Bondlady’s Corner – Iraq Economic News and Points to Ponder Wednesday Afternoon 3-27-24


Iraq Economic News and Points to Ponder Wednesday Afternoon 3-27-24

Tlm724 Administrator Bondlady’s Corner

Welcoming Iraq’s Accession To Membership In The European Bank

 Economical 03/26/2024   Baghdad: Hussein Thaghab   Economic and financial experts in the public and private sectors unanimously agreed on the importance of Iraq’s accession to membership in the European Bank for Reconstruction and Development, and that in all cases it represents an important step that enhances its position within the global labor market.

 This accession comes at a time when the government and the Central Bank of Iraq are working to develop the Iraqi financial sector. And moving it to a better stage, commensurate with its economic weight on the global scene.

 Executive Director of the Association of Iraqi Private Banks, Ali Tariq, told “Al-Sabah”:

Iraq needs such important steps that strengthen its financial position,  at a time when efforts continue in full swing to develop the performance of the national financial sector, and that  such partnerships will have a positive impact on National financial sector. 

He stressed that the European Bank for Reconstruction and Development is an important financial institution, and that  joining in itself is a positive step that complements the development effort that the country seeks, as everyone realizes that Iraq is an important field of work and a destination for many major international companies,

 which requires us to work to keep pace with global developments in the financial sector.  He pointed out that the  efforts of the government and the Central Bank to develop the local financial sector are continuing and at their strongest, and such steps reinforce these trends, as they bring closer distances with important financial institutions.

The Prime Minister’s Advisor for Financial Affairs, Dr. Mazhar Muhammad Salih explained the benefits of Iraq joining the European Bank for Reconstruction and Development.   Saleh said to the Iraqi News Agency (INA):

“There is a positive syndrome between building the development strategy that is embodied today by the government’s philosophy of launching a development initiative with comprehensive sectoral economic ties, which is called the (Development Road) project,

 which is the corridor and the strategic project that connects the countries of the European Union.” In Asia through Iraq and the Gulf sea lanes and vice versa on the one hand, and

 the requirements for implementing the various stages of the development path through the role that Iraq’s membership in the European Bank for Reconstruction and Development occupies on the other hand, especially in the     preferences for obtaining European technology and     ensuring the role of European Union countries’ companies in implementing the path.

Development in all its aspects, whether in     infrastructure,      industrial production projects, and     various logistical services.”

Financial and economic expert Dr. Salwan Al-Nouri described Iraq’s membership in the European Bank for Reconstruction and Development as important and strategic and puts Iraq on safe paths. ‘

He said:  Iraq cannot achieve sustainable economic development without the presence of important global partnerships that accelerate the implementation of development plans, by providing supplies that effort cannot provide. Locally, at the same speed as our local effort, which is represented by advanced technology and capital.

Al-Nouri pointed out that the global effort can shorten the time and effort in the development process that Iraq seeks, as  it has abundant capital and advanced equipment that can be used to serve the national economy, and this is not impossible, pointing out that  such important partnerships with institutions have weight. On the global economic arena will enhance national development capabilities.

 Economist Ahmed Maklaf said:  Iraq’s accession to membership in the European Bank for Reconstruction and Development is a success in itself, as it contributes to changing the global outlook on the Iraqi business arena and moving it to a new stage,

 especially since many international banks are still afraid of being present in the Iraqi market even though they are… Realizes the importance of Iraq on the global economic scene.

 An official pointed out that the concerned authorities in Iraq must work towards building bridges of cooperation with the largest international financial institutions and be present inside Iraq with a weight commensurate with Iraq’s economic size,

 especially since Iraq represents the focus of important work in the region and the world, and that bilateral partnerships with Iraq are of great benefit to all. the parties.    

Preserving Foreign Reserves.. An Iraqi Academic Study Answers The Question “The Stability Of The Iraqi Dinar Against The Dollar”

 Economy     Dollar prices     breaking     Central Bank of Iraq     Iraqi dinar   2024-03-25 12:46  Shafaq News/ At a time when the price of the dollar is still fluctuating between high and low, forcing the market to live in a state of some kind of confusion, because the hard currency constitutes an important tool in Iraqi trade, as it is a trade that depends on imports for most of the products in the local market,

On Monday, a researcher whose master’s thesis was discussed at the College of Administration and Economics at Tikrit University put forward some possible solutions for controlling the price of the dollar, as his thesis came about the role of the central bank and the currency selling window, their role in stabilizing the dinar against the dollar, and the importance of maintaining foreign currency reserves..

 Researcher Ahmed Abdullah Akil told Shafaq News Agency, “The study aims to know and measure the extent of the impact of some of the central bank’s tools in achieving stability in the exchange rate of the Iraqi dinar against the US dollar during the period (2004 – 2022) in order to know the places of imbalance and negatives that hinder achieving Stability of the value of the local currency according to what is appropriate to the nature of the Iraqi economy, as

 the goal of maintaining the value of the local currency was the primary goal of the bank, with the aim of maintaining the price level, which is essentially linked to the exchange rate of the local dinar against the US dollar.

He added,  “The study variables were analyzed and measured according to the (Eviews 13) program, and it was found that there is a positive and significant relationship between some of the central bank’s tools as independent variables and the official and parallel exchange rates as dependent variables in the short term, with some negative and positive correlations to some variables in the long term, as

 It was noted that some tools were ineffective in influencing the currency exchange rate, such as the legal reserve, the rediscount rate, and open market operations, but the effect of some of them was limited to inflation.

 He pointed out that “while the effect of the interest rate and the window was positive on the value of the local currency as a result of its reduction in the nominal exchange rate, 

this indicates the ability of the central bank to influence the stability of the exchange rate of the local currency against the foreign currency, especially through the currency selling window throughout the study period,

 except for some In the last years of the study period, the nominal exchange rate rose again, and so did the parallel market, by decision of the monetary authority represented by the Central Bank, for the purpose of confronting public expenditures and confronting the repercussions of the global health crisis related to the Corona epidemic and the accompanying decline in oil prices, which is the main source of the dollar. America because of the rentier nature of the Iraqi economy.”

He continued:  “It was also noted that the gap between the official exchange rate and its counterpart in the parallel market increased due to the increased demand for foreign currency, and the study presented a number of recommendations, the most important of which is   continuing the operation of the window without excessive use of foreign reserves and    diversifying the sources of obtaining foreign currency by pushing the wheel of development and activating the real sector.” Industry and agriculture, in order to achieve a reduction in imports, which reduces the depletion of the currency,

in addition to  tightening control measures to prevent the smuggling of foreign currency and actions that affect the supply of it, which contributes to the stability of the local currency exchange rate.”

He stressed that  “continuing to operate the currency selling window without compromising on foreign reserves, and diversifying the sources of obtaining foreign currency so that the exchange rate does not remain hostage to oil prices as it is almost the only source of obtaining foreign currency.”

 He stated that  “advancing the wheel of development in Iraq, activating the real sector, revitalizing industry and agriculture to reduce imports,  relieving pressure on foreign dollar reserves, distancing the Central Bank from political pressures,  granting it the necessary powers to deal with  fluctuations in the economic situation, including  exchange rate fluctuations, and  tightening supervisory measures to prevent foreign currency smuggling.” Abroad so as not to affect the supply of foreign currency, and thus the value of the local currency.”اقتصـاد/الحفاظ-على-الاحتياطي-ال-جنبي-دراسة-كاديمية-عراقية-تجيب-على-س-ال-استقرار-الدينار-العراقي-مام-الدولار

The Tanker “Sumer” And The Financial Returns

 Economical 03/26/2024   Walid Khaled Al-Zaidi   The transportation sector is  among the most important elements of the economy and  a fundamental foundation in the development structure of any country that seeks progress and achieving the goals that its people aspire to, especially  when it ossesses     wealth,  means of production, and   manufactured materials to deliver them to distant markets through various means of transportation, including the sea, which is characterized by the ability to transport large quantities of goods. To long distances,

in addition to its low financial costs and its provision of safety in transportation between different ports, despite the long sea distances it travels compared to other means, Iraq is one of the economic centers that need sea transportation to deliver its petroleum crude products to global markets in the East and West and various countries..

The National Fleet for Transporting Iraqi Oil dates back to the year (1972) when the number of its tankers reached (22) tankers,

all of which were destroyed during the senseless wars that harmed Iraq, including the war in (1991) with the international coalition forces to expel the Iraqi army from Kuwait.

However, the Ministry of Oil is seeking Currently, through the Iraqi Transport Company, we are trying to restore the prestige of the fleet and revive its luster once again by contracting with the Norwegian company (Patsurfs Mandal) to build two giant tankers, the first called (Sumer), which has already arrived at the port of Khor Al-Zubair on the Gulf, and the other called (Akd) has not yet arrived, according to a contract. It was signed by the Ministry earlier.

The process of docking the Sumer oil tanker on the banks of the homeland, and the tanker was later confirmed, is a pioneering step taken by the Ministry of Oil with the aim of returning Iraq to the markets of Europe, Far East Asia and South America to transport hundreds of thousands of barrels of crude oil and a qualitative leap towards rehabilitating the fleet of oil tankers,

especially since the Iraqi Transport Company You did not think about contracting to buy these two tankers, but rather contracting with the Norwegian company to build and manufacture them according to purely national designs.

This is on the one hand, and this contract was also concluded with the Norwegian company that is most famous for manufacturing giant tankers in the world on the other hand.

These two things clearly indicate the sound vision of those in charge.

The ministry, which is keeping pace with the objectives of the government program to expand the area of ​​benefiting from the elements of the national economy, should know that the national carrier of Iraqi oil crudes will save approximately one million dollars per month that was spent on leasing oil tankers from outside the country.

When the Ministry of Oil plans to own means of transporting its exports,   it is achieving a promising start towards a comprehensive economic outlook to reduce the costs of selling Iraqi oil,  avoiding its complications, and     getting rid of the conditions and dictates of the owners of international transport companies that charge the country huge amounts of money and reduce the volume of Iraq’s imports from its oil sales over the past decades. billions of dollars,

and that delivering the loads of the produced crude to the farthest seas and oceans is an additional step to diversify the sources of supplying the state treasury with huge sums that can be invested in other projects in effective development areas, in addition to  strengthening the Ministry’s fleet with modern tankers and  giving priority to the national carrier and a serious contribution to revitalizing the vital oil sector and upgrading it. The level of performance of the Iraqi transport company to compete with similar giant international companies.    

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