Iraq Economic News and Points to Ponder Wednesday AM 10-4-23
The Dollar Is Heading To Rise And Two Proposals Have Been Identified To Control The “Price Madness”.. What Is The Relationship With Iran?
Economy |Baghdad today – Baghdad Today, Wednesday (October 4, 2023), economic expert Nabil Al-Marsoumi identified two options to address the dollar problem in Iraq, while confirming that the exchange rate is on its way to rising during the coming period.
The dollar exchange rates in Iraqi local markets are witnessing unstable jumps until they approached 160 thousand dinars for every 100 dollars, in conjunction with information about American intentions to impose sanctions on new banks that are not committed to the terms of transferring and financing trade using the dollar.
The Key To The Solution
Al-Marsoumi said in an interview with “Baghdad Today” that “the key to resolving the crisis and the dollar problem in Iraq exists and is not far away,” pointing out that the Central Bank’s current sales are to cover external transfers and documentary credits, and therefore their numbers are reasonable and proportional to the volume of foreign trade.
He added, “The main problem is that the Central Bank financed trade with Iran, which amounts to $10 billion, through external transfers to Emirati banks, before it adopted the electronic platform, and after it was cut off, merchants and companies began to finance imports through the parallel market to obtain the US dollar.” This means that it is not for smuggling or money laundering, but rather for real trade.”
Al-Marsoumi pointed out, “The more the electronic platform tightened its procedures in terms of reducing the shares of banking offices and companies, the more the scarcity of cash dollars increased, in addition to the fact that the volume of tourism between Iraq and Iran is large and amounts to huge sums of money that are covered through the parallel market because travelers are deprived of obtaining dollars.” Via the official price.
He continued, “The dollar is on its way to rise, especially with the Central Bank’s action to reduce banks’ shares of the cash dollar by half, accompanied by the imminent release of budget funds, which will lead to an increase in the import of consumer and investment materials because the volume of internal production does not cover the need.”
The economic expert stated, “There are two options to end the dollar problem in Iraq, which are either to cancel the sanctions imposed on Iran or to cut off trade with it because adopting other currencies may fall under the heading of American sanctions,” pointing out that the adoption of bartering Iraqi oil for Iranian gas has not been implemented. “Actually because of the sanctions.”
On Monday (September 25, 2023), the American newspaper The Cradle described the recent measures of the Central Bank of Iraq as “severe,” by restricting dealing in the dinar and preventing the circulation of the dollar within the country, while noting that these measures came after American warnings against the Central Bank of Iraq due to continuing violations. .
The newspaper said, according to a report translated by “Baghdad Today,” that the new measures come against the backdrop of “warnings” issued by the US Federal Reserve against the Central Bank of Iraq, announcing the continuation of what it described as previous “violations” on the basis of which sanctions were imposed on 14 Iraqi banks, threatening to implement more. Sanctions on other banks.
The newspaper also confirmed that the dollar smuggling operations from inside the country led directly to “reducing the value of the Iraqi dinar and exposing it to significant inflation,” explaining that the measures of the Central Bank of Iraq come as another step to ensure the stability of the Iraqi dinar, especially in the current stage, which the newspaper described as “sensitive” as a result of American pressure on the central bank.
Penalties And Bans
It is noteworthy that a third of Iraqi banks are now exposed to US sanctions and a ban on dealing in dollars, which the Iraqi authorities are trying to avoid expanding due to its significant negative impact on the Iraqi economy, according to the newspaper’s description.
On Sunday (September 24, 2023), the Central Bank of Iraq announced the issuance of new instructions for selling the dollar, indicating that it seeks to open direct channels of communication for Iraqi banks with their foreign counterparts in correspondence and commercial exchange.
He pointed out, “The coming year will witness the restriction of all internal commercial and other transactions to the Iraqi dinar instead of the dollar.” LINK
Chambers Of Commerce Expects The Dollar To Rise In The Coming Days
Information / Baghdad.. On Wednesday, the Chambers of Commerce expected a rise in the dollar exchange rate for three reasons.
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The head of the Chambers of Commerce in Diyala, Muhammad Al-Tamimi, said in an interview with Al-Ma’louma, “The reality of the situation indicates that the dollar exchange market is unstable and is currently fluctuating according to specific rates, but all indicators push for its rise as pressure continues on the parallel market.”
He added, “Three reasons behind the dollar’s rise are purchases by multiple segments for travel, buying vehicles, paying off debts, or for the purpose of tourism,” pointing out that “all the government’s efforts to secure currency for travelers are tainted by corruption in light of the inability of many to afford it.” Securing the dollar despite submitting all the papers.”
He pointed out that “the parallel market has become a de facto refuge for travelers because obtaining the dollar is difficult and complicated due to bureaucratic procedures, and there are negatives that require scrutiny and investigation at the same time to find out where the money allocated from the currency goes.”
The dollar exchange market is witnessing fluctuation in its prices, but it is still far from the prices officially set by the Central Bank of Iraq. LINK
Political Differences Exclude The Oil And Gas Law From Parliament’s Priorities
October 4, 2023 Baghdad/Al-Masala Al-Hadath: Iraqis have been waiting to discuss the long-awaited oil and gas law for more than a decade.
Political differences within Parliament led to a delay in voting on it, even though it represents the main revenue component of the Iraqi budget.
Since the first session of the Iraqi Council of Representatives, in 2005, the draft oil and gas law has been stuck in drawers, as disagreements prevent its approval in its final form.
Committee member Ali Al-Mashkour said, “The reasons for the delay in approving the law in the House of Representatives are not only technical controversial points, but there are administrative points that do not exceed seven points,” pointing out that “Prime Minister Muhammad Shiaa Al-Sudani and the heads of the political blocs are continuing to negotiate to try to pass the law.” The law has the least possible differences, given that there is no law that serves everyone equally, and this is not possible as a result of the disparity in existing shares.”
The representative added, “There is a dispute over the management of the fields in the Kurdistan region and who will manage these fields, whether the federal government or the Erbil government, but as a law, it must be implemented on the various components within the country, whether in the region or in Basra, given that the latter is no different.”
Regarding Kurdistan, we are all under one umbrella, which is Iraq. He noted that “the Kurdistan Regional Government is trying to continue the same old policy that was tiring it in managing its fields, which lacked a central presence.”
In late August, a committee was formed to develop a draft of the oil and gas law and present it to the government and the House of Representatives.
Iraq exports an average of 3.3 million barrels of crude oil per day, and black gold constitutes more than 90 percent of the Iraqi treasury’s resources.
One of the most important changes included in the new law is the affirmation of the federal government’s sovereignty over oil and gas throughout the country. This represents a victory for the federal government in a long dispute with the Kurdistan Regional Government, which has been demanding control of the oil and gas resources in its territory.
It is expected that the adoption of the new law will increase the stability of the oil and gas sector in Iraq and improve the efficiency of managing oil resources. It is also expected to increase oil revenues for the Iraqi government, which can be used to finance economic development and social projects.
The financial advisor to the Iraqi Prime Minister, Mazhar Muhammad Salih, said that accelerating the adoption of the federal oil and gas project law in the House of Representatives as quickly as possible will establish a stable national road map for investment and production of the country’s primary sovereign resource, which is oil and gas.
He explained that this natural resource contributes directly to Iraq’s gross domestic product at a direct rate of approximately 50 percent, and leaves an indirect impact on the total economic activity of our country at a rate of no less than 85 percent.
Economist Nabil Al-Marsoumi revealed disagreements between the center and the region that may affect the draft new oil law.
Al-Marsoumi said in a blog post followed by Al-Masala, “There are several differences between the center and the region that may affect the draft new oil law.”
Disagreements over the oil and gas law focus on the powers to produce oil and gas, the method of managing joint fields, and the interpretation of Article 11 of the Constitution.
The Oil, Gas and Natural Resources Committee warns of “administrative” disputes behind the delay in approving the Oil and Gas Law.
Historically, there have been disagreements between the federal government of Iraq and the Kurdistan Region on issues related to the oil and gas industry.
These disputes include a range of complex issues related to rights, distribution, and administration, and have caused escalation of tension between the two sides.
The differences relate to the management of fields located in the Kurdistan region and who will manage these fields, whether the federal government or the Erbil government.
But the Kurdistan government wants to manage the fields itself, away from the federal government.
The region is also facing the repercussions of the decision of the International Arbitration Court and the sanctions imposed on Turkey due to exports, which may push it to submit to the will of Baghdad.
Disagreements still exist over the extent of the Kurdistan Regional Authority’s authority to extract and export oil and gas independently.
The federal government considers that it has the exclusive authority to manage and export oil and gas resources at the national and international levels.
There are also disputes over how to distribute oil and gas industry revenues between the federal government and the Kurdistan Region, and they have always been a source of tension, as the region claims its right to obtain a larger percentage of oil revenues based on their contribution to production.
Some agreements and temporary solutions have been reached over the past years, but differences still cast a shadow over the relationship between the federal government and the Kurdistan Region. While real solutions require continuous consensus and dialogue between the parties concerned.
Points to Ponder From Seat of the Soul by Gary Zukav:
The decisions that you make and the actions that you take upon the Earth are the means by which you evolve
An angry personality will respond to the difficulties of it life with anger, and thereby bring into being the necessity of experiencing the results of anger —
A person who is angry, and yet reveres life, however — will respond very differently to the difficulties of his or her life than a person who is angry and has no reverence for Life
Each personality draws to itself personalities with consciousness of like frequency, or like weakness — therefore — the world of an angry person is filled with angry people — the world of a greedy person is filled with greedy people — and a loving person lives in a world of loving people
Until you become aware of the effects of your anger — you continue to be an angry person