Monday Morning Iraq Economic News Highlights 3-6-23
The Sudanese Government Is Preparing For The Unified Treasury System.. It Regulates Spending And Curbs Corruption
March 5, 2023 Baghdad / Obelisk: In an important step on the road to organizing financial policy and developing its mechanisms, the office of the Iraqi Prime Minister, Muhammad Shia’ al-Sudani, announced the implementation of the “unified treasury account” system, in coordination with those responsible for monetary and financial policy.
The project aims to end corruption and chaos in spending, and to provide real information about the amount of expenditures, which are distributed over large numbers of accounts, which makes auditing difficult and provides wide opportunities for manipulating public money.
The unified treasury system provides centralization in monitoring government bank account balances.
Iraqi institutions used to have their own accounts, which they controlled separately.
The International Monetary Fund emphasized that the “sound financial framework” in Iraq is “a critical element in overcoming economic challenges,” as “policy makers should carefully find a balance between the goals of saving exceptional and unexpected oil profits, in order to enhance the ability to withstand in the face of The volatility of oil prices in the future, the increase in social spending is very important, and spending on public investments, while gradually reducing the level of dependence on oil.
He added, in a statement, at the end of last December, that “the implementation of the public finance framework … must be accompanied by sustainable efforts,” which include “raising the efficiency of public financial management, especially by establishing the unified treasury account, and implementing the Integrated Financial Management Information System (IFMIS), urgently, in addition to strengthening control over potential contingent liabilities and liabilities.
The Iraqi economic expert, Salam Sumaisem, attributed Iraq’s delay in implementing this system to “the multiplicity of decision-making bodies in Iraq, and the fragmentation of powers in some years.”
And if the unified treasury system is implemented, it will control public spending.
Prime Minister Muhammad al-Sudani said the unified treasury account system would contribute to reducing corruption.
And the journalist Ahmed Ali talks about the weakness of the financial policy in Iraq, but rather it is almost missing, forming a knot before approving the budget in light of the price of the dinar, and a barrel of oil pending resort to the financial management system or law.
Ali al-Rubaie, who is interested in Iraqi affairs, also talks about that working on the electronic platform is the real challenge for the success of financial policy, and one of the most important ways of success is the approval of the money settlement law for all importing companies, communications, and Iraqi and foreign investors, considering that all of these must have bank accounts in Iraq.
A New Rise In Dollar Prices In The Local Market
Economy | Baghdad today – Baghdad Today, Monday, the exchange rates of the dollar against the dinar witnessed a rise in the stock exchange and exchange shops in the capital, Baghdad.
The (Baghdad Today) correspondent said, “The Al-Kifah and Al-Harithiya stock exchanges recorded an exchange rate of 157,000 dinars for every 100 dollars.
He added, “The buying and selling prices increased in exchange shops in the local markets in Baghdad, where the selling price reached 158,000 dinars per 100 dollars, while the purchase prices reached 156,000 dinars per 100 dollars.” LINK
An Economist For / Nina /: All The Measures Of The Central Bank Did Not Succeed In Controlling The Rise In The Price Of The Dollar
Monday 06 March 2023 09:04 | Economical Number of readings: 434 Baghdad / NINA / – The specialist in economic affairs, Dergham Muhammad Ali, confirmed: “All the measures of the Central Bank and economic security did not contribute to controlling the rhythm of the commodity and dollar market.”
Muhammad Ali said in a statement to the National Iraqi News Agency ( NINA ) that “the intermediate link, represented by the banks, is the cause of the problem. None of the treatments succeeded in achieving price stability, and the only beneficiaries are the bank brokers.”
He pointed out, “Linking dollar sales to travel outside Iraq is a kind of legal smuggling of foreign currency, and the local market does not benefit from it, and most of the goods and products are still at high prices without real solutions.”
The economic specialist stressed, “The economic security must monitor the selling prices of imported goods to the beneficiaries of remittances at the official price, especially basic commodities.”
The Central Bank of Iraq had issued several packages of economic measures to control the exchange rate of the dollar against the dinar in the Iraqi market. The dollar is still high, and today it reached 158 thousand dinars for every 100 dollars.
The Iraqi Central Bank’s Sales Increased To More Than 172 Million Dollars
Economy |Today, 11:27 Baghdad today – Baghdad Today, Monday, the sales of the Iraqi Central Bank increased to more than 172 million dollars.
According to the schedule of the currency sale window, and followed by (Baghdad Today), the Central Bank sold during its auction today 172,821,581 million dollars, which the bank covered at a basic exchange rate of 1305 dinars per dollar for documentary credits and international settlements for electronic cards and at a price of 1310 dinars per dollar for external transfers and at a price of 1310 dinars per dollar in a manner monetary.
Most of the dollar sales went to enhance the balances abroad in the form of (transfers, credits) at a rate of 110,721,581 million dollars, while the rest of 62,100,000 went in the form of cash sales. LINK
An American Report Reveals The Details Of The Electronic System For The Exchange Of Dollars For The Iraqi Customer
2023.03.05 – Baghdad – people A report by the American newspaper “The New York Times” dealt with the unintended “difficulties” and “great suffering” caused by ordinary Iraqis from the country who intend to travel outside Iraq and need dollar currency, resulting from the recent banking procedures and provisions that the United States and Iraq followed to limit From the illegal leakage of hard currency to criminal beneficiaries outside the country and from those accused of money laundering,
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Pointing out that the demand for the dollar has increased and that the cost of buying it in Iraqi dinars has risen at some of the local currency dealers.
The following is the text of the report:
Long queues of Iraqis who plan to travel outside the country form in the early hours of the day outside the exchange shops, carrying bags full of Iraqi currency with them. These days, it is difficult to find an exchange shop that has remaining dollar balance, and the shops that have balance run out early.
Abu Ali, the owner of a money exchange shop in the Karrada area, says, “I have no dollars left.”
The new provisions, which were applied by agreement between the United States and Iraq, require more transparency regarding bank transfers of dollar currency from the Iraqi reserve account for currency deposited with the Federal Reserve Bank in New York.
These provisions came into force late last year, and are part of a long-awaited plan to modernize Iraq’s financial system as it begins to comply with provisions that most countries follow and adapt to provisions requiring greater transparency in international money transfers.
However, some Iraqi merchants and others who used to pay in dollars via international transfers did not like this procedure or they were unable to implement the requirements of transparency, and for this they resorted to exchange shops, causing a great demand for the dollar in the Iraqi street and its high price against the dinar.
Every day, the Central Bank of Iraq facilitates financial transfers from its account at the Federal Bank in New York for the benefit of Iraqi merchants and people to pay the prices of goods imported from outside Iraq. Money transfers are important because few commercial entities have international bank accounts.
On the other hand, a share of the hard currency is sent in cash to the Central Bank of Iraq, which goes to exchange shops and banks, and is disbursed in large part to Iraqis who intend to travel abroad.
Until the day when these provisions were implemented, American officials were unable to track the course of financial transfers of hard currency and whether they ended up with parties that were originally included in the economic sanctions lists.
According to the new provisions, it requires persons or companies that request money transfers for dollar currency to reveal their identity and return and the identity of the party or persons that will receive the money, and then the information is reviewed by an electronic system as well as by experts in the Central Bank of Iraq and the Federal Bank in New York before The transfer is being disbursed.
The Iraqi economist, Ahmad al-Tabaqjali, head of the Asian Union Fund for Iraq, says that the new system allows banks around the world to conduct electronic checks on remittances issued from Iraq to other countries.
Tabaqjali adds, “In short, this banking system makes it easy to detect suspicious cases.”
The financial advisor to the Iraqi government, Mazhar Salih, says that many requests are now rejected, noting that sometimes questionable identities are the reason, and at other times the reason is that many Iraqi merchants do not have the required licenses to import goods or that they are not legally registered. They are commercial entities and therefore constitute a breach of Iraqi law. Salih added that these refusals created an increased demand for the dollar at the Iraqi exchange shops, and its exchange rate rose significantly to Iraqis who have a legitimate need for it.
Since 2003, there are two rates for the exchange rate of the dollar against the Iraqi dinar. There is the official rate set by the central bank and an unofficial rate for the black market and is often higher. When there is a scarcity of the dollar currency, its price increases on the black market in exchange shops.
The differences between the two prices create difficulties for the Iraqis, as happened to the woman, Jannah, who is a mother of four children. She says she is saving money to buy a $250 refrigerator.
In October, it cost 320,000 dinars in Iraqi dinars, but today, due to the scarcity of the dollar, its price has risen to 375,000 dinars, and she says, “The new price is beyond my purchasing power.” According to Central Bank data on daily dollar financial transfers, the new provisions have reduced the flow of dollars into the market by approximately 65% compared to the period preceding these measures, and the daily rate of dollar sales decreased from 180 million to 67 million dollars.
Since that time, transfers began to rise, but they are still less than half of the rate they were before the implementation of the new banking system.
The report indicates that until now it is not clear exactly the extent of the decrease in illegal financial transfers.
Douglas Suleiman, president of the Gulf States Institute in Washington and former US ambassador to Iraq, says, “I cannot limit the rate of manipulation and fraud at 90%. Perhaps the rate of manipulation is 45% and another 45% is incompetence or just not knowing how to deal with the new provisions.”
Translated by: Hamed Ahmed – Al-Mada https://www.nasnews.com/view.php?cat=103229