BondLady’s Corner

  In Bondlady’s Corner 

Iraqi News Saturday AM 12-19-20

TLM724 Administrator BondLady’s Corner

The Central Bank Is Discussing With Two Parliamentary Committees To Balance The Exchange Rate

Saturday 19 December 2020    58  Baghdad: Mustafa Al-Hashemi   The rise in the price of the dollar against the dinar, and its causes, is still the talk of specialists in financial and economic affairs, at a time when the exchange rate exceeded 133 thousand and 500 dinars per hundred dollars in all governorates, despite the discussion of the financial, economics and investment affairs committees with the Central Bank, in two separate meetings, the reasons for that. . The Parliamentary Economic and Investment Affairs Committee held a joint meeting with the Governor of the Central Bank, Mustafa Ghaleb Makhaif, and the bank’s management official, to discuss the crisis of the high exchange rate of the dollar in the local market and the daily currency auction.

The Parliamentary Finance Committee also held a new joint meeting with the central bank governor to discuss the implications of the high exchange rate of hard currency in the local market, after a previous meeting of the governor with members of the Parliamentary Economic and Investment Affairs Committee.

Kheikh revealed the readiness to launch a package of measures that will achieve a balance in the exchange rate in 2021, such as launching a 3 trillion initiative to support low-income people, doubling the hard currency supply in the market, and increasing interest rates on the local currency deposited in banks.

The committee discussed ways to confront the negative repercussions of increasing the exchange rate on citizens, especially the poor classes, as well as the measures that the Central Bank will follow towards banking companies to deter the weak from exploiting this situation.

Earlier, the governor of the Central Bank conducted a field visit that included a number of companies mediating the sale and purchase of foreign currencies on the Karkh and Rusafa sides in Baghdad, accompanied by a committee specialized in auditing companies from the Banking Control Department at the Central Bank.

According to a statement by the central bank, “the governor was briefed on the workflow of these companies and their dealings with the beneficiaries of the citizens. He also listened to the comments and suggestions of the owners of the companies and promised to study them by the bank and activate their outputs, which will positively affect the work of the Iraqi financial and economic sector.”

The statement indicated that this visit comes from his keenness to directly see the actual reality of the work of these companies in order to develop the services provided by them.

The specialist in economic affairs, Adnan Al-Fattal, believes that there is a case of speculation on the dollar by a group of people who have hoarded Iraqi money, who buy large quantities of dollars in exchange for the central bank preserving the amount of pumping the dollar into the market without increasing it.

Al-Fattal added in an interview with “Al-Sabah” that “It is known that the Central Bank has set an official price for selling the dollar at 1190 dinars per dollar, while the owners of banking shops and speculators make huge profits from the difference in the price sold in the market of 133 thousand and 500 dinars per hundred dollars. , Which has been on the rise for days.

In turn, economic researcher Lubna Al-Shammari called on the Central Bank to coordinate with Economic Security to monitor the offender in the event of selling the dollar at the current price that confused the markets and commercial dealings in them.

Al-Shammari added to “Al-Sabah” that “the banks participating in the window of selling the currency bear part of the responsibility because the Central Bank sells dollars at a fixed exchange rate, and that buyers of hard currency from it and speculators bear the bulk of the cause of this crazy rise.”

She emphasized that “this increase is temporary and the exchange rate will return to its normal rates or close to it after the end of the Christmas and New Year period, because this rise is not new for Iraq as it is affected by rumors, false news and the current conditions in the country.”   LINK

TLM724:   Not sure I am buying this devaluation. As far as I can tell it has been all speculation, rumors and leaked documents which does not necessarily make it so. I’d like to see it officially on the CBI first

Urgent A Source For The Euphrates News: The Central Bank Sets A New Price For The Dollar, Starting From Sunday

It is noteworthy that the Central Bank of Iraq is currently selling dollars for 1190 dinars.

Time: 12/18/2020 11:00:49  Read: 17,082 times   {Baghdad: Al Furat News} A private source revealed that the Central Bank of Iraq will soon set a new price for the dollar exchange in Iraq.

The source told {Al-Furat News} that “the central bank, starting next Sunday, will adopt a new price for the dollar at a value of 1450 dinars for one dollar {ie 145 thousand dinars for one hundred dollars}”.

It is noteworthy that the Central Bank of Iraq is currently selling dollars for 1190 dinars.

The Parliamentary Finance Committee hosted, yesterday, the Governor of the Central Bank, Mustafa Ghaleb, to discuss the economic crisis and the implications of the high exchange rate of hard currency on the Iraqi market situation.

The central bank governor explained to the committee, according to a statement that “the bank is preparing to launch a package of measures that will achieve a comfortable balance in the exchange rate for the year 2021, including launching an initiative in the amount of 3 trillion to support low-income people, doubling the provision of hard currency in the market, and increasing interest rates on the Iraqi currency deposited in Banks. ”

According to the leaked draft of the federal budget law for 2021, it included fixing the exchange rate of the dollar against the Iraqi dinar on the basis of {1450} and a deficit that exceeded 58 trillion Iraqi dinars. The estimated revenues from exporting crude oil were also calculated on the basis of the price of 42 dollars per barrel, and the rate of exporting 3 million And 250 thousand barrels per day, including 250 thousand barrels exported from the Kurdistan region.

The former Undersecretary of the Ministry of Finance, Fadel Nabi, attributed the decline in the value of the Iraqi currency against the dollar to banks and currency dealers who are working to raise the price of the dollar in order to achieve profits.

The leakage of the draft budget to the media and social networking sites caused widespread controversy and turmoil in the foreign currency market in Baghdad, as the exchange rate of the dollar rose in the local market in a frenzy and exceeded 1340 dinars before it fell to 132 thousand dinars after government and parliamentary assurances that the draft is not final and subject to modification.  LINK

MP Saadawi: The Central Bank Will Raise The Price Of The Dollar To 145 Thousand Dinars, Starting From Sunday

Thursday 17, December 2020 22:49 | Economical Views: 877   Baghdad / NINA / Member of the Parliamentary Finance Committee, Abdul Hadi Al-Saadawi, announced that the Central Bank will raise the price of the dollar to 145 thousand dinars, starting from Sunday.

Al-Saadawi said in a televised statement followed by / Nina /: “The policy of the Central Bank to raise the dollar against the dinar is old,” indicating: “The raising of the dollar was implemented before the decision was announced,” pointing out: “The leakage of the draft budget confused the Iraqi market and street.”

He asserted, “There is confusion with the financial policy drawn up by the government,” noting that: “We do not have control over the window for selling the currency, and the increase in the dollar will be matched by an increase in the prices of commodities and goods.” / End   https://ninanews.com/Website/News/Details?key=876925

TOBYBOY:  This is not the way to correct solution, they need to go the opposite way reduce the price of dinar. The corrupt need to be put in jail as well as the Banks involved in the corruption. They know who exactly is involve and what politicians are doing the corruption. They talk all the time but never follow through on the corruption. The Prime Minister also talks but does not follow through on the arrest of these politicians. As I have stating we see another 10 years or more same old same old I don’t believe they have any intension of RV the dinar just keep stringing every on on year after year too much corruption in the country of Iraq.

TLM724:    You are so right about the corruption Toby but I am still not sure about the dinar devaluation. It is all about supply & demand and more importantly the purchasing power for the people so we wait to see which direction it goes. Until then be calm and stay in it to win it

Parliament: The Central Bank will take action on the exchange rate

Saturday 19 December 2020   171  Baghdad: Hoda Al-Azzawi  A member of the Finance Committee, Representative Ahmed Al-Saffar, told Al-Sabah: “The leaked budget project is unofficial, and no one knows who is behind its leakage, what is the purpose of its diversion, and what is meant by the diversion,” pointing out that “the leakage of the budget has an impact on Market position In the psyche of the citizen ».

Al-Saffar added that “the Financial Committee met with the Governor of the Central Bank, and that there are some measures that the bank will take.”  In this regard”.   LINK

Parliament Discusses With The Central Balance Of The Exchange Rate

Saturday 19 December 2020   211 B Baghdad: Mustafa Al-Hashemi  The rise in the price of the dollar against the dinar, and its causes, is still the talk of specialists in financial and economic affairs, at a time when the exchange rate exceeded 133 thousand and 500 dinars per hundred dollars in all governorates, despite the discussion of the financial, economics and investment affairs committees with the Central Bank, in two separate meetings, the reasons for that. .

The Parliamentary Economic and Investment Affairs Committee held a joint meeting with the Governor of the Central Bank, Mustafa Ghaleb Makhaif, and the bank’s management official, to discuss the crisis of the rise in the dollar’s exchange rate in the local market and the daily currency auction.

The Parliamentary Finance Committee also held a new joint meeting with the central bank governor to discuss the implications of the high exchange rate of hard currency in the local market, after a previous meeting of the governor with members of the Parliamentary Economic and Investment Affairs Committee.

Khayef revealed the readiness to launch a package of measures that will achieve a balance in the exchange rate in the year 2021, such as launching an initiative worth 3 trillion dinars to support low-income people, doubling the availability of hard currency in the market, and increasing interest rates on the local currency deposited in banks.

The committee discussed ways to confront the negative repercussions of increasing the exchange rate on citizens, especially the poor classes, as well as the measures that the Central Bank will follow towards banking companies to deter the weak from exploiting this situation.

The specialist in economic affairs, Adnan Al-Fattal, believes that there is a case of speculation on the dollar by a group of people who have hoarded Iraqi money, with which they buy large quantities of dollars in return, as the central bank maintained the amount of pumping the dollar into the market without increasing it.

Al-Fattal added in an interview with Al-Sabah that “It is known that the Central Bank has set an official price for selling the dollar at 1190 dinars per dollar, while the owners of banking shops and speculators make huge profits from the difference in the price sold in the market of 133 thousand and 500 dinars per hundred dollars , Which has been on the rise for days. ”    LINK

The Rise In The Exchange Rates Of The Dollar In The Iraqi Market

Pratha News Agency113 2020-12-19   The exchange rates of the dollar increased in the main stock markets and local markets, today, Saturday (19 December 2020)

The Kifah Stock Exchange recorded 135,250 dinars against 100 US dollars, while the exchange rates for last Thursday in the Kifah Stock Exchange were 130,000 dinars per 100 dollars.

As for the exchange rate on the local market, it also rose where it was

Selling price: 136,250 dinars per $ 100.   Purchase price: 134,250 dinars per $ 100.

http://burathanews.com/arabic/economic/382735

After The Minister Of Finance Spoke … The Dollar’s Price Rose To 1,400 Dinars

Time: 12/19/2020 16:52:32 Read: 3,328 times  {Baghdad: Al Furat News} The exchange rate markets recorded 1400 dinars per dollar, after the Minister of Finance’s statements regarding the government’s approach, with the knowledge of Parliament, towards raising the dollar exchange rate to 1450    LINK

Al-Muhammadawi: The Central Bank Has Failed To Stop The Deterioration Of The Currency Exchange

Time: 12/19/2020 15:27:27  Read: 1,274 times   (Baghdad: Al-Furat News) The representative of the National Approach bloc, Jamal Al-Muhammadawi, confirmed, on Saturday, that the Central Bank had failed to stop the deterioration of the currency exchange, while he called for accountability of the bank because of “this confusion.”

“We strongly criticize the central bank’s approach to managing the monetary policy of the country, which caused a sharp decline in the value of the Iraqi currency’s exchange rate against foreign currencies, and left a profound impact on the citizens’ livelihood, “al-Muhammadawi said.

He added that “the central bank deviated from its objectives set for it in Law No. (56) of 2004, and failed to stop the deterioration of the Iraqi currency exchange against the dollar and a cradle for parasites and corrupt persons by acquiring hundreds of billions of dinars of illegal profits.”

He continued, “The Central Bank of Iraq has failed to achieve development, fight poverty and the deviation of a fair distribution of resources, because it did not deal seriously in benefiting from the monetary mass that is supposed to go to investment in real production and not rapid speculation for profit only.”

Al-Muhammadawi pointed out that “one of the duties of the central bank is to preserve the purchasing power of the dinar and the stability of the citizen’s cash income and to manage the monetary and economic crises such as the phenomenon of hyperinflation, which will be a natural result of the failure of the central bank and the change of the exchange rate.”

He stressed that “the central bank must strive under the current circumstances to maintain the stability of the exchange rate of the Iraqi dinar or the external value of the dinar and maintain the stability and integrity of the internal value of the currency and control of inflation and lower annual price growth rates, and this is reflected in the evaluation of administrative prices and price support for the commodity paragraphs that occur.” Within the overall financial objectives of the bank. “  LINK

Text Of The Minister Of Finance’s Speech Regarding The Price Of The Dollar And The Suspension Of Appointments {Extended}

Time: 12/19/2020 16:02:41  Read: 10,920 times   {Baghdad: Al Furat News} The Minister of Finance, Ali Abdul Amir Allawi, announced, on Saturday, that the exchange rate of the dollar had been raised to 1450 dinars to the dollar, while he confirmed the suspension of appointments.

Allawi said during his meeting with a number of press institutions, “We will issue a statement to raise the exchange rate of the dollar to 1450 dinars to one dollar. We will also stop appointments and there is an exception for those that took place at the end of last year and beginning of 2020.”

He added, “We have reached an agreement with Kurdistan on the 2021 budget, and the current delegation is discussing its allocations for the year 2020,” denying “categorically the leakage of the draft budget from the Ministry of Finance.”

Allawi pointed out that “the 2021 reform budget, and no one can deny that, and I do not know if the street was in anger, but I touched the responsibility to reduce everyone.” Suspect

He pointed out that “the impact will be on the users of imported goods only, and that there is a great exaggeration in dealing with these changes,” stressing that “the budget is reform and not austere, and the change of the economic axis will be through this budget.”

Allawi added, “The price of the dollar set at 1450 dinars will be approved for sale by the Ministry of Finance to the Central Bank, and the margin that the Central Bank will add will not be large and may reach 1490 dinars to one dollar.”

He also stressed that the government had received the support of all major countries, the International Monetary Fund and the World Bank, for the reform paper, indicating that the budget was the beginning of reform, and there would be other steps in the future to implement the white paper, and it might reach parliament within a week.

Allawi noted, “There are resources allocated to the Ministry of Health and the Ministry of Labor and Social Affairs that have not been compromised,” adding, “We want to restore confidence in the saved dinar and re-strengthen government banks by providing new digital financial services.”

He continued, “Reducing the allowances was measured in proportions, and I was ready to be questioned, and I was hosted more than once,” adding, “We have a large slack in higher diplomas more than any country, and the Ministry of Higher Education has very high allocations, and it is necessary to review it.”

Allawi revealed, “directing government banks to increase interest rates, and that the government and the central bank will work to stabilize the new rate,” adding, “The Iraqi economy will increase in effectiveness with the entry into force of economic reforms.”  The Finance Minister concluded, “Modifying the exchange rate is a political decision of the Iraqi leadership.    LINK

Allawi: The Economy Of Iraq Will Increase Its Effectiveness After The Change In The Price Of The Dollar

Minister of Finance Ali Abdul Amir Allawi   Money  and business  Economy News – Baghdad  The Minister of Finance, Ali Allawi, announced that the Decision To Change The Exchange Rate Of The Dollar Against The Dinar Will Be A One-Time.

Allawi said in a press statement received by “Al-Eqtisad News”, “It is no secret to the sons of our honorable people the size of the global economic crisis that resulted from the repercussions of the Corona pandemic and shook the economies of most countries of the world, and in our dear country Iraq, the financial crisis resulting from the sharp decline in oil revenues has also been linked. In the presence of structural imbalances in the Iraqi economy that were not seriously addressed and carried over from one stage to another. ”

He added that on this basis it became clear to the eye the importance of urgent reforms in various economic fields and axes, including the currency exchange rate, although this decision is one of the difficult decisions, but we are obliged to take it because it addresses a large part of the crisis and to avoid similar situations that other countries have been exposed to, and to ensure protection The Iraqi economy, activating its activity, achieving a courageous reform leap and making real development with the aid and participation of all government, political forces, and economic and social actors.

He indicated that the decision to adjust the exchange rate will be one-time only and will not be repeated in the future, and the government, in addition to the Central Bank, will work to fix the new price that is in line with the reform requirements, while the government will work immediately to support the affected sectors and the poor segments through measures that include increasing social welfare allocations in the general budget.

In order to compensate for the possible increase in the prices of some imported goods, we have also directed government banks to increase interest rates to encourage citizens to keep their savings in these banks and to benefit from the high interest provided to them.

He pointed out that adjusting the exchange rate is a political decision of the Iraqi leadership, and it is a decision that enjoys the support of political and parliamentary forces and economic actors that have participated with the government in lengthy discussions to reach it, in addition to the competent international bodies for this measure, including the International Monetary Fund, which promised to allocate large sums to face the repercussions of the pandemic on Vulnerable groups, which are an important part of the government reform program regarding aspects of reforms and economic development.

The Ministry of Finance has also prepared a detailed paper on questions that may ask about changing the exchange rate in the country.

He noted that the Iraqi economy will increase in effectiveness with the entry into force of economic reforms, and that the pessimistic false interpretations, some of which carry a political background to impede the reform movement and prevent a qualitative leap in the fields of industry, agriculture and development, are correct.

Number of observations 32   Date of addendum 12/19/2020   https://economy-news.net/content.php?id=23205

Officially .. The Central Bank Of Iraq Announces The Adjustment Of The Foreign Currency Exchange Rate {Extended}

Time: 12/19/2020 17:03:27  Read: 7,306 times   {Baghdad: Al Furat News} The Central Bank of Iraq announced, on Saturday, the adjustment of the foreign currency exchange rate.

According to the official statement, Al Furat News received a copy of it that “during the last months of this year, intensive deliberations took place with the Prime Minister, the Minister of Finance and the Legislative Authority, regarding the economic situation in general and the financial crisis that the public finances are going through due to low oil prices, production and economic challenges.” And healthy. ”

He added, “The Board of Directors of the Central Bank also held a number of meetings, in some of which were hosted by the Minister of Finance for the same purpose.”

The Central Bank stated the following:

1- The structural distortions in the Iraqi economy impoverished public finances and restricted the ability of reform sought by the government and the Ministry of Finance. It is not a coincidence that the financial situation is this bad, nor is it the product of the current or the previous year, but unfortunately it took root more than a decade and a half ago due to the policy leadership of the economy and the preference for political thinking and the priorities of politicians over economic thought and development priorities and the rules of the relationship between economic policy on the one hand and fiscal and monetary policies On the other hand … the fiscal policy lagged behind, and the monetary policy was busy repairing the outputs of the confused fiscal policy.

2- The subordination of the economic and financial policy to the aspirations and concerns of politicians resulted in the last acceptable models of financial management in Iraq, and the role of that administration was limited to the distribution of oil resources to life-sustaining requirements such as salaries and operational requirements, and the Ministry of Finance did not address its roles and leadership in economic affairs.

In addition to the fact that it lacked many economic and financial information that could facilitate it and the decision-maker in the country to direct short and medium-term goals. This calls for an active approach to build economic and financial databases that facilitate decision-making and serve forecasts.

3- Because of all these conditions, the Central Bank had no choice but to intervene on more than one occasion to support public finances and save critical public spending requirements .. However, this does not mean that these interventions remain open without restrictions or endings.

4- On the other hand … the Central Bank understands the difficulties facing the reform intentions that the government is intending to undertake, but this does not prevent any steps that the monetary authority can take with effective steps to carry out reforms that inevitably affect the institutions of the financial authority, especially the effective collection institutions. Customs, taxes, and other public collection institutions, and that spending be leaned and rationalized, all of which depends on the political will of the supreme state institutions that support the direction of the financial authority to achieve this.

The government needs to support the vulnerable groups that will inevitably be directly affected, especially by any measure to change the exchange rate.

5- The legislative authority will have an important role in supporting the direction of the Central Bank to adjust the foreign currency exchange rate, as failure to take such a decision may make us forced to take difficult decisions that may put Iraq in a situation similar to what happened to neighboring countries.

It should also be emphasized here that this change (reduction) in the value of the Iraqi dinar will be one-time only and will not be repeated, and the Central Bank will defend this price and its stability with the support of its foreign reserves, which are still at solid levels that enable it to do so.

6- The financial crisis that Iraq was exposed to due to the Corona pandemic and the resulting deterioration in oil prices and the decline in oil revenues, this led to a large deficit in the general budget and forcing the Ministry of Finance to borrow from banks and re-deduct them with the Central Bank in large sums, in order to pay salaries And meeting other spending needs related to services provided to citizens, and the continuation of the current exchange rate, which is not in any way commensurate with the rates of exchange rates in other countries, has become a major obstacle to conducting real development and enhancing competitiveness for local production, which prompted the Central Bank to think seriously about responding to financing requirements.

Budget at the exchange rate that allows providing adequate resources to cover these needs and ensure the smooth payment of salaries and the critical requirements of government spending, and in order for the bank to avoid depleting its foreign reserves, which represent the main financial leverage for monetary stability in Iraq,And his keenness to support the public finances, as he is the advisor to the government and responsible for keeping its accounts.

Based on the foregoing, the Central Bank of Iraq decided to amend the foreign currency exchange rate as follows:

1450 dinars per dollar The price of buying foreign currency from the Ministry of Finance

1460 dinars per dollar The price of selling foreign currency to banks

1470 dinars per dollar The price of selling foreign currency to the public LINK

The Central Bank Announces The New Rates For The Dollar, Know It

Economie| 05:04 – 19/12/2020   Baghdad – Mawazine News   The Central Bank of Iraq announced, on Saturday, the new prices of the dollar against the dinar.

The bank stated in a statement that Mawazine News received a copy of, that “during the last months of this year, intensive deliberations took place with the Prime Minister, the Minister of Finance and the Legislative Authority, regarding the economic situation in general and the financial crisis that the public finances are going through due to low oil prices, production and economic challenges.” And health, and the Board of Directors of the Central Bank held a number of meetings, some of which hosted the Minister of Finance for the same purpose.

He added, “The Central Bank of Iraq would like to show the following:

1- The structural distortions in the Iraqi economy impoverished public finances and restricted the ability of reform sought by the government and the Ministry of Finance. It is not a coincidence that the financial situation is this bad, nor is it the product of the current or the previous year, but unfortunately it took root more than a decade and a half ago due to the policy leadership of the economy and the preference for political thinking and the priorities of politicians over economic thought and development priorities and the rules of the relationship between economic policy on the one hand and fiscal and monetary policies On the other hand … the fiscal policy lagged behind, and the monetary policy was busy repairing the outputs of the confused fiscal policy.

2- The subordination of the economic and financial policy to the aspirations and concerns of politicians resulted in the last acceptable models of financial management in Iraq, and the role of that administration was limited to the distribution of oil resources to life-sustaining requirements such as salaries and operational requirements.

To a lot of economic and financial information that can facilitate it and the decision-maker in the country to direct short and medium-term goals. This calls for an active approach to build economic and financial databases that facilitate decision-making and serve forecasts.

3- Because of all these conditions, the Central Bank had no choice but to intervene on more than one occasion to support public finances and save critical public spending requirements .. However, this does not mean that these interventions remain open without restrictions or endings.

4- On the other hand … the Central Bank understands the difficulties facing the reform intentions that the government is intending to undertake, but this does not prevent any steps that the monetary authority can take with effective steps to carry out reforms that inevitably affect the institutions of the financial authority, especially the effective collection institutions. Customs, taxes, and other public collection institutions, and that spending be leaned and rationalized, all of which depends on the political will of the supreme state institutions that support the direction of the financial authority to achieve this.

The government needs to support the vulnerable groups that will inevitably be directly affected, especially by any measure to change the exchange rate.

5- The legislative authority will have an important role in supporting the direction of the Central Bank to adjust the foreign currency exchange rate, as failure to take such a decision may make us forced to take difficult decisions that may put Iraq in a situation similar to what happened to neighboring countries.

It should also be emphasized here that this change (reduction) in the value of the Iraqi dinar will be one-time only and will not be repeated, and the Central Bank will defend this price and its stability with the support of its foreign reserves, which are still at solid levels that enable it to do so.

6- The financial crisis that Iraq was exposed to due to the Corona pandemic and the resulting deterioration in oil prices and the decline in oil revenues, this led to a large deficit in the general budget and forcing the Ministry of Finance to borrow from banks and re-deduct them with the Central Bank in large sums, in order to pay salaries And meeting other spending needs related to services provided to citizens, and the continuation of the current exchange rate, which is not in any way commensurate with the rates of exchange rates in other countries, has become a major obstacle to conducting real development and enhancing competitiveness for local production, which prompted the Central Bank to think seriously about responding to financing requirements.

The budget is at an exchange rate that allows the provision of adequate resources to cover these needs and ensure the smooth payment of salaries and the critical requirements of government spending, in the interest of the bank to avoid depleting its foreign reserves, which represent the main financial leverage for monetary stability in Iraq, and its keenness to entrust public finances, as the government’s advisor and responsible for keeping its accounts.

Based on the foregoing, the Central Bank of Iraq decided to amend the foreign currency exchange rate as follows:

1450 dinars per dollar The price of buying foreign currency from the Ministry of Finance

1460 dinars per dollar The price of selling foreign currency to banks

1470 dinars per dollar The price of selling foreign currency to the public

asking God Almighty He is the most gracious to take into the hands of our country and our people because of the goodness, repayment and honor that it contains.     https://www.mawazin.net/Details.aspx?jimare=134836

Central Bank: Change The Value Of The Iraqi Dinar Will Be One-Time Only And Will Not Be Repeated

Banks  Economy News – Baghdad  Economy News publishes the text of the Central Bank of Iraq’s statement on the change of the dollar’s exchange rate, and it says:

During the last months of this year, intense deliberations took place with the Prime Minister, the Minister of Finance and the Legislative Authority, regarding the general economic situation and the financial crisis that the public finances are going through due to low oil prices and production, and the economic and health challenges.

The Board of Directors of the Central Bank held a number of meetings, some of which hosted the Minister of Finance for the same purpose.

The Central Bank of Iraq would like to show the following:

1- The structural distortions in the Iraqi economy impoverished public finances and restricted the ability of reform sought by the government and the Ministry of Finance. It is not a coincidence that the financial situation is this bad, nor is it the product of the current or the previous year, but unfortunately it took root more than a decade and a half ago due to the policy leadership of the economy and the preference for political thinking and the priorities of politicians over economic thought and development priorities and the rules of the relationship between economic policy on the one hand and fiscal and monetary policies On the other hand … the fiscal policy lagged behind, and the monetary policy was busy repairing the outputs of the confused fiscal policy.

2- The subordination of the economic and financial policy to the aspirations and concerns of politicians resulted in the last acceptable models of financial management in Iraq, and the role of that administration was limited to the distribution of oil resources to life-sustaining requirements such as salaries and operational requirements, and the Ministry of Finance did not address its roles and leadership in economic affairs.

In addition to the fact that it lacked many economic and financial information that could facilitate it and the decision-maker in the country to direct short and medium-term goals. This calls for an active approach to build economic and financial databases that facilitate decision-making and serve forecasts.

3- Because of all these conditions, the Central Bank had no choice but to intervene on more than one occasion to support public finances and save critical public spending requirements .. However, this does not mean that these interventions remain open without restrictions or endings.

4- On the other hand … the Central Bank understands the difficulties facing the reform intentions that the government is intending to undertake, but this does not prevent any steps that the monetary authority can take with effective steps to carry out reforms that inevitably affect the institutions of the financial authority, especially the effective collection institutions. Customs, taxes, and other public collection institutions, and that spending be leaned and rationalized, all of which depends on the political will of the supreme state institutions that support the direction of the financial authority to achieve this.

The government needs to support the vulnerable groups that will inevitably be directly affected, especially by any measure to change the exchange rate.

5- The legislative authority will have an important role in supporting the direction of the Central Bank to adjust the foreign currency exchange rate, as failure to take such a decision may make us forced to take difficult decisions that may put Iraq in a situation similar to what happened to neighboring countries.

It should also be emphasized here that this change (reduction) in the value of the Iraqi dinar will be one-time only and will not be repeated, and the Central Bank will defend this price and its stability with the support of its foreign reserves, which are still at solid levels that enable it to do so.

6- The financial crisis that Iraq was exposed to due to the Corona pandemic and the resulting deterioration in oil prices and the decline in oil revenues, this led to a large deficit in the general budget and forcing the Ministry of Finance to borrow from banks and re-deduct them with the Central Bank in large sums, in order to pay salaries And meeting other spending needs related to services provided to citizens, and the continuation of the current exchange rate, which is not in any way commensurate with the rates of exchange rates in other countries, has become a major obstacle to conducting real development and enhancing competitiveness for local production, which prompted the Central Bank to think seriously about responding to financing requirements.

Budget at the exchange rate that allows providing adequate resources to cover these needs and ensure the smooth payment of salaries and the critical requirements of government spending, and in order for the bank to avoid depleting its foreign reserves, which represent the main financial leverage for monetary stability in Iraq,And his keenness to support the public finances, as he is the advisor to the government and responsible for keeping its accounts.

Based on the foregoing, the Central Bank of Iraq decided to amend the foreign currency exchange rate, as follows:

1450 dinars per dollar is the purchase price of foreign currency from the Ministry of Finance

1460 dinars per dollar the selling price of foreign currency to banks

1470 dinars per dollar is the selling price of foreign currency to the public

We ask the Almighty to take the hand of our country and our people because of the goodness, goodness and honor that it contains. The Central Bank of Iraq   December 19, 2020 Number of observations 131 Date of addendum 12/19/2020

https://economy-news.net/content.php?id=23204

TLM724:   Well I was wrong they did devalue the dinar. It is hard to wrap my head around the reasons the GOI is giving for this action. They indicate that the CBI will raise interest rates in the banks so the people won’t feel the impact but there aren’t a lot of people depositing their money

The Minister of Finance said ” The price of the dollar set at 1450 dinars will be approved for sale by the Ministry of Finance to the Central Bank, and the margin that the Central Bank will add will not be large and may reach 1490 dinars to one dollar.”

And ” will work to fix the new price that is in line with the reform requirements, while the government will work immediately to support the affected sectors and the poor segments through measures that include increasing social welfare allocations in the general budget. In order to compensate for the possible increase in the prices of some imported goods”

TLM724:  How in the heck does the GOI expect that this will not affect the citizens ?

TLM724:   I expect a rapid rise in inflation and a very strong reaction on the streets. Imported goods & building material prices will skyrocket and people will lose their jobs as a direct result of this decision. Wait until a mother goes to the market to buy a loaf of bread and has to pay at least 25 % more for it. On an average day the citizens of Iraq suffer because of a weak, corrupt government, throw in a decrease in their purchasing power and the devastating effects of Covid it’s like a triple slap in the face & it’s just not right !

TLM724:  All we can do at this point is watch what happens. This is a fluid situation and we will do all we can to keep you all updated. Thank you

TLM724:  Take a look at this :A stifling crisis looming in Baghdad … Deployment of forces and a session to reduce the value of the dinar **

https://www.bondladyscorner.com/t210783-a-stifling-crisis-looming-in-baghdad-deployment-of-forces-and-a-session-to-reduce-the-value-of-the-dinar

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