Iraqi News Highlights and Points to Ponder Friday AM 12-1-23


Iraqi News Highlights and Points to Ponder Friday AM 12-1-23

A Government Advisor Explains The Reasons For The Delay In Stabilizing The Exchange Rate In The Market

Economy  2023-11-30  Today, Thursday, the financial advisor to the Prime Minister, Mazhar Muhammad Salih, identified the priorities of the national project launched by Prime Minister Muhammad Shiaa Al-Sudani to protect the standard of living and end the influence of the informal market, while explaining the reasons for the delay in stabilizing the exchange rate in the market.

Mazhar Muhammad said, in a press interview, “Although the analysis of the main reasons for the continuation of the phenomenon of the exchange rate in the secondary market, which is witnessing fluctuations that are not commensurate with the strength of Iraq’s vast international reserves, in which the Central Bank of Iraq platform is responsible for financing external transfer requests from foreign currency that is specifically used For the purposes of financing foreign trade for the private sector,

however, it is still the subject of due diligence in organizing external transfer requests at an exchange rate of 1,320 dinars per dollar on the part of banks that is not commensurate with international compliance standards.”

He added, “Some of them have not reached the level of interest required globally because they mediate in the purchase of foreign currency for the benefit of the commercial community, some of which are subject to rejection. This accumulates a surplus demand that may find its way to financing and illegally towards the informal secondary market for exchange, which is a market that does not constitute… “Only 10% of the foreign currency supply, in addition to it being an illegal market and leaving colored noise on the stability of the exchange rate.”

He continued: “Today, economic policy is responsible for following additional import windows for basic commodities and maintaining their stable and financed prices at an exchange rate of 1,320 dinars per dollar, and at the forefront of that is adopting a policy of defending price stability towards providing an additional commodity supply with a stable price, and in a national project launched by the Prime Minister.”

To protect the standard of living in a way that removes the real income of the citizen from the price noise of speculative forces in the illegal exchange market.

He pointed out that “one of the priorities of this project is the launch of the government trade arm, in cooperation with the national private sector, by providing 4 additional baskets to strengthen the commodity supply, which extend between food (in addition to the food basket), the pharmaceutical basket, the building supplies basket, and the basket of widely used reserve materials, especially related to the transportation sector and others.” “.

He added: “Since the demand for foreign currency is a demand for foreign goods, services and benefits that take place outside the country (and not inside it as dollarization does and its harmful effects on the stability of the monetary system), the Iraqi monetary policy is working hard to address the problems of financing foreign trade.”

“The country has strong currencies that are stable in their exchange rates and at the same time adhere to the principles of international compliance and combating money laundering, in order to facilitate trade and investment relations between Iraq and its trading partners around the world.”

He pointed out that “these strong policies all provide a protective umbrella for economic stability, end the role of the irregular and illegal market, and distance their effects from price stability in a sustainable manner, as all of these policies work within the lofty goal of protecting Iraq’s monetary sovereignty and ending the use of foreign currencies in evaluating internal transactions.”

And keeping it away from the payments system and its operations within the national economy, which is a legacy that has extended since 1982, as dealing with the dollar internally in settling or paying for the buying and selling of goods, services, rents, and contracts within the national economy is an act that violates the law.

Deputy: Most Of The Problems Of The Center And The Region Are Due To The Lack Of An Oil And Gas Law

Local  Information/Baghdad..  The representative of the Kurdistan Democratic Party, Sharif Suleiman, confirmed today, Friday, that most of the problems occurring between Baghdad and Erbil occurred as a result of the absence of an oil and gas law, pointing out that there is an active movement to approve this law.

Suleiman told Al-Maalouma, “What gives reason for optimism is the awareness of all political parties of the importance of the oil and gas law, as it has become necessary to move towards proceeding with its legislation within Parliament.”

He added, “The current stage requires accelerating the approval of the aforementioned law, especially since Iraq is in dire need of legalizing oil, gas, and natural resources, so that all governorates can obtain their rights.”

He stated that “most of the disputes and problems between the center and the region occurred because of the existence of the oil and gas law, and everyone is moving today to pass it in a formula that serves everyone and guarantees the rights of the oil-producing governorates. It is possible that an amendment will be made to the budget law in the event that the oil and gas law is approved so that it is compatible with Budget paragraphs. Ended 25 n   LINK

The Security Restriction Has Proven To Be A Failure… 3 Benefits Of “Importing The Dollar” And Recognizing The Parallel Market

Baghdad today – Baghdad   Today, Wednesday (November 29, 2023), the Diyala Chamber of Commerce reviewed the existence of 3 positives for importing the dollar from abroad into Iraq, noting that the Central Bank officially recognized the existence of the parallel market and its influence.

The head of the Diyala Chamber of Commerce, Muhammad al-Tamimi, said in an interview with “Baghdad Today” that “the Central Bank giving some banks the green light to import the dollar to meet internal demand is a step in the right direction and carries in its content 3 positives, the most prominent of which is creating a greater supply and meeting customers’ needs at a more flexible pace,” expecting “The dollar will witness a gradual decline after the arrival of more shipments.”

He added, “The security restrictions surrounding the mechanisms for selling the dollar within the parallel market have proven to be ineffective and have caused prices to rise more than once,” pointing out that “the step reflects government recognition of the parallel market and its influential role in shaping the exchange for buying and selling the dollar.”

He pointed out that “the dollar crisis will remain and the difference between the official and the parallel will decrease, but not to the level of significant convergence, because a large portion of imports come from outside the platform to merchants and companies, which means that the parallel market will continue to suffer from pressure.”

Earlier today, a source in the Central Bank of Iraq revealed the arrival of “dollar” shipments to Baghdad International Airport, imported by Iraqi banks.

The source confirmed to “Baghdad Today,” “The continued arrival of dollar shipments through Baghdad International Airport, imported by Iraqi banks to meet customer requests.”

He explained, “It is hoped that additional shipments will arrive within the next few days.”

The Central Bank of Iraq had directed banks to meet the stipulated requirements for the dollar at the official rate, while the rest of the requests for the dollar are made according to supply and demand, which means lifting the ban on trading in the dollar, and making it permissible in the parallel market.

Despite The OPEC Plus Reduction, Oil Continues To Decline

Time: 12/01/2023 Read: 897 times  {Economic: Al-Furat News} Oil prices continued their losses during trading today, Friday, the first of December, after producers in the OPEC+ alliance agreed to voluntary cuts in oil production over the first quarter of next year, but below analysts’ expectations.

Brent crude futures fell by about 0.4% to $80.53 per barrel, as crude had recorded monthly losses of more than 5% from November.

US crude futures also fell by 0.2% at $75.79 per barrel.

Yesterday, Thursday, Saudi Arabia, Russia, and some members of OPEC+ – which are responsible for pumping more than 40% of the world’s oil – agreed to voluntary cuts in oil production by about 2.2 million barrels per day in the first quarter of 2024.

However, 1.3 million barrels per day of these cuts represent an extension of the voluntary reduction in production by Saudi Arabia and Russia, and therefore the decision came in contrast to statements by some former delegates to OPEC+ regarding new additional cuts that may reach two million barrels per day.

As for the new reductions, which amount to 900 thousand barrels per day, they are divided by 200 thousand barrels per day from fuel exports from Russia, and the rest from 6 other members, as the UAE decided to reduce production by 163 thousand barrels per day, while Iraq reduced production by 220 thousand barrels per day. .  LINK

Provoking Points to Ponder on Experiences:

When I was young, I was sure of everything; in a few years, having been mistaken a thousand times, I was not half so sure of most things as I was before; at present I am hardly sure of anything but what God has revealed to me – John Wesley

No man was ever endowed with a judgment so correct and judicious, but that circumstances, time, and experience would teach him something new, and apprise him that of those things with which he thought himself the best acquainted, he knew nothing; and that those ideas which in theory appeared the most advantageous were found, when brought into practice, to be altogether impracticable – Terrence

However learned or eloquent, man knows nothing truly that he has not learned from experience – Wieland

Experience keeps a dear school; but fools will learn in no other, and scarce in that; for it is true we may give advice, but we cannot give conduct – Franklin

No man was ever so completely skilled in the conduct of life, as not to receive new information from age and experience – Terrence