Iraq Economic News and Points To Ponder Wednesday AM 6-12-24


Iraq Economic News and Points To Ponder Wednesday AM 6-12-24

Expert: Dealing In The Dollar Remains And Speculation In Prices Is Temporary

Time: 06/11/2024 20:21:14 Read: 1,911 times   {Economic: Al-Furat News} The economic expert, Bassem Jamil Antoine, considered the issue of price speculation “temporary,” while he believes that dealing in the dollar will remain in Iraq.

Antoine told {Al-Furat News} that:

 “The dollar will not be cut off from the local markets because the rate of entry of the dollar into Iraq daily is no less than 3 million from the sale of oil.”  He added,   “Speculation in prices is temporary and short-lived because the government was able to maintain prices through the regularity of the food basket, and  there is not much demand for the dollar.

The pumping continues, demands are met, and speculation operations have been controlled.” 

Antoine pointed out, “It is possible that there will be a slight increase during the Eid al-Adha period; unless the banks continue to take their share of it and pump it to the markets, we will be able to control it in general.”

 Today, Tuesday, selling prices in the field of banking in the local markets in Baghdad reached 148,750 Iraqi dinars for 100 dollars, while purchasing prices reached 146,750 dinars for 100 dollars.خبير-التعامل-بالدولار-باقي-والمضاربات-بالأسعار-وقتية

Unusual”… A Government Advisor Proposes The Idea Of ​​Establishing A Sovereign Wealth Fund

 Time: 06/11/2024 21:11:57 Read: 2,717 times  {Economic: Al-Furat News} The economic and financial advisor to the Prime Minister, Mazhar Muhammad Saleh, proposed an “unusual” idea to establish a sovereign wealth fund.

Saleh said {to Al-Furat News} that:

 “The SWF sovereign wealth funds, which Kuwait started with the Generations Fund since the 1950s, were followed by surplus countries exporting raw materials in general and oil in particular, on the basis of diversifying the investment of those financial surpluses in financial and real investment opportunities in major economies.”

Outside their countries through a fund called the Sovereign Wealth Fund (SWF) whose function is to manage the investment of surpluses in financial and real assets outside their countries, and

the reason is due to an issue called “weak absorption capacity.”  He explained,

“That is, the weakness of the ability to transfer those surplus savings from revenues from exporting natural resources into investments within the state itself due to many internal structural factors

(because the surplus saving resources resulting from a surplus in the current accounts of its balance of payments exceed its available capabilities to spend or spend on internal development projects or investment.”

 Those revenues from exports are immediately invested in operations within the economy, noting that

those surpluses are capital assets that can be reinvested and generate value-added chains that multiply the national income of their countries many times over.

Saleh added,   “Based on the above, sovereign funds have emerged in the world (which today are governed by standard operating rules called the Santiago Principles (which are principles established by the International Monetary Fund to evaluate and govern the work of these funds),” noting that

 “Iraq (unfortunately) has exhausted Its balance of payments surpluses were consumed by wars and conflicts during the same period, 1980-2003, in which the world’s sovereign wealth funds increased, while during those arduous decades our country turned into a group of “deficit” countries and fell into the trap of foreign debt, specifically since the year 1980 and the escalation of the Iran-Iraq war.”.  He went on to say,

 “So far, our country is not considered one of the countries of financial surplus, and the

 reserves of the Central Bank of Iraq supporting the stability of the Iraqi dinar, which currently amount to more than 100 billion dollars, are invested in a very specific portifolio investment portfolio, which is a semi-sovereign wealth fund, and foreign reserves are assets.”

 Financial instruments are always semi-liquid and do not involve long-term investments, such as shares in factories or real estate, as other sovereign wealth funds do.

Rather, reserves are invested in short-term, low-interest financial instruments, such as US Treasury bonds and others with a high credit rating of Aaa, and they tend to be always semi-liquid and low-risk. Through safe investments, but usually with low or fixed returns.  Saleh said,

 “However, the foreign reserves of central banks are not considered among the sovereign wealth funds (such as the Norwegian, Saudi, Chinese, and other funds currently),” stressing,

“We should think from outside the box, as it is said, by establishing a sovereign wealth fund for Iraq.” Although our country is not classified as a group of surplus countries.”

Waad, Iraq “currently is the ninth country in terms of natural wealth and is among the world’s countries of more than 188 countries, and

 the natural wealth of the race in the ground is estimated at approximately 16 trillion US dollars,” explaining,

“If we exclude oil and gas, it is possible to establish an effectiveness to manage a sovereign wealth fund.” As follows:

 A- Establishing an Iraqi government holding company with global partnerships to help invest these natural resources.

 B- The holding company undertakes to reinvest the returns from natural resources

      (i.e., which are in the possession of the holding company) and

     direct them to various internal investments,

     directing their profits towards the accumulation of assets of a *sovereign wealth fund* and the

     holding company undertakes reinvestment activities for the benefit of the internal sovereign wealth fund itself, i.e.

 The  fund’s returns are in reinvestment in investment opportunities to diversify the national economy.

 That is, through (managing an internal sovereign wealth fund for reinvestment, but within the economy itself).  Saleh concluded by saying,

“This is the summary of my idea that I am defending in establishing an Iraqi sovereign wealth fund,

      but within the national economy, and

     it is responsible for reinvesting the proceeds of the fund itself in development projects, with two parts, a

     part that remains for the benefit of the fund itself and a

     part that goes for the benefit of the national economy within the development program.

 Also, The method of managing investments through a joint public holding company affiliated with the internal sovereign fund itself is the mechanism used to invest the fund’s resources by diversifying some aspects of the national economy into agriculture, industry, services, and available economic opportunities.”غير-مألوفة-مستشار-حكومي-يطرح-فكرة-تأسيس-صندوق-للثروة-السيادية

The Center For Banking Studies Organizes An Educational Workshop On Anti-Money Laundering Procedures

 June 11, 2024  The Center for Banking Studies at the Central Bank of Iraq organized an educational workshop on the Anti-Money Laundering and Terrorist Financing (GOAML) system for workers in exchange companies.

 The center confirmed that the workshop aims to increase the awareness of officials and workers in the field of reporting suspected cases of money laundering in exchange and electronic payment companies.

The workshop focused on the other goal, which was to introduce the Financial Action Task Force (FATF) standards to the participants and urge them to apply them in their areas of work.

 The workshop will last for three days, and

      workers in category (A) exchange companies participate on its first day, while

     workers in category (B) exchange companies participate on its second day, and the

     third and final day witnesses the participation of workers in electronic payment companies.

 Central Bank of Iraq   information Office  June 11, 2024    

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Provoking Thoughts and Points To Ponder On Adversity:

 Necessity is often the spur to genius.  – Honore de Balzac

Necessity is the mother of “taking chances.”  – Mark Twain

Necessity makes even the timid brave.  – Sallust

People wish to be settled; only as far as they are unsettled is there any hope for them. – Ralph Waldo Emerson

Difficulties are meant to rouse, not discourage. The human spirit is to grow strong by conflict. – William Ellery Channing

Adversity causes some men to break, others to break records.  – William A. Ward

I think there is this about the great troubles – they teach us the art of cheerfulness; whereas the small ones cultivate the industry of discontent.  – Mary Adams