Iraq Economic News and Points to Ponder Late Thursday Evening 5-16-24


Iraq Economic News and Points to Ponder Late Thursday Evening 5-16-24

The Monetary Fund: “Internal Stability Has Improved Since The New Government Took Office In October 2022.”

Reports   Washington, DC – On May 13, 2024, the Executive Board of the International Monetary Fund (IMF) concluded Article IV consultations with Iraq and considered and approved the staff assessment.

Internal stability has improved since the new government took office in October 2022, facilitating the passage of Iraq’s first three-year budget, which entailed a major fiscal expansion starting in 2023, supporting a strong recovery in Iraq’s non-oil economy after a contraction in 2023. 2022.

Iraq has been largely unaffected by the conflict in the region, and domestic inflation fell to 4% by the end of 2023, reflecting lower international food prices, a revaluation of the currency from February 2023, and a return to normalization of trade finance.

Continued fiscal expansion is expected to boost growth in 2024.

*Executive Council evaluation*:  Executive Directors agreed with the thrust of the staff assessment, and welcomed the strong economic recovery, low inflation, and improving domestic conditions that led to the implementation of the first-ever three-year budget.

Directors agreed that the immediate implementation of Customs and Revenue Administration reforms, full implementation of the Single Treasury Account, and strict oversight and limitation of the use of extra-budgetary funds and government guarantees are essential to support fiscal consolidation.

Directors praised the central bank’s efforts to tighten monetary policy and strengthen the liquidity management framework.

Improving coordination between fiscal and monetary operations would help absorb excess liquidity and enhance monetary policy transmission.

The directors agreed that accelerating the restructuring process of large state-owned banks was essential. They support the modernization of the private banking sector, by facilitating the establishment of correspondent banking relationships, reducing regulatory uncertainties, and enhancing the efficiency and competitiveness of private banks.

Directors agreed that improving governance and combating corruption were also key, and encouraged further strengthening of the AML/CFT framework, strengthening public procurement and business systems, and addressing deficiencies in the electricity sector.

Directors welcomed renewed efforts towards accession to the World Trade Organization and encouraged the authorities to improve the coverage and timeliness of statistics.

Directors welcomed the authorities’ request to establish a policy coordination instrument.

The next Article IV consultations with Iraq are expected to be held in the standard 12-month cycle.

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Iraq Repays IMF Loans In Full

Economy |  05/16/2024   Mawazine News – Baghdad   The Advisor to the Prime Minister for Financial Affairs, Mazhar Muhammad Salih, announced today, Thursday, the repayment of International Monetary Fund loans to Iraq since 2003, and while he indicated that their total did not exceed 8 billion dollars, he confirmed that they had been repaid in full.

Saleh said, according to the official agency, “Since 2003, the International Monetary Fund has provided several loans to Iraq that were aimed at supporting macroeconomic stability and implementing financial reforms. Between the years 2003 and 2021, Iraq obtained several financing programs from the International Monetary Fund, including loans.” Emergency and relatively long-term financial assistance.

He added, “In the first years after 2003, the Fund provided significant support to Iraq through various programs, including the SBA Credit Readiness Program and the Rapid Financing Instrument.

For example, in 2016, the International Monetary Fund approved an SBA Credit Readiness Program worth 5.34 Billions of dollars to support economic reforms in Iraq, and Iraq received two-thirds of the above amount, and it was paid in full within five years.”

Saleh continued, “In 2021, Iraq requested an emergency loan worth $6 billion from the International Monetary Fund, and it appears that the loan was not materialized because it was not linked to one of the Fund’s programs at the time,” noting that “methods of cooperation with the International Monetary Fund have been targeted to support government reforms.”

 And confronting the economic crises that resulted from the decline in oil prices, which were linked to fluctuations in the balance of payments and its effects on economic activity.”

He stated, “Since 2003, the value of the loans and financial aid granted by the International Monetary Fund to Iraq has amounted to several billion dollars, and their total does not exceed 7 to 8 billion dollars and has been fully repaid, with a focus when granting loans on implementing programs linked to supporting macroeconomic stability and implementing reforms.” necessary finances.

Al-Alaq: Our Procedures Using The External Transfer Platform Prevented Money Laundering Operations

Economy |  05/16/2024   Mawazine News – Baghdad   The Governor of the Central Bank of Iraq, Ali Mohsen Al-Alaq, stated today, Thursday, that the electronic external transfer platform prevented the use of external transfers as a means of money laundering operations.

Al-Alaq said, in a statement received by Mawazine News, “At the Arab Forum for Anti-Corruption Bodies and Financial Investigation Units in the Kingdom of Saudi Arabia, he delivered a speech about the efforts of the Central Bank of Iraq to spread financial transparency, collect information about the real beneficiary, and exchange it at the international level.”

He stressed, “The recent measures taken by the Central Bank of Iraq, represented by the use of the electronic external transfers platform, which effectively contributed to identifying the real beneficiary, and prevented the use of external transfers as a means of money laundering operations.”

He pointed out that “the use of the cash sales platform contributed to the arrival of foreign currency to the real beneficiaries who are travelers or students outside Iraq, as well as other cases that need foreign currency in accordance with the law.”

Iraq Sells Nearly 300 Million Dollars At A Currency Auction

Economy News – Baghdad   On Thursday, the Central Bank of Iraq’s dollar sales amounted to more than $281 million at the currency auction.

The Central Bank sold in its auction today 281 million and 134 thousand and 221 dollars, which it covered at a base exchange rate of 1,305 dinars per dollar for documentary credits and international settlements for electronic cards, at a price of 1,310 dinars per dollar for external transfers, and at a price of 1,310 dinars per dollar in cash.

Most of the dollar sales went to strengthen balances abroad in the form of transfers and credits, which amounted to 259 million 94 thousand and 221 dollars, an increase of 91% over cash sales amounting to 22 million and 40 thousand dollars.

The number of banks that purchased cash dollars reached 5 banks, while the number of banks that responded to requests to enhance balances abroad reached 16 banks, and the total number of exchange and brokerage companies participating in the auction was 25 companies. 113 views 05/16/2024 –

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Provoking Thoughts and Points to Ponder on Advice :

If you aren’t rich, you should always look useful.  – Louis-Ferdinand Celine

He who can lick can bite.  – French proverb

When a man comes to me for advice, I find out the kind of advice he wants, and I give it to him. – Josh Billings

We only make a dupe of the friend whose advice we ask, for we never tell him all; and it is usually what we have left unsaid that decides our conduct.  – Diane de Poitiers

Advice is like snow; the softer it falls, the longer it dwells upon, and the deeper it sinks into, the mind.  – Samuel Taylor Coleridge

The true secret of giving advice is, after you have honestly given it, to be perfectly indifferent whether it is taken or not and never persist in trying to set people right.  – Hannah Whitall Smith

I give myself, sometimes, admirable advice, but I am incapable of taking it.  – Mary Wortley Montagu