Tuesday Afternoon Iraq Economic News Highlights 7-4-23
Demonstrations Of Money Changers Calling For The Stability Of The Dollar Price
POSTED ON2023-07-04 BY SOTALIRAQ Dozens of owners of banking companies demonstrated in Baghdad, yesterday, Monday, in protest against the Central Bank of Iraq’s policy of selling dollars in the daily auction.
Al-Mada correspondent stated that the owners of exchange companies gathered in front of the Central Bank building in the center of the capital, Baghdad, demanding the stability of the exchange rate of the dollar, and not limiting its sale to travelers, as this contributes to the smuggling of hard currency outside Iraq. The demonstrators also called for the implementation of Law No. 56 of 2004, which gives the Central Bank exclusive power to supervise and inspect its financial institutions.
And the sales of the Central Bank of Iraq from foreign remittances in the auction on Monday amounted to more than 200 million dollars.
And the auction statistics stated, “The Central Bank sold yesterday, during its auction for buying and selling US dollars, 226 million, 912 thousand, and 662 dollars, which the bank covered at a basic exchange rate of 1305 dinars, per dollar for documentary credits and international settlements of electronic cards, and at a price of 1310 dinars per dollar for foreign transfers, and at a price of 1310 dinars per dollar.” dollars in cash.
She added that most of the dollar sales went to boost balances abroad in the form of (remittances, credits) at a rate of 205 million, 672 thousand and 662 dollars, while the rest of 21 million and 240 thousand dollars went in the form of cash sales.
She pointed out that the banks that bought cash dollars amounted to 9 banks, while the number of banks that met requests to strengthen balances abroad reached 17 banks, while the total number of exchange and mediation companies participating in the auction was 36 companies.
And economist Nabil Al-Marsoumi asserts that the only solution to reduce the gap between the official dollar price and the parallel price in the market is international understandings about paying countries’ dues for imports of goods and merchandise in dollars and the large withdrawal on it in the currency auction, indicating that this rise came to settle the amounts of trade and import from neighboring countries.
Al-Marsoumi said, “The sales of the Central Bank of Iraq increased, especially during the past months of April and May, and restored their previous levels before launching the electronic platform.”
And he reported, “The increase in sales confirms the Iraqi banks’ compliance with the rules for working with the electronic platform established by the US Federal Bank, and therefore a large number of bank transfers have been successfully implemented.”
He pointed out, “The large gap between the official selling price of the dollar and the parallel market, despite the Central Bank’s measures, is caused by the use of cash dollars to settle trade with neighboring countries, especially Iran, as it is subject to US sanctions that prevent it from obtaining dollars directly.”
Al-Marsoumi added, “Iraq imports goods and products from Iran amounting to $10 billion annually, and this prompts the need to find certain mechanisms to finance trade with Iran.”
He called, “to find understandings between the Central Bank and the US Treasury to implement a mechanism that would enable Iraq to pay the Iranian side’s dues for goods, such as choosing an alternative currency for the dollar.”
Al-Marsoumi concluded, “The failure to find a settlement for this matter keeps the dollar prices fluctuating, no matter how much the Iraqi Central Bank sells dollars.”
The bank’s daily sales, especially foreign remittances, to feed Iraq’s imports,” says economist Mohammed al-Hassani.
And Al-Hassani added, “These transfers need to be checked by financial institutions that Iraq has contracted with to prevent smuggling and money laundering, and therefore they need a long time until they are completed, which pushes the merchant to the parallel market to obtain dollars as quickly as possible.”
He pointed out that “most of the small traders resort to the parallel market to obtain dollars to finance their simple trade instead of obtaining it from the Central Bank, because they do not have their own companies, which increases the demand for dollars more than the supply.”
The exchange rates of the dollar in the parallel market rose to approaching 150,000 dinars against 100 dollars, despite the central bank’s attempts to reduce the gap between the parallel market and the official rate that is fixed in the budget at 130,000 dinars versus 100 dollars. LINK
A Government Appeal Against The Budget..And Parliament: Our Amendments Are Positive To Increase Revenues
Posted On2023-07-04 By Sotaliraq Baghdad / Hussein Hatem The Federal Budget Law entered a new spiral a week after its publication in the Iraqi Al-Waqa’e’ newspaper, as the Prime Minister, Muhammad Shia’a Al-Sudani, submitted an appeal against a number of paragraphs of the law, with a request to issue a (state order) to stop the implementation of these articles after the law entered into force until the judiciary decided the constitutionality challenge. that material.
Yesterday, Monday, the Federal Supreme Court informed the House of Representatives of the appeal filed by the government against the general federal budget law.
A member of the Parliamentary Finance Committee, Mueen Al-Kazemi, said in an interview with (Al-Mada), that “the House of Representatives has the authority to reduce numbers and transfer allocations to ministries in the draft financial budget law submitted by the government.”
Al-Kazemi added, “There is an aspect that the government can appeal in the event of an increase in the financial burden on it, such as an increase in job grades.”
He pointed out, “The first and last decision remains for the Federal Court,” noting that “the House of Representatives and the Finance Committee did what they had to do in order to approve the budget as soon as possible.”
Al-Kazemi pointed out, “It is not possible for the government to reach the total budget amount, which is 199 trillion dinars; As a result of the budget deficit, but it can spend 150 trillion Iraqi dinars.
And he continued, “One of the powers of the House of Representatives is to reduce the exaggerated numbers in the financial budget, in addition to transfers,” noting that “nearly 8 trillion has been transferred from ministries to other ministries and to other governorates.”
And Al-Kadhimi indicated, “The Ministry of Finance is working on implementing the instructions of the Budget Law to the letter, for the purpose of informing them to the spending units early next week.”
He explained, “The government is serious about financing ministries and governorates to advance the service reality,” adding, “The financial releases will not be delayed except in articles that have a legal and constitutional appeal, until a decision is made.”
Al-Kazemi went on to say, “Most of the amendments that took place to the articles of the budget law sent by the government were positive amendments that would increase government revenues.”
And he continued, saying, “One of the things that the government can challenge is the issue of fees on oil companies that were not approved by the House of Representatives,” noting that “their revenues for the state may reach one and a half trillion for the year 2023 and the coming years.”
Al-Kazemi stressed that “the public financial budget will be launched and reported to the governorates and ministries,” pointing out that “the financial allocations will be deposited in the accounts of government departments for signing contracts and implementing projects, and not delaying the implementation of the government program.”
For his part, the other member of the Finance Committee, Hussein Moanis, says, “The parliament’s relationship with the public budget budget law is not only a legislative relationship, but there is an important aspect related to monitoring performance and spending resources.”
Moanes added, “We will continue to monitor all spending units, as well as exchange resources and the spending mechanism, and measure the impact of legislation in parliament.”
He pointed out, “The committee’s keenness to enhance centralization in the transfer of funds for projects, as it focused on the spending that the government paid in the budget law on ministries’ projects.”
And the House of Representatives voted, on June 11, on the financial budget for three years; 2023, 2024 and 2025, after four consecutive parliamentary sessions due to disagreements between the political forces regarding a number of articles, ended with a vote on all articles after some were removed and new articles were added to them. LINK
What Is The Impact Of The Appeal On The Implementation Of The Budget.. Will The Federation Accept The Government Action? (details)
policy |Baghdad today – Baghdad The legal expert, Salem Hawass, commented today, Tuesday, on the federal government’s submission of an appeal against a number of articles of the Financial Budget Law, before the Federal Supreme Court.
Hawass told “Baghdad Today” that “the government has the right and powers to appeal against any paragraph added by the House of Representatives in the budget law, especially if these paragraphs contain a financial aspect.”
He explained, “Parliament has no authority to add any paragraph in which financial allocations are due to be paid by the government.”
And the legal expert stated, “An appeal against a number of budget articles will not affect the implementation of the law, but only the contested articles will be deferred until the appeal is decided by the court.”
And he continued, “It is also certain that any paragraph added by Parliament that includes a financial aspect will be canceled by the Federal Court. The Court has decisions and confirmations in this regard over the past years.”
The Federal Supreme Court had informed the House of Representatives of the appeal filed by the government regarding the financial budget.
The Parliamentary Finance Committee described the government’s appeal to the budget as “very expected.”
Committee member Jamal Cougar said in a press statement: “It was expected that the Prime Minister, Muhammad Shia’a al-Sudani, would file an appeal with the Federal Supreme Court with a number of paragraphs of the budget law, especially since the Minister of Finance and al-Sudani informed Parliament before voting on the law that the government would appeal to any paragraph affecting the government program.” And it has a financial side.”
And Cougar indicated that “the House of Representatives, by amending some paragraphs of the budget law, added some paragraphs that have a financial side, despite informing the Minister of Finance and the Sudanese, and this appeal was very expected.” LINK
Baghdad Today Publishes The Text Of Article 75 Of The Budget Challenged By The Sudanese
Policy |Baghdad today – Baghdad Today, Baghdad publishes the text of Article 75 of the Financial Budget Law, which was challenged by Prime Minister Muhammad Shia al-Sudani today.
The article concerns the contracts of the Ministry of Higher Education and Scientific Research and the rest of the ministries after the date of October 2, 2019.
The Federal Supreme Court had informed the House of Representatives of the appeal filed by the government regarding the financial budget.
The Parliamentary Finance Committee described the appeal as “very expected.”
A legal expert also predicted that the court would accept the appeals, given that some articles were a “financial side,” which is outside the parliament’s jurisdiction. LINK
A Government Source Denies The Validity Of Sudani’s Appeal Against Articles Of The Budget Law
policy |Baghdad today – Baghdad Today, Monday, an informed government source denied that Prime Minister Muhammad Shia’a al-Sudani had challenged the budget law in the Federal Court.
The source stated in an interview with “Baghdad Today”, that “it is not valid for the Prime Minister to appeal 12 articles of the tripartite budget law at the Federal Court.”
An informed source announced earlier today that the Prime Minister had submitted an appeal to the Federal Court with 12 articles of the Financial Budget Law.
It is noteworthy that the Iraqi parliament ended, on the twelfth of last June, voting on all articles of the financial budget for the three years: 2023, 2024 and 2025, after a debate and deep differences between the political parties. LINK
