will be tragic, as happened in 2011 when American forces left, and terrorism spread until the country collapsed in 2013.”
What about support?
The Iraqi forces rely heavily on Iranian support, Iranian-backed militias, and the coalition, according to Rich Otzen, a senior expert at the Atlantic Council and a former American officer.
In an interview with Al-Hurra website, he believes that “the government’s demand that the coalition leave would deepen dependence on Iran and its agents.”
“Iraq may be able to contain the remnants of ISIS on this basis, but not to the same degree, and not without ceding more control to Tehran,” Otzen adds.
The American expert points out, on the other hand, that the Iraqi government relies on banking and financial support from Western to a high degree.
He continues, “If coalition forces are invited to leave, it is unclear whether other forms of support will be maintained at the same levels.”
The Haitian researcher, for his part, also refers to the same idea, and says, “The American side controls Iraqi financing. Meaning the amounts that come from American banks in exchange for oil prices.”
This part constitutes “the only obstacle that prevents Iraq from escaping the path imposed by the United States of America,” according to Al-Hiti.
However, the researcher believes that “in the long and not very distant term, there may be potential Iraqi, Chinese, Russian, and Iranian solutions to get Iraq off the path it is on.”
Baghdad may seek to end the coalition’s presence on the ground while maintaining external support (air support, logistics, etc.) stationed in neighboring countries, according to the former American officer, Autzen.
He asserts that “it is not clear that the United States will or should agree to this,” and that Al-Sudani’s statement may be “a way for Baghdad to put pressure on Erbil, as the Kurdistan Regional Government benefits more than anything else from the presence of the coalition.” LINK
Learn About The Most Important Economic Events In Iraq For The Year 2023
Friday 29, December 2023 12:55 | Economical Number of readings: 787 Baghdad / NINA / The year 2023 witnessed economic events in Iraq that greatly affected the markets, especially the rise in the price of the dollar and other fluctuations, in addition to oil, whose revenues constitute 95% of the country’s budget.
Among the most important events:
On January 23, Prime Minister Muhammad Shiaa Al-Sudani relieved the Governor of the Central Bank, Mustafa Ghaleb Makhif, and assigned Ali Mohsen Al-Alaq to manage it.
On February 11, the Central Bank agreed with the American bank “JPMorgan” to facilitate payments through the Iraqi banking system to China with the aim of directly financing private sector imports.
On May 30, the bank announced the purchase of new quantities of gold amounting to 2.3 tons, bringing its total possession to 132.74 tons, maintaining its 30th place in the world.
On July 29, the US Treasury Department imposed sanctions on 14 Iraqi banks as part of a comprehensive campaign against the transfer of US currency from Iraq to Iran and other sanctioned countries after revealing information that the 14 banks were involved in money laundering and fraudulent transactions.
October 5, the Central Bank confirmed that the country will ban cash withdrawals and transactions in US dollars starting from January 1, 2024, in order to limit the use of the country’s hard currency reserves in financial crimes and evade US sanctions.
In October, the Central Bank of Iraq warned against dealing with unlicensed entities that issue electronic payment cards in order to avoid cases of fraud and financial fraud. On December 12, the Central Bank of Iraq directed private banks to finance small merchants’ imports from Turkey in the euro or Turkish lira. This is according to an official letter issued by him and appended with the signature of Ammar Hamad Khalaf, deputy governor of the bank.
On December 13, the Central Bank agreed with First Abu Dhabi Bank to finance trade and imports in the dirham currency.
On December 14, he agreed with an American delegation to meet the bank’s needs for cash and dollar shipments for the coming year.
Oil Sector:
On March 26, 2023, Baghdad stopped exports of crude oil from the Kurdistan Region and Kirkuk fields after it won an arbitration case against Turkey.
On April 1, the Karbala oil refinery was opened with a production capacity of 140 thousand barrels per day.
On June 18, Oil Minister Hayan Abdul-Ghani announced the launch of the sixth licensing round for 11 gas exploration blocks in Najaf, Anbar, and Nineveh governorates.
On July 10, 2023, Iraq signed a deferred agreement with the French company Total Energy with investments amounting to $27 billion through the implementation of four oil and gas projects for renewable energy.
On July 21, a memorandum of understanding was signed to supply Lebanon with fuel, oil and gas to meet its needs for oil, fuel and crude oil. On September 28, the Ministry of Oil announced
the production of high-quality octane 95 gasoline at the Karbala refinery for the first time in Iraq.
On September 29, Maysan Oil Company and a coalition of international companies celebrated the inauguration of the gas investment and processing project in the Halfaya field in Nissan Governorate, with a capacity of 300 mqmq per day (one million standard cubic feet).
On October 6, the Minister of Oil signed a memorandum of understanding to supply gas from Turkmenistan to Iraq, and on October 29, the Minister announced the operation of the Baiji refinery with a capacity of 150 thousand barrels per day.
Finance
In February 2023, the price of the US dollar against the Iraqi dinar rose on the Baghdad Stock Exchange to 170 thousand Iraqi dinars against 100 US dollars.
March 12, 2023, the Ministry of Finance announces the completion of the preparation of the draft federal budget law for the year 2023 and sending it to the Council of Ministers for the purpose of discussing it for a vote.
On June 6, the House of Representatives voted on the draft law on the tripartite federal general budget for the fiscal years 2023, 2024, and 2025. The budget included 66 articles, and is considered the largest in the country’s history, as its value amounted to approximately 153 billion dollars for each of the three years.
Agriculture
On August 22, 2023, the Ministry of Agriculture announced that water scarcity deprived the governorates of Najaf, Diwaniyah, and Muthanna from growing ambergris rice due to the lack of sufficient water. On September 5, the Kurdistan Region announced the export of one thousand tons of potatoes to the United Arab Emirates.
On October 1, the Ministries of Water Resources and Agriculture agreed to cultivate 5.5 million dunums for the upcoming winter season 2023-2024.
On November 30, the Kurdistan Region announced the export of honey to Qatar for the first time.
In the field of trade, in August 2023, the Ministry of Commerce began distributing electronic ration cards to citizens to receive food basket items and flour.
In April, the Ministry of Commerce announced that it would replace flour in the ration with bread or “samoon” from bakeries and ovens, and it would be optional for citizens, not compulsory. Areas in Baghdad would be chosen to conduct an initial experiment in, namely Al-Daoudi, Al-Mansour, and Al-Harithiya.
On December 28, the Iraq Stock Exchange announced the trading of a stock with a financial value of about 700 billion dinars during the year 2023. Electricity : In April 2023, the Ministry of Electricity announced the completion of the electrical connection with Turkey by 100% and promised that consumption wages would be at reasonable prices.
On June 11, Iraq announced the start of work on an electrical interconnection network with the Gulf Cooperation Council countries with a capacity of 500 megawatts, and it is expected that the interconnection system will be completed in late 2024. In June, Iraq paid $2.76 billion in Iranian gas dues after obtaining American exemptions from… Sanctions imposed on Tehran.
On September 30, the Electricity Corporation announced the complete completion of the electrical connection with Jordan, and the project aims to provide Iraq with a capacity of 150 megawatts in the first phase./End5 https://ninanews.com/Website/News/Details?key=1098120
To read more current and reliable Iraqi news please visit BondLady’s Corner:
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Provoking Points To Ponder on Carelessness:
Carelessness does more harm than a want of knowledge. – Benjamin Franklin
The wife of a careless man is almost a widow. – Hungarian proverb
For want of a nail the shoe was lost; for want of a shoe the horse was lost; and for want of a horse the rider was lost; being overtaken and slain by the enemy, all for want of care about a horseshoe nail. – Benjamin Franklin
Famous Quotes and Authors, Famous Quotations for all Occasions
