Iraq News Highlights from BondLady’s Corner
Specialists warn of the repercussions of the devaluation of the dinar
Tuesday, June 30, 2020 Baghdad / Hussein Thagab Mustafa Al Hashemi
At a time when reports have spoken that the government is considering reducing the value of the dinar against foreign currencies, as measures to confront the financial crisis caused by the decline in oil prices and the repercussions of (corona), a group of specialists in economic affairs confirmed that the reduction of the dinar price against the dollar is not based on objective grounds and cannot Its approval of the resulting damage to the Iraqi economy, the purchasing power of the citizenry, the strength of Iraqi bonds abroad and the country’s credit rating.
The economist reported Dr. Fadel Muhammad Jawad said that “the central bank has a direct relationship to the issue, as it is the financial and monetary adviser to the government, and therefore cannot be excluded from the process.”
He added that “the Iraqi-Jordanian Business Council (the owner of the proposal to reduce the value of the Iraqi dinar) – according to Jawad – will not be affected by the decline as it is affected by the citizen who lives inside Iraq, as he bears the results more than he who lives outside and deals in dollars and foreign currencies, not in the Iraqi dinar.”
Jawad called “the central bank and Iraqi economists inside the country to clarify their opinion on this sensitive issue that concerns the country and the citizen.”
For his part, the economic advisor to the Speaker of Parliament, Dr. Hammam Al-Shamaa, “The advocates of reducing the dinar’s exchange rate are not unaware of its inflationary effects, and the resulting social tensions will deepen the misallocation of income.” From selling foreign currencies when the exchange rate is lowered. ”
“They promise the government to increase an additional 60 billion dinars, and a total of 18 trillion dinars annually if the proposal is implemented, but they have forgotten that the cost of establishing a robust and strong social protection network for five million Iraqis without the poverty line, compensating 73 percent of retirees whose monthly income is less than 500 thousand dinars,
and compensation for a million and a half million employees whose monthly income is less than 500 thousand dinars, will generate huge numbers of those who receive support because of this procedure, and whose value may reach the value of the amounts deposited due to the reduction.
He noted that “the social protection network will be an ongoing case, as in the ration card program, which has been 32 years old, and nobody dares to cancel it until now.”
Al-Shamaa stated that “the advocates of the reduction forgot the experience of printing and converting paper into a currency in the 1990s and how this printing weakened the purchasing power of the middle class, which turned into destitute had it not been for the adoption of the ration card program at the time”,
pointing out that “reducing the dinar exchange rate is a process Quite similar to the printing of banknotes, in the end it means that the government wastes part of the purchasing power of people with fixed income and is ultimately an innovative way to deduct a portion of the employees ’salaries by 60 billion dinars per day, initially, as price relations soon create an upward inflation that falls on the poor.” .
Al-Shamaa felt that “the advocates of the reduction are the beneficiaries to promote their local products, whether agricultural or industrial, and this is legitimate and we call for administrative and customs measures to reduce competition from the local product and not by reducing the exchange rate of the dinar.”
He pointed out that “the monetary policy drawn up and implemented by the central bank, whether in Iraq or in any country in the world is a policy independent of the will of the executive authority, without this implying the absence of coordination between the fiscal and monetary policies.”
And that “the exchange policy and its system is one of the most important pillars of monetary policy, and therefore the statement that the central has nothing to do with the exchange system indicates the lack of awareness of economic facts, just as saying that money is government money is a fallacy because the government and the monetary authority and the legislative and judicial authority are the components of the state Whose cornerstone is the people. ”
For his part, the economic researcher d. Ahmed Al-Husseini said, “It is not appropriate now to carry out a currency devaluation, especially since thinking about this measure coincides with the state of the global economic recession and the recession in the local economy.”
He explained that “devaluation of the currency in order to finance the fiscal deficit in the budget will have unforeseeable economic effects, especially the rise in the general level of prices due to increased inflation,” noting that “the economy currently cannot tolerate such effects, as well as the effects of economic dumping on the market With goods that may be of poor quality due to the lack of a customs deterrent that might prevent this from being achieved, stressing, “The devaluation should not be the first line of confrontation for the financial crisis caused by the drop in oil prices and the effects of (corona).”
Al-Hakim forms a parliamentary bloc to support Al-Kazemi
Political| 04:25 – 06/30/2020 Baghdad – Mawazine News, an Iraqi political source revealed, on Tuesday, the formation of the leader of the wisdom movement in Iraq, Ammar al-Hakim, a parliamentary bloc to support the new Iraqi Prime Minister, Mustafa al-Kazemi.
The source said, according to Russia today, that “Al-Hakim will announce the bloc later in the day,” noting that “his goals are to support the state, its prestige, its sovereignty and the enforcement of laws.”
He added that “the second goal is to achieve a parliamentary balance against other blocs (marching – conquest – Sunnah – Kurds).”
The dollar stabilizes against the Iraqi dinar
Economie| 10:14 – 30/06/2020 Baghdad – Mawazine News The dollar exchange rate stabilized on the Al-Kifah Stock Exchange and local markets, Tuesday, (30 June 2020).
The prices of the Kifah Stock Exchange – Baghdad recorded 123.100 dinars per 100 dollars.
Buying and selling prices in banking shops:
The selling price of the dollar = 123,500 dinars per 100 dollars.
The purchase price of the dollar = 122,500 dinars per 100 dollars. End 29
Association of Private Banks: the central bank reduced interest on small and medium loans from 6.3% to 4%
Ali Tariq – Executive Director of the Iraqi Private Banking Association. “Economy News”
Banks Economy News – Baghdad The Association of Iraqi Private Banks announced, on Tuesday, the Iraqi Central Bank reduced the interest rate on loans within the initiative of the Central Bank of Iraq from 6.3% to 4% to accelerate the pace of recovery of the Iraqi economy after being affected by the Corona pandemic.
The Executive Director of the Association of Iraqi Private Banks, Ali Tariq, said in a statement received by “Al-Iqtisad News”, that “the economic activity of Iraq witnessed a decline during the past days due to the direct impact of the Corona pandemic on the global economy and the drop in oil prices, which reduced Iraq’s revenues during the last period, so The Central Bank of Iraq decided to reduce the interest rate on its initiative to support micro, small, medium and large projects in support of the national economy.
Tariq pointed out that “the Central Bank of Iraq decided to cut interest on loans that end at 20 million from 4.8% to 3.5%, while loans that start from 21 million dinars to one billion dinars, interest will be 4% after it was 6.3%.”
Masroor Barzani: We will continue discussions with Baghdad and we will not give up our constitutional rights
Tuesday 30, June 2020 15:14 | PoliticalViews: Sulaymaniyah / Nina / The president of the Kurdistan Regional Government, Masroor Barzani, confirmed that the region will continue discussions with Baghdad to reach an agreement that guarantees its constitutional entitlements, stressing that the Kurdistan Region will not waive its legitimate rights.
Barzani’s office said in a statement that Masroor Barzani met today, Tuesday, with the delegation of talks with the federal government, through a closed-circuit television system / video conference /, noting that the Deputy Prime Minister Qubad Talabani, at the beginning of the meeting, shed light on the visit made by The Kurdistan Region delegation to Baghdad last week, the results of discussions with the federal government and the proposals put forward to resolve outstanding problems between the two sides.
The central bank cuts loan interest to support the economic and productive sectors
Economie| 30/06/2020 Baghdad – Mawazine News The Iraqi Central Bank announced, on Tuesday, the reduction of loan interest to support the economic and productive sectors.
The bank’s media stated in a statement that Mawazine News received a copy of it, “With the continued economic repercussions caused by the Corona pandemic and the restrictions it imposed on economic activity in most of the productive and service sectors and the decline in oil revenues, the Central Bank of Iraq decided to enhance the liquidity of the“ existing projects ” Which was funded from the initiative (one trillion) in the amount of (5) million dinars for those wishing to do so, with the guarantees of the same project in exchange for administrative commissions and without interest.
An expert warns of the collapse of the Iraqi economy if the government ignores the 2020 budget
30/06/20200 The information / Baghdad ..Economist Wissam Al-Tamimi warned, on Tuesday, of the collapse of the Iraqi economy with the government continuing to ignore the issue of the budget, pointing out that a lot of money may be misplaced and unprecedented corruption may occur.
Al-Tamimi told “Information” that “Parliament obligated the government to send the 2020 budget, even for the remaining months of this year in conjunction with the vote on the borrowing law.”
He added that ” Iraq may witness the largest corruption and theft in its history in the event that it did not approve a budget for the current year, as borrowing money may be used incorrectly and go to the pockets of the corrupt”, noting that “the statements of Kurdistan employees that were sent to Baghdad need to be investigated and audited through control teams Honest sent to the region to check in the field with the names mentioned in the lists, where there can be fraud in those names and thefts to balance the country.
Al-Tamimi warned of “the collapse of the Iraqi economy in the event that parliament’s decisions regarding the budget and theft of internal and external loans are ignored, and therefore Iraq will be burdened with debt at a time when it is still suffering from a stifling financial crisis.” 25 n ended