Iraq Economic News Highlights and Points to Ponder Wednesday AM 10-18-23
Will The Dollar Disappear In Iraq?
Economical 10/18/2023 Sarah Salam For eight months, the Central Bank has been unable to stop the rampage of the dollar against the dinar in the parallel market. This is offset by the absence of the ability to meet the dollar demands that cover foreign trade in light of the expansion of Iraq’s import list and its limitation to exporting oil only.
The electronic platform recently introduced by the Central Bank was not able to restore stability to the parallel market and reduce the gap between the official price and the parallel price, as most transfers still take place outside that platform, especially with countries that are witnessing US sanctions such as Iran, Syria, and entities in Turkey.
With this landscape full of uncertainty, Iraq intends to completely ban transactions in US dollars starting from January 2024, under the pretext of reducing the misuse of hard currencies, financial crimes, and currency smuggling abroad.
From my point of view, the timing of this measure is not correct, in light of the absence of solutions to the problems facing the parallel markets for foreign currency, as this portends an exacerbation of the cash or cash crisis in Iraq, and there is a possibility that matters will reach a severe shortage in the Iraqi monetary mass, which means resorting to… The central bank will print money, and the consequences will be dire, most notably the monetary inflation that a number of countries in the region are currently witnessing, such as Iran, Turkey, and Lebanon.
Here I call on the Central Bank to work diligently towards adopting a new currency to replace the dollar, such as the euro, for example, the Chinese yuan, or the Emirati dirham. This is not easy, but it is not impossible, while working to use gold as an agreed-upon unit for evaluating goods and services.
This trend would reduce the pressure on the dollar in the parallel market, and would also be a fatal blow to speculators in the parallel markets, in addition to preserving trade with countries that are currently witnessing economic sanctions by the US Treasury Department and the US Federal Bank.
Today, the Central Bank of Iraq has a historic opportunity to address and manage the dollar exchange rate and arrange the parallel market securities, in a practical and decisive manner, and work to determine priorities in the monetary market with the aim of improving the stability of the foreign currency. This is matched by a serious effort to push private banks towards providing the best services to customers and creating a spirit of competition between them. In order to attract the hoarded cash mass outside the Iraqi banking system. LINK
Strict Measures Regarding The Dollar In Kurdistan Following A Decision Related To The Iraqi Dinar
Baghdad today – Erbil Today, Wednesday (October 18, 2023), Kurdistan Customs Director Samal Abdul Rahman revealed that strict measures have been taken for the purpose of preventing the smuggling of dollars and hard currency from the region.
Abdul Rahman told “Baghdad Today”, “The decision to collect fees in Iraqi dinars at border crossings is an important decision aimed at preserving the hard currency and also strengthening the Iraqi dinar.”
He added, “This measure is very important, and a good step aimed at strengthening the dinar, and the measures taken by the Customs Directorate at all ports and airports are deterrent measures for the purpose of preventing smuggling.”
Yesterday, Monday (October 16, 2023), the Kurdistan Regional Government decided to collect taxes and fees at border crossings in Iraqi dinars, instead of the US dollar.
The Department of Media and Information stated in a statement, “Based on a decision issued by the Kurdistan Region Council of Ministers, customs duties and taxes at border crossings and customs points will be collected in Iraqi dinars instead of dollars,” indicating that “any party that does not adhere to this decision will be subject to punishment.”
She stressed that “all ministries and relevant authorities will be bound by this decision, and in the event of any violation occurring at one of the border crossings or customs points, the violator will be subject to punishment.”
Experts point out that some of these cash sales allocated to travelers leak into the black market and are purchased by merchants to finance their trade with countries banned from the dollar, led by Iran, from which Iraq’s annual import volume amounts to approximately 10 billion dollars.
Others warned of the repercussions of some banks not handing over dollars to “travelers,” while stressing that the continuation of the matter would lead to an increase in demand for the dollar in the parallel market and thus an increase in the exchange rate.
Many private banks and exchange companies are accused of being involved in smuggling the dollar, leaking it to the black market, and seizing large amounts of currency auction sales. The accusations also targeted the National Bank of Iraq (Jordan) of seizing 70% of the Central Bank’s daily dollar sales. LINK
Again.. The Dinar Is Falling Against The Dollar In Baghdad Markets And Money Exchanges
Economy |Today Baghdad today – Baghdad The exchange rates of the US dollar against the Iraqi dinar increased today, Wednesday (October 18, 2023), in the markets and exchange offices of the capital, Baghdad.
According to “Baghdad Today” monitoring, selling prices in Baghdad markets and money exchanges recorded 161,000 dinars for every 100 dollars, while purchasing prices recorded 159,000 Iraqi dinars for every 100 dollars.
Yesterday, Tuesday (October 17, 2023), the governorates of Sulaymaniyah, Kirkuk, and Halabja recorded the highest exchange rates, reaching 159,450 dinars per 100 dollars, while the lowest exchange rate recorded was in the capital, Baghdad, at 159,100 dinars per 100 dollars. LINK
The Rise In Dollar Exchange Rates In Iraq.. This List
Economy 2023-10-18 | 03:27 6,800 views Alsumaria News – Economy Alsumaria News publishes the exchange rates of the dollar against the Iraqi dinar in Iraqi local markets for Wednesday, October 18, 2023.
Dollar prices rose with the opening of the Al-Kifah and Al-Harithiya stock exchanges, recording 160,100 dinars for every 100 dollars, while selling prices in exchange shops in the local markets in Baghdad rose, as the selling price reached 161,000 Iraqi dinars, while the purchase price reached 159,000 dinars for every 100 dollars.
For more than 8 months, and specifically since the Central Bank began operating the electronic platform and the international financial transfer system ““SWIFT,” the dollar exchange rates in Iraq have not witnessed stability despite the attempts of the government and the Central Bank to control the exchange rate in the parallel (black) markets.
The Central Bank of Iraq decided earlier to adjust the exchange rate of the dollar against the Iraqi dinar, as the price of buying the dollar from the Ministry of Finance reached 1,300 dinars per dollar and selling it at (1,310) dinars per dollar to banks through the electronic platform, and it is sold for (1,320) dinars per dollar. Dollars from banks and non-banking financial institutions to the final beneficiary. LINK
A Kurdish delegation in Baghdad to engage in a new round of discussions on the oil and gas law
Posted On2023-10-18 By Sotaliraq Baghdad / Hussein Hatem The governments of Baghdad and Erbil are engaged in a round of discussions. To resolve the draft oil and gas law, which has been stuck in Parliament since the first session of the House of Representatives in 2005, a Kurdish delegation from the Kurdistan region will discuss with a government delegation from Baghdad the details of the draft law.
The draft oil and gas law regulates Iraq’s vital sector and the management of the country’s oil fields through one national company, with imports being deposited in one account. 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.
Kurdistan Democratic Party MP Shirwan Al-Dobardani says, “The Parliamentary Finance Committee will hold a meeting on Thursday in the presence of the Ministers of Finance, the Federal Government and the Kurdistan Region, in the capital, Baghdad.” He added, “The main goal of the two ministers’ presence is to clarify the amounts of money and loans sent from the federal government to the Kurdistan region.”
The representative from the Democratic Party pointed out, “The meeting will also discuss the file of funds disbursed by the regional government during the previous eight months to Kurdistan employees and retirees, in addition to social protection, and other amounts that were received from Baghdad.” Al-Dobardani pointed out that “the export of Kurdistan oil via the Turkish Ceyhan pipeline has been stopped since 03/25/2023, while the SOMO company, along with the Ministry of Natural Resources in the region, is supervising the extraction and export of oil.”
He pointed out, “The quantities of oil extracted are currently being used locally; Until the resumption of oil exports via the Ceyhan line by the federal government and the Turkish side.”
The draft oil and gas law in Iraq available to Parliament stipulates that responsibility for managing the country’s oil fields must be entrusted to a national oil company, and supervised by a federal council specialized in this subject.
For his part, Member of the House of Representatives, Muhammad Al-Ziyadi, says, “The dispute continues until now between the federal government and the Kurdistan Regional Government regarding the oil and gas law.”
He added, “The dispute took root through the French court’s decision to prevent the export of oil through Ceyhan and Turkey,” noting that “these matters are complex and will not be resolved easily, and the oil and gas law must be amended.”
Al-Ziyadi pointed out, “The financial budget is frank and clear and stipulates the calculation of all the money with which oil was exported to Turkey via Kurdistan in order to increase or decrease the region’s share.”
Regarding the salary scale and general amnesty laws, a member of the House of Representatives explained, “The salary scale law witnesses delay by the Minister of Finance due to the lack of response by the committee formed by the Prime Minister.”
He stated, “The general amnesty law is an urgent issue and must be enacted to support society, and this does not mean that we approve of those whose hands are stained with the blood of Iraqis.”
The oil and gas law has caused major tension between Baghdad and Erbil for years. Last year, the matter reached the judiciary, as Erbil believed that the central government was seeking to seize control of the region’s wealth, according to an Agence France-Presse report.
In February 2022, the Federal Court in Baghdad ordered the region to deliver oil produced on its lands to Baghdad, and to cancel contracts the region had signed with foreign companies.
The matter reached the point where the judiciary in Baghdad invalidated contracts with many foreign companies, especially American and Canadian companies.
After years of exporting oil unilaterally through Turkey, the autonomous Kurdistan region must adhere, as of late 2023, to the decision of an international arbitration body that gave Baghdad the right to fully manage Kurdistan’s oil.
As a result, exports from the region stopped, and a temporary agreement signed between Baghdad and Erbil in early April stipulates that Kurdistan oil sales will be made through the Iraqi Oil Marketing Company “SOMO.” As for the revenues generated from the region’s fields, they will be deposited in a bank account with the Central Bank of Iraq or One of the banks approved by the Central Bank of Iraq. LINK
Points to Ponder on FEAR:
- Here is the world. Beautiful and terrible things will happen. Don’t be afraid. ~ Frederick Buechner
- Fear doesn’t shut you down; it wakes you up. ~ Veronica Roth
- Keep your fears to yourself, but share your courage with others. ~ Robert Louis Stevenson
- Our greatest fear should not be of failure but of succeeding at things in life that don’t really matter. ~ Francis Chan
- Fear’s useless. Either something bad happens or it doesn’t: If it doesn’t, you’ve wasted time being afraid, and if it does, you’ve wasted time that you could have spent sharpening your weapons. ~ Sarah Rees Brennan
