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4 Reasons Preventing Iraq From Fully Floating Its Currency … Get to know them
The decision to reduce the value of the Iraqi dinar against the dollar raised concerns that this paves to float full local currency The dollar exchange rate was 1470 dinars to the public and 1460 dinars for banks, compared with 1182 dinars before the reduction (Reuters)
5/4/2021 The Central Bank’s decision to reduce the value of the Iraqi dinar against the dollar by 24% with the end of 2020 with a better management of payments and for the economic crisis of the country, to raise fears that this paves to float the whole local currency.
The dollar’s exchange rate was 1470 dinars to the public and 1460 dinars for banks operating in the country, compared to 1182 dinars before reducing.
The Iraqi economy suffers from a contraction of 11% in 2020, exacerbating the economic weaknesses for a long time, according to the International Monetary Fund in a recent report.
Iraq is 92% of its income on oil revenues; The last time the dinar was reduced in December 2015 when the dollar was raised to 1182 dinars for 1166 dinars in the past.
As the economic difficulties witnessed by the world as a result of Corona pandemic and the emergence of new strains, some believe that the use of Iraq to floats is an acceptable option.
The floating policy is not a real benefit in the economy of Iraq, which is a legitimate economy, depends on oil revenues significantly, says Economic expert Manar al-Obeidi.
Diversification of the economy
Obeidi points out that the full float policy requires diversification of the economy to create a state of balance in supply and demand, this is difficult in Iraq for only one player in this equation, the Central Bank of Iraq.
He confirmed that the reduction of the dinar had recently led to the high level of inflation to 4%, due to reflection of exchange rate differences and imports costs, on the final consumer.
The annual inflation rate in December 2020, rose 3.2% on an annual basis, affected by changing the dollar exchange rate.
Obeidi predicted the continued rise of consumer prices for subsequent months and believes that “the future of the dinar is expected to maintain its price within the 1500 limits for more than a year, and if the economic situation is improved, it is possible to raise the value of the dinar.”
In turn, Industrial Development and Investment Consultant Amer Jawahirah ruled up a full float until 2022, because of its political and social repercussions that are difficult for Iraq’s economic and political reality.
Jeweler added that the full float would have negative implications for the purchasing power of the Iraqi consumer, especially middle and poor groups.
Once if the country has resorted to floating, Jeweler sees it once again, and not hot, especially that the central bank is giving foreign currencies for those wishing, and therefore is the only one who is able to maintain the value of the dinar.
In February, Iraqi Central Bank reserves from foreign currency exceeded $55 billion, according to him.
The reality of financial and administrative corruption is the difficulty of applying full floating and achieving its objectives, leading to failure and even further deepening the crisis for the economic scene.
The force of law
The economic expert Osama Al-Tamimi believes that floating is supposed to stimulate GDP and reduce reliance on import, “but corrupt will face this mechanism to raise domestic commodity prices.”
He pointed out that it is difficult to trend to a comprehensive float, for what he needs from a state that has the force of law, “This is not now available.”
He stressed that the currency reduction was enabled by the government to overcome a major crisis that could have been exposed to Iraq and was able to provide salaries, and manage state matters, and scaled smuggled funds abroad, where the dinar became a weak economic margin of smugglers. LINK
Alia Nassif: The Government Should Cancel Most Of The Foreign Loans Due To The High Oil Prices And The Possibility Of Filling More Than Half Of The Budget Deficit
Thursday 22, April 2021 10:46 | Political Views: 370 Baghdad / NINA / Representative Alia Nassif affirmed that the government should cancel most of the foreign loans, including the Indian Export and Import Bank
loan and the Swedish loan, indicating that the continued rise in oil prices until the end of next month will contribute to filling more than half of the deficit in the budget.
She said in a statement received by the Iraqi National News Agency / NINA / a copy of it, today: “The continuous rise in the price of oil has eliminated the need to keep the country bound by foreign loans that entail high interest that deplete the Iraqi economy, and in the event that the oil price continues to rise until the end of the month Next, we will have compensated for half of the deficit in the financial budget. ”
Nassif indicated: “The government today has an opportunity to cancel ninety percent of these loans, particularly those with high interest rates, especially the Indian Import and Export Bank loan and the Swedish loan.” https://ninanews.com/Website/News/Details?Key=900464
Oil Prices Continue To Decline For The Third Day
Thursday 22, April 2021 11:21 | Economical Views: 268 Baghdad / NINA / Oil prices fell for a third day, today, Thursday, after data showed an increase in US inventories and investor concern about an unequal recovery in global demand.
Brent crude for June settlement fell 0.35 percent to $ 65.09 on the ICE Futures Exchange, and US crude fell 0.39 percent to $ 61.08.
The US figures showed a surprise addition of 594,000 barrels to inventories nationwide, and gasoline products rose to 8.93 million barrels per day.
As vaccination campaigns spur greater activity and increased mobility in the United States and parts of Europe, the epidemic is tightening its grip elsewhere.
On Wednesday, India recorded a record 2023 Covid-19 deaths, and an unprecedented 295,041 new cases, the dramatic boom has forced the country’s financial and political capitals – Mumbai and New Delhi – to impose movement restrictions.
Even as India faces a crisis, other countries are making plans to open up to potentially boost oil demand. Among them, France will lift restrictions on regional movement and reopen schools in the coming weeks, and Greece will ease most of the closures in May before reopening it to tourism.
Based on increased demand, the OPEC + alliance plans to ease deep supply restrictions from May to July. Despite these additional barrels, there is still a drop in global inventories, which supports prices. / End 7 https://ninanews.com/Website/News/Details?key=900468
Indicators Of Stock Trading In The Iraq Stock Exchange During The First Quarter Of 2021
Economie| 10:55 – 22/04/2021 Baghdad – Mawazine News The Iraq Stock Exchange announced, on Thursday, the trading indicators during the first quarter of 2021, stressing that the stock trading indicators were positive.
A statement of the Iraq Stock Exchange, which Mawazine News received / a copy of, stated that “the indicators for trading the shares of joint stock companies, based on Law No. 74 of 2004 and the instructions and rules of the Securities Commission issued pursuant to it and based on the instructions and rules for electronic trading and central depository of the Iraq Stock Exchange systems during The first quarter of 2021 (56) trading session for the shares of joint-stock companies will last from Sunday to Thursday of every week.
“The market did not organize trading sessions on Sundays 21/2, 28/2, 7/3, 3/14 and 3/21/2021, as it falls within the period of a comprehensive curfew based on the decisions of the National Safety Committee,” the statement continued.
Among the most important indicators of the first quarter of 2021 in the trading of shares of joint-stock companies:
- Organizing and monitoring trading in 56 trading sessions during the first quarter of 2021. The sessions were not organized on official holidays and days of the general curfew. Starting from 9:30 a.m. to 12:30 p.m. according to the securities trading instructions.
- Trading is limited to the shares of Iraqi joint-stock companies because no new financial instruments are offered by joint stock companies or government institutions.
- The number of companies listed in the Iraq Stock Exchange is (103) joint-stock companies.
- The number of companies whose shares were traded during the first quarter reached (67) joint-stock companies.
Because there are (19) joint stock companies suspended from trading for failure to submit the annual disclosure by a decision of the Securities Commission and until they submit the required disclosure.
- The number of shares traded by investors and shareholders reached (133) billion shares.
- The value of shares traded to investors reached (84) billion dinars.
- The ISX60 stock price index
– the market index closed at (508) points in the last session of 2020
– and closed in the last session of January 2021 at (484) points.
– The index closed in the last session of March 2021 at 566 points.
Thus, the index achieved an increase of 11% compared to the close of 2020 and a rise of 17% compared to the close of January 2021.
- Foreign trade during the first quarter of 2021,
the total number of shares traded to foreigners reached 35% of the total number of shares traded for the market. And it reached 34% of the market value of shares. During the first quarter of 2021. It was as follows:
- The number of shares purchased from foreigners reached 29 billion shares, worth 18 billion dinars, through the implementation of 2232 purchase deals on 58 joint-stock companies
- The number of shares sold from the side reached 17 billion shares, worth 10 billion dinars, through the implementation of 994 sales transactions on 49 joint stock companies.
The stock trading indicators in the first quarter of 2021 were positive for many reasons, the most important of which are
- The Securities Commission’s decision to amend Article (1) of the Joint Stock Companies Disclosure Instructions No. (Cool to become as follows: “Every company listed on the Iraq Stock Exchange must provide the Commission with the report. Annual, within a period not exceeding (150) days after the end of its fiscal year and publishing it in the available media
- Submission of 13 joint-stock companies financial statements as on December 31, 2020
- The effect of changing the exchange rate of foreign currencies against the Iraqi dinar stimulating the purchase order on shares, being One of the sources of investment and also because it is a store of value.
- The continuation of the market’s activity and its procedures in regulating trading, the depository center’s procedures, and the activity of the Securities Commission in actively following up on joint-stock companies and disclosing their financial position. https://www.mawazin.net/Details.aspx?jimare=150594
Representative Solutions To Delayed Projects Referred To Corruption Deals
Political| 04:36 – 04/22/2021 Baghdad – Mawazine News The Parliamentary Economic and Investment Committee proposed, on Tuesday, solutions for spinning projects that were referred with corruption deals, while an invitation was directed to the Ministry of Finance.
A member of the committee, Ali Saadoun Al-Lami, said, “There are some stalled projects that have been referred with corruption deals to impeccable companies that have worked to receive the operational advance of the project without reaching an advanced stage of completion,” noting that these projects were referred to parties where favoritism entered into illegal ways and stopped due to corruption. Despite their importance as referral strategic projects for hospitals and others. ”
He pointed out that“ the Economic and Investment Committee proposed several solutions for these projects, including terminating the contract with lagging companies, holding them accountable, and setting up a mechanism for assigning projects while ensuring their completion at specific times. ”
He pointed out that “the Ministry of Finance is obligated to release the amounts of suspended projects due to liquidity, in accordance with the Federal Budget Law for the fiscal year 2021, especially since some of them provide public service.” https://www.mawazin.net/Details.aspx?jimare=150658
Tender For Processing Paper Currency Parcel Tapes
April 20, 2021 Tender numbered (01/2021) for equipping the Central Bank of Iraq with paper currency parcels
The Central Bank of Iraq invites officially licensed companies and offices with experience and competence and who are qualified to participate in a tender to equip it with (2500) reel of strips of paper currency parcels according to the technical specifications and legal conditions prepared by this bank.
The Central Bank of Iraq / located in Baghdad – Al Rasheed Street – Building No. (2) Floor (3) Legal Department / Contracts Department for the purpose of obtaining tender documents for an amount of (100,000) dinars (one hundred thousand dinars) non-refundable and the tender closing date will be before The end of the official working hours on Monday 5/24/2021. https://cbi.iq/news/view/1705Tags: bondlady’s, corner /