Saturday Afternoon Iraq Economic News Highlights 7-29-23

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Saturday Afternoon Iraq Economic News Highlights 7-29-23

Economists: An Almost Complete Halt To The Applications Of The Dollar Exchange In Iraq

WRITTEN BY: SOCIAL BAGHDAD  07-28-2023   The electronic stock exchange applications witnessed a halt in displaying updates of the dollar exchange rate in the parallel market.

Economists pointed out that mobile applications that work to promote local exchange rates, black market exchange rates, their data do not reflect the real demand in the market as an auction and a real electronic stock exchange, but rather it is just a media display.

Earlier, experts warned against using these applications as a tool to change the direction of the market, due to their wide spread and the degree of dependence of markets, traders and merchants on their presented data, through the imaginary effect on exchange rates and the impact on the markets. LINK

19/08/2019 Talk About Re-Work Coin And Delete The Zeros From The Paper

19/08/2019  A member of the Parliamentary Finance Committee revealed that there is a tendency to reintroduce the coin that has been used for decades in the country, while another member of the Committee proposed to pre-empt the coining process by “deleting zeros” from the current currencies so that there would be value for the small cash classes.

 The committee member, MP Hanin al-Qadu, that “during meetings and discussions with officials at the Central Bank stressed the need to re-work coins that were used in Iraq during the past decades, rather than paper that is damaged and printed in large quantities again.”

 He explained, “The use of metal categories and their descent for trading gives a notional value of the currency,” noting that “a number of neighboring countries (exchange rates are very high against the dollar) and yet we find that it has a coin in order to preserve the currency and not need to request more papers Cash, especially in small categories. “

 He expressed surprise at the “policy of the Central Bank, which does not favor the introduction of coins for circulation in the Iraqi market.”

 The Central Bank of Iraq announced in April 2005 to offer coins of denominations of 25, 50 and 100 dinars for circulation for the first time after it was canceled by the regime of Saddam Hussein after the Gulf War in 1991.

 The Iraqi currency was canceled in 1991 when the international economic embargo on the country to increase the rate of inflation in Iraq by 1000%, and the result of the situation under the economic siege and a significant rise in prices led to the destruction of the value of the Iraqi currency and reaching a very low and severe exchange rate , Which made the coin and the few currency denominations without value.

 It is noteworthy that the Iraqi dinar, which was equal to 3.22 dollars before the occupation of the former Iraqi regime of Kuwait in 1990, its value fell to one dollar equivalent to three thousand dinars by 1996.

 Another member of Parliamentary Finance said, “The cost of a coin is more than paper money, and it is more difficult to carry it on the citizen.”  

MP Ahmed al-Saffar said that “inflation in the economy prevents the minting of coins and make them circulate among citizens,” suggesting that “there is a step to delete the zeros before the coinage process to be a value for small groups to large.”    https://www.basnews.com/so/

Hedging From Crises.. An Exceptional Demand For Gold In Iraq And Algeria

Economy  |Baghdad today – follow-up  The parallel currency exchange market and the real estate market are no longer the only ones affected by the rise in inflation and the collapse of the dinar in Algeria, as the gold market, which has lived in stagnation for years, is finally reviving due to the growing fears of citizens about the collapse of the country’s currency, and with it the fall of the faltering economy.

The demand for gold during the past months exceeded the Algerians’ rush to buy the precious metal with the beginnings of the “Corona” pandemic, which led to an increase in the price of one gram of “broken” (used) gold, to reach 7 thousand dinars ($ 51), for local 24-carat gold. carats, after it ranged between 4 thousand dinars ($29) and 5 thousand dinars ($37), earlier, and new gold prices rose by about two thousand dinars per gram, to touch the threshold of 10 thousand dinars per gram ($74). This comes in light of the spread of adulterated gold.

Omar, one of the sellers in the “Wad Kniss” garden, famous for selling gold in the center of the Algerian capital, reveals that “the fear of the fall of the value of the dinar has become a preoccupation for Algerians now, as they are all afraid of a repeat of the Venezuelan scenario.”

Sliding Conditions

For his part, the seller, Reda, said, “This period usually knows the recovery of the gold markets, as it is the season of weddings and social events, but the Algerians’ fear of slipping social and economic conditions prompted them to take refuge in gold, and what we live today we have already lived through in 2020 with Corona, and the year 2017, when The country witnessed a rush to acquire gold after the worsening decline in the value of the dinar.

In 2022, the Algerian currency lost more than 30 percent of its value against the dollar, after it jumped from 113 dinars to 139 dinars per dollar at the end of 2020, before settling at 135 dinars since the beginning of the current year, in the largest slide of the Algerian dinar against foreign currencies. This prompted inflation to double from 4 percent to 12 percent, according to government figures.

“Algerians’ fear of the collapse of the dinar increases with the passage of days, especially with their suffering from a decline in their purchasing power,” said economist Jamal Noureddine. Noureddine added, speaking to The New Arab, that “Algerians no longer trust their currency or even their country’s economy, and prefer to transfer their money to foreign currencies and gold, and this is a politically and economically dangerous matter.”

Negative Effects

He pointed out that Algeria lived through a similar scenario in 2020 with the emergence of the Corona pandemic, and in 2011 when the “Arab Spring” began, as citizens feared unrest in the country, so they rushed to extract money from bank balances and money kept in homes and convert them into euros by virtue of the geographical proximity with The old continent, which caused a severe liquidity crisis in the country, and the banks announced at that time the establishment of strict controls for daily withdrawals, and something of this is happening today. .

Regarding the negative effects, the Algerian expert says, “The demand for gold will increase the financing of parallel markets with monetary blocks, because transactions in this market are mostly outside official activities.”

In Iraq, the market is witnessing an increase in the prices of gold in its various categories, as the price of selling a gold weight known as “Gulf gold”, 21 karat, which is prevalent in the local market, ranges between 400 thousand dinars and 410 thousand, and the selling price of an Iraqi gold weight ranges between 370 thousand And 380 thousand dinars. (1320 dinars for one dollar), and one weight of gold is equal to five grams, and the price of an ounce of gold (201 grams) is 1931 dollars.

The Iraqi market also witnessed purchases of gold with the aim of saving, despite the high prices, due to the loss of confidence in monetary currencies on the one hand, and the poor performance of investment banking for the saved funds on the other hand.

Monopoly

Economic researcher Nabil Jabbar Al-Tamimi considered that buying gold in Iraq is one of the issues of safe and profitable savings at the same time, despite the high prices, stressing that gold prices rose in two years from $1,300 to $2,000 per ounce.

Al-Tamimi added that, in light of the limited investment opportunities in Iraq, the weakness of the banking system, and the loss of confidence in it, the Iraqis find that buying and storing gold is a kind of saving, indicating that most gold savers are those who have not much money, because it is not possible to buy real estate or fixed and profitable assets.

For his part, Ammar Al-Azzawi, a gold dealer in Baghdad, said that people’s interest in buying gold continues despite the high prices, and there is a moral and material value of gold that makes it a means of saving and preserving money from loss and loss of value.

Al-Azzawi stressed, “There are large merchants and companies in Iraq that control the market, and have a role in people’s desire to buy, especially in times of crisis, as any crisis that occurs, whether it is the rise or fall of the dollar, or market fluctuations and inflation, is exploited through propaganda campaigns or Spreading rumors that gold will rise in the future, which prompts people to buy collectively

Economic researcher Abd al-Salam Hassan said that there are cheating processes for gold sold through molten gold before placing it in the design moulds, indicating that the cheating process in the material is difficult to detect except through experienced goldsmiths or experts in gold.

And about the interest of savers to buy gold, Hassan indicated that the lack of confidence of individuals in the financial system followed by Iraqi banks and the lack of security are among the most important reasons that drive saving it as a stable means.   Source: “The New Arab”   LINK

Dollar Exchange Rates In The Iraqi Market

Economy  2023-07-29 | 12,542 views   Alsumaria News – Economy  Alsumaria News publishes, today, Saturday, July 29, 2023, the exchange rates of the dollar in the Iraqi local markets.  

Baghdad   153,100     Basra  153,150      Erbil  153,300 

Economists expected the continuation of the dollar crisis. This also comes after Washington imposed sanctions on 14 Iraqi banks, in a crackdown on Iran’s dealings in dollars.

The Iraqi parliament moved to address the crisis, and the Finance Committee hosted the Governor of the Central Bank, Ali Al-Alaq, toalso discuss the bank’s measures to stabilize currency prices.

Almost since the beginning of this year, the Central Bank of Iraq  launched a working mechanism in an electronic platform and the international financial transfer system “SWIFT”, but this did not help the dollar exchange rates to stabilize in Iraq, despite the attempts of the government and the central bank to control the exchange rate in the parallel (black) markets. ). LINK

Basra Oil Achieves Unprecedented Weekly Gains Due To The Scarcity Of Supply

Information / Baghdad..    Basra crude achieved significant gains due to the scarcity of supply after Saudi Arabia and OPEC countries cut supplies.

Basra Heavy crude closed in its last session on Friday, at an increase of 54 cents, to reach 81.79 dollars, and recorded a weekly gain of 3.75 dollars, equivalent to 4.81%.

While Basra Intermediate crude closed in its last session, also at an increase of 54 cents, to reach 84.84 dollars, and also recorded weekly gains of 3.15 dollars, or the equivalent of 3.85%.

As for Brent crude, it closed in its last session of Friday, up by 75 cents, to reach $84.99, and recorded a weekly gain of $3.92, or 4.84%.

West Texas Intermediate (WTI) crude closed in its last session on Friday, also up by 49 cents, to reach $80.58 a barrel, and recorded a weekly gain of $3.51, or 4.55%. Ended25   LINK

Iraq Increases The Quantities Of Oil Subsidized To Jordan From The Kirkuk Fields

Economy ,  07/29/2023 10:23 , Number of readings: 141   Baghdad-Iraq today:  The Iraqi government agreed to increase the volume of crude oil exports transported by trucks to neighboring Jordan.

And the MEES website, which analyzes data related to oil and gas in the Middle East, quoted Jordanian Prime Minister Bishr Al-Khasawneh as saying, “Baghdad agreed to increase exports of Kirkuk crude transported by trucks to Jordan, from 10,000 barrels per day to 15,000 barrels.”

 The Jordanian Prime Minister, Bishr Al-Khasawneh, paid an official visit to the capital, Baghdad, on July 24, during which he met with the Iraqi Prime Minister, Muhammad Shia’a Al-Sudani, and other state officials, and discussed with them joint cooperation and trade exchange.

The site mentioned that Iraq’s exports of 70,000 barrels per day, via trucks to the Jordanian Zarqa Refinery, were temporarily stopped last April after the end of the supply agreement between the two countries, despite the approval of the Iraqi Council of Ministers to renew it in late March 2023.