Iraqi News Highlights and Points to Ponder Tuesday AM 5-28-24

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Iraqi News Highlights and Points to Ponder Tuesday AM 5-28-24

{Al-Furat News} Publishes The International Monetary Report On Iraq And Praises Its Financial Reforms

Time: 05/27/2024   {Economic: Al-Furat News} The report issued by the International Monetary Fund mission for the current year 2024 for Article Four consultations praised the Iraqi government’s measures, including the monetary policy led by the Central Bank of Iraq.

The report, a copy of which was obtained by Al-Furat News, indicated that “the Central Bank of Iraq has taken several measures aimed at stabilizing the national currency and controlling monetary inflation.”

He added, “The Central Bank raised the interest rate on monetary policy tools from 4% to 7.5% and increased the banks’ mandatory reserve requirements from 15% to 18%. These steps were decisive in reducing the inflationary pressures that Iraq suffered from, and this contributed to creating an environment A more stable economy.”

The report stressed that “important reforms in the banking sector, such as the gradual increase in bank capital and mergers between small banks, aim to strengthen the banking sector and increase its efficiency and flexibility in the face of economic shocks.”

The report noted that “Iraq has implemented new compliance measures to improve the transparency of cross-border financial transactions, by launching an electronic platform that imposes the disclosure of financial beneficiaries, which enhances the integrity of financial transfers in accordance with international banking standards, in addition to the role of the Central Bank of Iraq in expanding Correspondent banking relationships, to facilitate smoother international trade financing operations.” LINK     To view the full report, click here

The Dollar Is Moving Down In The Iraqi Market For The Second Day In A Row

Economy | Baghdad today – Baghdad  Today, Tuesday (May 28, 2024), the exchange rate of the dollar against the dinar recorded a decline on the main stock exchange in the capital, Baghdad .

The “Baghdad Today” correspondent said, “The dollar prices on the Al-Kifah and Al-Harithiya stock exchanges recorded 144,800 dinars for every 100 dollars.”

He added, “Selling prices in exchange shops in local markets in Baghdad stabilized, as the selling price reached 145,750 dinars, while the purchasing price reached 143,750 dinars for every 100 dollars.”

Below is the price of the dollar on the stock exchanges of six governorates: –

Erbil 144,700 offers

Basra 144,850 views

Najaf 144,800 views

Mosul 144,700 views

Kirkuk 144,600 views

Sulaymaniyah 144,600 views LINK

Dollar Prices Decline As Markets Await Important Inflation Data

Economy |Baghdad today – follow-up  Dollar prices fell during trading today, Tuesday (May 28, 2024), after a slight increase in dealers’ desire before the release of important inflation data from major economies this week .

Currency movements were largely weak in the first hours of trading in Asia after a quiet session last night due to holidays in Britain and the United States, but the general mood was positive with the rise of global stocks .

The euro rose to $1.0860 despite some cautious comments from European Central Bank policymakers on Monday and data showing a decline in German business confidence in May .

The markets are awaiting the German inflation data scheduled to be released tomorrow, Wednesday, and the broader euro zone data on Friday, to confirm the expected cut in interest rates by the European Central Bank next week, as well as to obtain indications of how quickly the bank can make a subsequent cut decision .

The British pound settled near its highest level in more than two months and reached $1.2774 in the latest trading, while the New Zealand dollar rose about 0.1 percent to $0.6155, which is its strongest level since mid-March .

The Australian dollar rose 0.03 percent to 0.6657 US dollars .

Markets are mainly focused on the US Core Personal Consumption Expenditures Price Index report, which is the Federal Reserve’s preferred measure of inflation, and is expected to remain unchanged on a monthly basis .

US interest rate expectations have been the main driver of the currency over the past few years, and the latest inflation reports from the world’s largest economy have been characterized by volatility, which has weakened policymakers’ confidence in the pace and size of interest rate cuts expected this year .

Against a basket of major currencies, the dollar index fell 0.01 percent to 104.55 points .

The yen fell to near the level of 157 to the dollar, and in the latest trading reached 156.87 to the dollar, after the Japanese currency was heading towards achieving its first monthly gain for the year 2024 .

As for cryptocurrencies, Bitcoin fell 0.47 percent to $69,255, while the price of Ethereum fell 0.2 percent to $3,882.20.   Source: Agencies   LINK

The Budget Enters The Circle Of Complexity And There Is A Possibility That It Will Be Returned To The Government

Special Sumerian  05-27-2024  88 views  Due to the reduction in allocations to the governorates, the budget enters a circle of complexity and there is a possibility that it will be returned to the government

Many expect that it will be difficult to pass the budget schedules if the governorates’ allocations remain low and as came from the government. On the other hand, the Finance Committee is working to find a balanced formula for its schedules before approving them.  LINK 

The Framework Falls Into The Trap Of The Tripartite Budget: We Will Not Vote On The 2024 Schedules Before The Amendment

Posted On05-28-2024 By Sotaliraq   Baghdad/ Tamim Al-Hassan

Muhammad Al-Sudani, Prime Minister, embarrasses the Shiite political forces due to the reduction in governorate allocations that appeared in the new 2024 budget tables. The amounts decreased to 60 and 70% in all governorates from the 2023 budget, with the exception of Baghdad, while these forces were waiting for additional funds to support their popularity there.

Some Shiite parties within the coordination framework appear to “regret” accepting the draft tripartite budget, which was passed last year, and they had warned against it at the time.

The conflict over allocations escalated, which resulted in the search for early electoral gains, leading to Basra threatening to declare the region, and a parliamentary committee refusing to vote on the schedules.

Last week, Sudanese announced in a press conference the details of the budget schedules, which amounted to more than 210 trillion dinars, with a deficit exceeding 63 trillion dinars.

Leaks said that the deficit could have been more than that, but the Prime Minister tried greatly to pressure expenditures.

These leaks indicated that Sudanese prevented an increase in the new budget of at least 20 trillion, which was part of a plan by political leaders in support of the new conservatives.

Expenditures in the new budget tables, which are part of the tripartite budget, increased by about 12 trillion dinars over last year (it was more than 198 trillion dinars). Al-Sudani said in the press conference, “There are no justifications for increasing the allocations, as they are already high, and we must make better use of these funds.”

Meanwhile, a political advisor to one of the parties told Al-Mada: “Some parties in the coordination framework said that they have now confirmed their previous fears of passing the tripartite budget due to the reduction in allocations to the governorates.”

In the budget table leaked by some representatives, a reduction of up to about 70% appears in some governorates compared to last year’s budget, which was happening in Basra and Dhi Qar.

The advisor, who requested that his name not be published, notes that “those parties were hesitant to approve the draft tripartite budget because they would not be able to pressure the Prime Minister on most of the items.”

Last year, Parliament gave the government the green light for the first time to draw up a budget for the next three years, while requiring only that it approve the sum schedules for each year.

The State of Law, led by Nouri al-Maliki, was the most skeptical about Sudanese intentions behind the new project, according to MPs’ statements.

According to what was circulated at the time, the Shiite forces imposed a ban on the Prime Minister from participating in the local elections that took place at the end of last year, to ensure that the funds were not exploited for electoral propaganda.

Provincial test

This new budget came for the first time after local elections that stopped for 10 years, while the political forces are subjected to a harsh test in the extent of their success in managing these cities.

The budget tables show a decrease in allocations in Basra from more than 2 trillion and 800 billion dinars in 2023 to more than 850 billion dinars in 2024. As a result, members of the Provincial Council threatened to declare Basra a region, a proposal that was rejected by most of the Shiite forces in Basra.

Samir al-Maliki, an activist in the city and one of the supporters of the Basra region, told Al-Mada: “The political parties were refusing to support us, and now, when their interests have been harmed, they have returned to threatening the region.”

Al-Maliki calls on the local authorities in Basra, if they are serious about their demand for the region, to immediately begin conducting a population census for the province.

Parties, most notably Al-Dawa, had previously thwarted attempts to declare Basra a region, and accused supporters of federalism in the south of seeking to tear the country apart.

Representatives from Basra, including Mustafa Sanad, who is close to Al-Attar, criticized the granting of larger allocations to the Kurdistan region.

But the Ministry of Planning denied this information in a previous statement. She said that the total allocations to the governorates are 41 trillion dinars for investment, including 4 trillion dinars only for the Kurdistan region, and 38 trillion for the rest of the governorates.

She added, “The comparison between regional development allocations to the governorates and the total investment spending of the Kurdistan region is incorrect.”

The Ministry of Planning has been criticized for the funds allocated to the ministry.

Nabil Al-Marsoumi, a professor of economics in Basra, said in a post on Facebook, “One of the strange things in the 2024 budget is that the investment allocations to the Ministry of Planning amount to 1.855 trillion dinars, even though the ministry does not have large investment projects to implement.”

The strangest thing is, Al-Marsoumi added, “The investment allocations to the Ministry of Planning in the 2023 budget were 7 trillion dinars, of which only 24 billion dinars were spent in 2024, with an implementation rate of only 1%.”

In another series of publications, the professor of economics at Al-Maqal University in Basra revealed that 7 ministries had a “zero” implementation rate in last year’s budget, namely: Foreign Affairs, Defence, Labor, Planning, Agriculture, Environment, and Immigration. He explained that the implementation rate of the Ministry of Communications was 1%, Commerce 2%, and Culture 4%.

At the governorate level, Diwaniyah was the lowest at 5%, then Babil 17%, Maysan 18%, then Diyala 20%, then Muthanna 24%, Karbala 27%, then Basra 36%, while the highest implementation rate was in Nineveh 62%. Al-Marsoumi said that these numbers mean that “the implementation rates in the governorates are much better than the ministries, which eliminates one of the justifications for reducing investment allocations to the governorates.”

In Parliament..

A representative in the State of Law and in the Legal Committee confirmed that the budget tables included fundamental changes outside the context, indicating that they were not voted on in this way.

Representative Raed Al-Maliki said in a press conference that “the tripartite general budget law does not require a new vote from the House of Representatives, which means that the schedules should be identical and in agreement with what was included in the budget law and do not include new amendments.”

But he added, “The schedules sent to the House of Representatives included fundamental amendments to the provisions of the general budget regarding revenues and expenditures.”

He continued, “There are changes, including reducing the allocations to some governorates, and others increasing the region’s allocations, which may include introducing amounts for contracts for oil companies in the Kurdistan region, and these were not included in the tripartite general budget law.”

He stated, “This matter requires proceeding with the context of amending the general budget law, that is, subjecting it to the first and second readings and then voting on it.”

He added, “In light of this, we express our objection to reducing the governorates’ allocations in the budget, and we will have a position on that, and we will not vote on the budget if it continues in this manner.”

With the same threat, Moin Al-Kazemi, a member of the Finance Committee and a leader in the Badr Organization, said that “they will not vote on the tables in this way without amendment.”

There are 12 days remaining until the supposed deadline announced by the Chairman of the Finance Committee, Atwan Al-Atwani, to finish discussing the schedules within the committee and then vote on them in Parliament, which he said “will not exceed the 9th of next June.”

In the same context, Mustafa Al-Karaawi, a member of the Finance Committee, expects in contact with (Al-Mada) that “the committee will finish the details of the budget schedule during the last extension of Parliament’s work.”

Al-Karaawi says, “Our work includes providing a technical vision for these schedules, and preventing any political deals behind granting some allocations.”

The member of the Finance Committee indicated that the meeting was held with the Ministries of Planning and Finance to find out “the reason for the increase in spending and deficit and the reduction of allocations to the governorates,” indicating that “our authority is to reduce the amounts and transfers.”   LINK