Monday Afternoon Iraq Economic News Highlights 7-30-23
Economist: Tourism is behind the high price of the dollar
Economy 07/31/2023 number of readings: 180 Baghdad-Iraq today: Professor of Economics at the University of Basra, Nabil Al-Marsoumi, revealed one of the reasons for the rise in the dollar in the Iraqi market. Al-Marsoumi said in a press statement, “Tourism is another source for the high price of the parallel dollar, as Iraqis constitute 55% of the total number of foreign tourists who entered Iran in 2022.” He added, “Foreign tourists spent $6.2 billion in Iran in 2022, and Iraqi tourists spent $3.410 billion in 2022.”
And he continued, “Because of the American sanctions that do not allow Iraqi travelers to Iran to convert the dinar into dollars at the official rate, the Iraqis are forced to request or buy the dollar, which is a real request and not for these purposes.” of speculation at the parallel price, LINK
A Government Meeting Discusses Addressing The Phenomenon Of Manipulating The Value Of The Iraqi Dinar Against The Dollar
Today, Monday, a meeting was held at the headquarters of the Supreme Judicial Council to address the phenomenon of manipulation of the value of the Iraqi dinar against the dollar.
A statement by the judiciary stated that “a meeting was held at the headquarters of the Supreme Judicial Council within the framework of supporting national efforts to support the Iraqi dinar and to address manipulation and speculation by some speculators in violation of the law.”
He added that “the meeting included the head of the Public Prosecution Service, the head of the Judicial Supervision Authority, the senior investigative judges of the second and third Karkh Investigation Courts, and the Rusafa Investigation Court specialized in cases of integrity and economic crime, in addition to the head of the National Security Agency and the Undersecretary of the Interior Minister for Intelligence Affairs.”
He continued, “The meeting discussed the best ways and mechanisms to address the phenomenon of manipulation of the value of the Iraqi dinar against the dollar, in order to ensure its reduction and the prosecution of those involved in it in accordance with the laws in force.”
Sudanese Financial Advisor Confirms The Stability Of The Dollar Exchange Rates After The Procedures Of “Small Importers”
Policy 07/30/2023 Number of readings: 252 Baghdad-Iraq today: On Sunday, the financial advisor to the Prime Minister, Mazhar Muhammad Salih, announced a movement to stabilize the exchange rates of the dollar, by providing soft financing operations for small importers at the official exchange rate, which amounts to 1,320 dinars per dollar.
Saleh said, in a statement to the official agency, that “the foreign trade of small merchants constitutes the highest number in the import commercial market activity, and its rate may reach 60 percent of the local market’s needs for imported goods.”
And he added, “With the aim of dismantling the monopolistic commercial financing ring to finance foreign trade and all external transfer operations that result as dangerous mediating forces that carry a lot of colored noise between the small trader and financing foreign trade in currency, whether in The position of international compliance or dealing in foreign currency outside the stability controls, in addition to its danger.”
In spreading a dangerous pricing pattern based on floating the prices of goods and services at the parallel market exchange rate, which leads to a dangerous transfer of inflation from the exchange market to the general level of prices and endless price disturbances, so the Iraqi Trade Bank works with direct openness in providing soft financing operations for small importers at an affordable price.
He pointed out that “this matter will lead to providing a flexible commodity supply and help to establish stability in the parallel exchange market, as well as removing the forces of commercial monopoly from the most dangerous mediation process between small traders and the exchange market, in a way that achieves stable competitiveness in which the parallel exchange rate gradually matches the official exchange rate.” LINK
Economic Circles Suggest The Return Of Calm To The Currency Exchange Markets In Iraq
2023.07.31 Baghdad – Nas Iraqi economic and financial circles suggested that calm would prevail again in the local currency exchange markets during the coming period, after the US decisions regarding the activities of banks in the oil-producing country caused unrest recently, according to a report by the London-based Al-Arab newspaper.
Economic expert Abd al-Rahman al-Mashhadani predicted, in a statement to the official Iraqi News Agency, that the exchange rate would soon drop to around 1,400 dinars to the dollar.
Al-Mashhadani said, “The issuance of the US Treasury’s decision to prevent 14 Iraqi banks from dealing in dollars caused fluctuations in the exchange rate between high and low.”
He added, “The government subsequently applied a series of measures based on the Prime Minister’s directives, which coincided with other measures from the Central Bank.”
The Central Bank authorized about 116 exchange companies to obtain their shares of the dollar from new banks other than those that had been issued a decision to prevent them, and this matter will contribute to the rise in the value of the dinar against the dollar again.
Al-Mashhadani emphasized that “these measures will restore prices to what they were before the crisis, but more than that. There are also government measures to reduce taxes imposed on entering the currency auction, and this will lead to the stability of prices, which we expect to reach 1400 dinars to the dollar.
The Governor of the Central Bank, Ali Al-Alaq, had confirmed that the rise in the exchange rate was temporary and that the bank had diagnosed the manipulators, while noting that the government had approved a proposal by the bank to ease tax procedures to obtain the dollar.
He also explained that preventing Iraqi banks from dealing in dollars came against the background of checking bank transfers for the past year, and before the application of the electronic platform, and before the formation of the current government as well.
Last week, dozens of people organized a protest movement in front of the Central Bank, and bank owners called for official action from government agencies to stop the sharp rise in the dollar exchange rate, which followed the inclusion of 14 Iraqi banks on the blacklist by the United States.
The market price of the dollar at that time jumped from 1470 to about 1570 dinars after Washington banned Iraqi banks from conducting transactions in US dollars on suspicion of using them for money laundering and transferring funds to Iran.
Haider Al-Shamaa, owner of a private bank in Baghdad, said on the sidelines of a press conference last Wednesday that “the inclusion of nearly a third of private banks in the list of those prohibited from dealing in US dollars will have serious consequences.”
Al-Shamaa called on the Iraqi government to work to prevent the damage caused to the owners of private banks.
According to the Central Bank, local banks that are deprived of dealing in dollars, their requests constitute only about 8 percent of the total foreign transfers.
Last Wednesday, Al-Alaq told the official Iraqi News Agency that the central bank continues to provide dollars at the official rate of 1,320 dinars to the dollar “for all legitimate transactions,” including “transfers and credits for various imports.”
After the US invasion of Iraq nearly two decades ago, specifically since 2004 until now, the exchange rate has changed more than once, according to circumstances, whether it is upward or downward.
And the government decided in last year’s budget to reduce the value of the dinar by 1450 dinars per dollar, after it was 1182 dinars per dollar, in order to face the financial crisis and the deterioration of the local economy.
The decision caused a crisis in the local market, as prices of commodities and merchandise rose in the local markets, harming the working class.
Experts said that the main reason behind the devaluation of the Iraqi currency at that time was to bridge the inflation gap that emerged clearly last year during the epidemic and with the continued collapse of global oil prices, which is a major source of Iraqi financial resources.
Parliamentary Oil: Domestic Gas Does Not Cover The Need, And America Is Obstructing The People’s Access To Energy
Information / Baghdad… A member of the Oil and Natural Resources Committee, Kazem Al-Touki, confirmed Iraq’s inability to secure gas to operate power stations from local production, accusing America of standing against attempts to secure gas.
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Al-Touki told Al-Maalouma, “Iraq needs about 5,000 billion standard cubic meters of gas in order to operate power stations, especially in the summer season, at a time when Iraq was unable to produce more than 1,000 cubic meters of gas, which pushes the government towards Import the rest.
He added, “America is trying and moving to ensure that the Iraqi people are not comfortable and to create problems, in order to push them towards going out against the government and repeating the scenario of the events of 2019 to topple the government, as it did with Adel Abdul Mahdi.”
And he indicated that “America can bypass some files that the people need, especially in the issue of gas supply in order to operate power stations without causing problems or obstructing this matter, but it stood before the people’s need to ensure that they stand against the government.” LINK
Chambers Of Commerce: The Parallel Market Prices For The Dollar Are On The Way Down
Information / Diyala.. The Chambers of Commerce confirmed, on Monday, that the parallel market prices of the dollar are on their way to decline for three reasons.
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The head of the Chambers of Commerce in Diyala, Muhammad al-Tamimi, said in an interview with Al-Maalouma, that “the removal of 14 Iraqi banks from the currency sale window by the Central Bank a week ago led to the deprivation of dozens of banking companies associated with it of liquidity in the dollar, which led to a scarcity and push prices.” to up”.
He added, “The Central Bank dealt with the matter and ensured the flow of dollars to banking companies in order to meet the market’s need,” pointing out that “the dollar is on its way to a gradual decline in the coming days for 3 reasons, most notably dealing with the file of banking companies and providing dollars for them in addition to increasing the supply while reassuring the markets that it is There are no new penalties for banks.”
He pointed out that “America’s use of the dollar in Iraq is undisputed in terms of pressure, pointing to” the importance of expanding the circle of diversity of hard currencies in order to reduce the duration of pressure and provide alternatives in foreign trade. LINK
A Western Report Is Betting On The Collapse Of The “OPEC Plus” Alliance
Economy Despite the huge oil price gains caused by Russia’s war in Ukraine last year, OPEC members are reaping hugely disproportionate returns from a shrinking basket. Indeed; The alliance is under severe pressure due to the decline in oil demand and lack of coordination among members, and some experts believe that “OPEC Plus” is at risk of collapsing in the near term.
The “Oil Price” website published a report on the future of the OPEC Plus alliance. Considering that these are the best and worst times for OPEC; Depending on which member you are asking about.
The site said, in its report, that 2022 was a distinguished year for “OPEC Plus.” with nominal revenue at its highest level since 2013; to $888 billion for 2022, according to figures from the US Energy Information Administration; They increased by a whopping 54 percent from 2021 levels and slightly higher than the 2014 total, after which oil prices began their long decline.
However, the real numbers are not rosy; Once inflation is factored in, prices are actually down by about a fifth compared to 2014, though it’s still a significant 43 percent increase from last year.
And the site stated that “OPEC” revenues may appear to be on a significant upward trend after the epidemic thanks to high oil prices, but the actual number of barrels being sold is still alarmingly low. “While the amount increased last year, it remained below pre-pandemic levels and among the lowest in any year so far this century,” Bloomberg reported earlier this month. “
In fact, Taking all factors into account, real per capita export earnings in 2022 are lower than they were in 2009, when global GDP shrank and nominal oil prices fell by about 40 percent.
The site stated that “OPEC” is concerned for understandable reasons. In the wake of last year’s war windfall, Saudi Arabia – the group’s de facto leader – pushed for sharp production cuts in order to keep oil prices high, but a further drop in the amount of barrels produced and sold backfired for the government. Saudi Arabia. this week only;
The International Monetary Fund cut its growth forecast for Saudi Arabia from 3.2 percent to just 1.9 percent, citing “production cuts announced in April and June in line with an agreement through OPEC Plus” as a driving factor for the revised forecasts, and this decline represents a complete turnaround for Saudi Arabia. , which was the fastest growing economy
The site added that the burden of production cuts – and the resulting economic blow – is not borne equally by the “OPEC Plus” members. Greg Priddy, a consultant at Spot Run Advisory and a senior fellow at the Center for the National Interest in Washington, D.C., told Middle East Eye earlier this month: “Russia has been pretty much cheating and avoiding cuts in Saudi Arabia. “. In fact, the International Energy Agency stated that Saudi Arabia is on its way to losing its position as the largest oil producer in “OPEC Plus”; Where Russia is set to overtake it.
The site stated that “OPEC” needs Russia in order to maintain its ability to control oil prices. As “Bloomberg” published a report in which it said that “a growing number of OPEC members have far exceeded their prime in terms of production capacity anyway, and they have stumbled differently due to war, sanctions and mismanagement.” But the shift of power away from Saudi Arabia and towards Russia raises a major problem for the group’s cohesion, and perhaps its longevity.
The site concluded its report with statements by Per Leander, Director of the Clean Energy Transition Foundation, which he made last week to CNBC; He said he was “very sure” that the “OPEC+” alliance would break, adding that “the more negative growth there is, the less you cooperate.” And if the “OPEC Plus” coalition, which currently controls about 40 percent of the world’s crude oil, breaks away, oil prices could drop to $35 a barrel. https://takadum-news.com/archives/176251