Friday Morning Iraq Economic News Highlights 3-31-23
The Central Bank Announces “Liberating The Dollar From Restrictions”: The Difference Between The Official And Parallel Rates Will Disappear
Baghdad – IQ Deputy Governor of the Central Bank Ammar Hamad said, on Thursday, that the difference between the official exchange rate of the dollar against the dinar, and the parallel rate in the markets will gradually disappear. Hamad said, in statements to state television, followed by IQ NEWS, that “the Central Bank has liberated restrictions on sales, and it can sell any amount of dollars as long as there is a real demand for it.”
“The difference between the official and parallel exchange rates for the dollar will gradually disappear,” he added. And the Deputy Governor of the Central Bank continued that the number of governmental and private banks exceeds 70 banks, and the Central Bank is “very good at sorting out good and not so good banks.” https://www.iqiraq.news/economy/48401–.htm
The Central Bank Of Iraq Identifies The Reasons For The Gradual Decline In The Dollar Exchange Rate
Economy 10:36 – 2023-03-31 The Central Bank of Iraq identified the reasons for the gradual decline in the dollar exchange rate recently, while noting that the difference between the official and parallel exchange rates will gradually disappear.
The Deputy Governor of the Central Bank, Ammar Hamad Khalaf, said, “The central bank has taken several measures to reduce the price of the dollar, especially through the three packages that it launched at the beginning of this year, which were sufficient to address the high exchange rate in the parallel market.”
He added, “The bank met with the Federation of Iraqi Chambers of Commerce and a number of merchants to discuss the challenges and put in place mechanisms to address them,” suggesting that new packages would be issued to address all the challenges facing merchants to facilitate their access to foreign currencies.
He explained behind the gradual decline in the price of the dollar in the past two days to the increase in the volume of sales of the central bank, “noting that” the bank liberated restrictions on sales, and the bank can sell any amount of dollars as long as there is a real demand for the dollar, “explaining, that” the difference between my price The official and parallel exchange will gradually disappear.”
He pointed out, “Iraq does not need to establish new banks at the present time or in the future, but rather activate the existing banks,” pointing to “the presence of more than 70 governmental and private banks,” noting that “the Central Bank is serious about sorting Good banks from not so good.
He pointed out that there was a great response by banks to the instructions of the Central Bank regarding the official exchange rate, “calling at the same time to facilitate the procedures for merchants’ transactions quickly.” https://kirkuktv.net/AR/Details/14250
Al-Azm Calls On The Presidency Of Parliament To Expedite The Transfer Of The Budget To The Finance Committee
Policy |Today, 01:22 Baghdad today – Baghdad On Friday, the Azm Alliance called on the First Deputy Speaker of the House of Representatives to expedite the transfer of the budget from the Presidency of Parliament to the Finance Committee in the House. LINK
An American Perception.. The Budget Agreement Is Invalid After 2023, And The Solution Is To Establish “Skomo”
2023-03-30 10:58 Shafaq News/ An American report identified the issues that still need negotiations and settlement between the Kurdistan Region and the federal government in Baghdad, regarding the 2023 budget, considering that the government’s approval of the current draft budget does not definitively answer many questions.
After a year-long process full of bickering to form the government after the 2021 parliamentary elections, the country remained without a budget in 2022, and expenditures were limited to paying salaries and pensions.
A report by the American “Washington Institute” for research, translated by Shafak News Agency, stated that during the past years, debates over allocations and deductions were mixed with broader questions related to the principle of federalism: Does the region have the legal authority to explore for and market oil? And what should be the per capita share of non-sovereign spending in the absence of an official population census? What percentage of the budget should be allocated to non-sovereign expenditures?
And the American report considered, “Each faction of Iraq has its own and strong motives to pass the current year’s budget as soon as possible,” noting that “investments are still frozen at a time when oil prices are high, and federal reserves have accumulated to currently record a huge level of 115 billion.” dollars, given that the 2022 budget was not approved.
Baghdad Pragmatism
The report stated, “All factions are now eager to benefit from the resulting budget, which will be larger than usual, and which is expected to include $152 billion in spending, or a full 50% of the 2021 budget. Therefore, allocating a share for the Kurds is within everyone’s reach.” year, and the KRI’s spending needs can be met (albeit barely) without focusing on other beneficiaries.
The report pointed out that there are issues that still require negotiation, and in practice, many decisions must still be taken, as one of the most important outstanding issues is the marketing of the quantities of oil produced by the region, amounting to 400 thousand barrels per day, and the method of managing the revenues generated.
He believed that Baghdad had, in the past, drawn up overly complex schemes for the region to force it to hand over all or part of its oil exports to the federal authorities in the port of Ceyhan on the Turkish coast, where the pipeline route between Iraq and Turkey ends.
And the American report pointed out, “This time it seems that Baghdad will suffice with adopting a more pragmatic approach, as according to the provisions of the current budget draft, the region will market its oil and deposit the revenues in a bank account that federal officials can monitor, and after that, Baghdad will deduct that amount from its monthly allocations.” to the region, with the transfer of any surplus funds owed to the Kurds.
However, the effect of this arrangement will be valid for only one year, and perhaps only half a year in practice, given that finalizing the budget may take a few more months, and therefore a more sustainable system cannot be imposed before Iraq passes a federal oil and gas law, and perhaps a law sharing revenues as well,” according to the American report.
Oil Deal
The report believes that only through a legal settlement at this level may be sufficient to reconsider the decision of the Federal Supreme Court issued in February 2022, which ruled the unconstitutionality of the region’s oil exports, otherwise the oil and gas law approved by the regional government in 2007 and related investment contracts will remain unconstitutional. legitimacy.
In addition, the report considered that Baghdad, the regional government and other oil-producing provinces must agree on a few other matters if they hope to facilitate further progress on these issues after the 2023 budget agreement, including “sharing revenues according to a fixed equation.”
Founding of “Skomo”
In addition to determining the region’s per capita share of non-sovereign expenditures, Baghdad must resolve the controversy over sovereign and non-sovereign expenditures, and therefore it must determine the size of the “candy cake” from which the region will receive a piece, according to the “Washington Institute” report.
The American report believed that this measure must be taken so that a similar agreement does not arouse resentment among non-Kurdish voter bases. It is better for the government to include compensatory incentives in the projects of the executive ministry in oil-rich southern Iraq for the years 2023 and 2024.
The Washington Institute urged, according to its report, to “introduce gradual changes to oil marketing,” adding, “The region must market its oil to pay off debts owed to merchants amounting to $3.5 billion, as it seems that Baghdad is unwilling to bear these arrears.” “.
He stated, “After paying off these debts, it is possible to reach an arrangement for joint oil marketing, similar to the implementation of the proposal that is repeatedly put forward regarding the establishment of the Iraqi and Kurdish Oil Marketing Company (Skomo).”
The American report warned that “any change in international contracts (almost all of which are codified in the English law for arbitration in foreign courts) may lead to many lawsuits that would harm Iraq’s level of friendship with investors.”
Therefore, the report stressed the need for “any new oil and gas law to exclude the provisions of the current contracts signed under the (Kurdistan Oil and Gas Law of 2007)”.
He added, “If the proposed Kurdish regional oil company is established as a joint venture between the federal and Kurdish ministries of oil, it should be given full local authority to approve annual plans and budgets for field development.”
Kurdistan reforms
In addition, the American report stressed the need to “undertake economic reforms in the region, despite the large share allocated to Kurdistan from the huge national budget, the region will hardly be able to establish a balance in its regional budget for this year.”
And he believed that “the situation is likely to be better in the coming years, so the regional government should prepare by carrying out economic reforms such as reducing subsidies, increasing efficiencies, and transferring public sector employees to the private sector.”
On the political level, the report said, “The credit goes to international actors, led by the United States, for resolving the issue after urging the main parties in the Kurdistan Region to show greater flexibility on local Kurdish issues and greater unity in their dealings with Baghdad.”
The American Institute concluded the report by stressing the need to continue these efforts with the same intensity until the oil and gas law is ratified. Inaction now may quickly lead to a renewal of the dispute between the Kurds, which may eliminate the possibility of signing a historic agreement.
Translation: Shafak News Agency LINK
Parliamentary Committee: Obstructing The Approval Of The Budget Completely Paralyzes The Economic Sectors In The Country
Political | 10:40 – 31/03/2023 Baghdad – Mawazine News, a member of the Parliamentary Oil, Gas and Natural Resources Committee, Zainab Al-Moussawi, called on the Presidency of the House of Representatives to include the budget law for the year 2023 on the agenda in the upcoming sessions.
Al-Moussawi said, in an interview reported by her media, that “disrupting the approval of the federal financial budget for the year 2023 completely paralyzes the economic sectors in the country, in addition to the direct and broad impact on the lives of citizens, in light of the dependence of thousands of workers on investment projects related to the budget.”
Al-Moussawi called for “the need to include the financial budget law for the year 2023 on the agenda of the House of Representatives for the upcoming sessions, in order to approve it.”
Al-Moussawi indicated, “The financial budget represents the main tool for achieving the state’s general policies, whether economic, social or service, and it is a presentation of the government’s plans and annual programs that it prepares in response to challenges.”
https://www.mawazin.net/Details.aspx?jimare=223323
The Dollar Is Heading To Record The Second Quarterly Loss In A Row
Time: 03/31/2023 09:52:54 Read: 1,209 times {Economic: Al Furat News} The dollar is heading towards recording the second quarterly loss in a row, today, Friday, while investors believe that US interest rates are close to their peak.
It seems that the modest support resulting from the demand for safe havens in mid-March is about to expire, after concerns about the banking sector rocked global markets.
The dollar index fell 1.3% during the first quarter of the year, while the euro rose 0.5% overnight after data on inflation in Germany reinforced expectations of further rate hikes in the euro zone.
The euro recorded in the latest trading in Asia a slight rise to $ 1.0, and the dollar rose 0.2% against the yen to 133 yen, while Societe Generale analysts expected that the dollar would remain restricted to a limited range until the impact becomes more evident, but if the US interest rate expectations continue to be re-evaluated, There will be more backtracking.
The New Zealand dollar recorded its highest level in nearly two weeks at $0.6, and declined by about 1% during the first quarter of the year, while the Australian dollar rose 0.2% to $0.6, which is also down by about 1.3% during the quarter.
Eurozone inflation and core personal consumption expenditures in the US are due later in the day. LINK
Parliamentary Calls To Expedite The Inclusion Of The 2023 Budget On The Parliament’s Agenda
Iraq 2023-03-31 A member of the Parliamentary Oil, Gas and Natural Resources Committee, Zainab al-Moussawi, called on the Presidency of the House of Representatives to include the budget law for the year 2023 on the agenda in the upcoming sessions. Direct and broad impact on the lives of citizens, in light of the dependence of thousands of workers on investment projects linked to the budget.
Al-Moussawi called for “the need to include the financial budget law for the year 2023 on the agenda of the House of Representatives for the upcoming sessions, in order to approve it.”
Al-Moussawi indicated that “the financial budget represents the main tool for achieving the state’s general policies, whether economic, social or service, and it is a presentation of the government’s plans and annual programs that it prepares in response to challenges.”
The Council of Ministers had referred the draft federal budget law to the House of Representatives.
https://kirkuktv.net/AR/Details/14249
Parliament Decision: Parliamentary Finance Will Receive The Budget Early Next Week And Approve It Within A Month
Time: 03/31/2023 11:22:21 Read: 1,066 times {Politics: Al-Furat News} The Rapporteur of the House of Representatives, Representative Gharib Askar Al-Turkmani, announced the arrival of the draft financial budget law to the Parliamentary Finance Committee early next week.
Al-Turkmani told Al-Furat News agency that: “The final committee will discuss the budget and make some amendments to it, after which it will be discussed in the parliament.”
He added, “The approval of the budget law in parliament may take a period of one to two months.”
And the House of Representatives announced, on March 16, that it had received the draft budget law.
It is noteworthy that the Council of Ministers approved, in its meeting on March 13, the three budgets and referred them to Parliament for approval.
Prime Minister Muhammad Shia al-Sudani said, after the council meeting in a press conference, that: “The total budget is more than 197 trillion dinars, the operational budget is more than 150 trillion dinars, and the investment budget is more than 47 trillion, and the budget deficit is 63 trillion dinars.”
And that “total revenues amount to more than 134 trillion dinars, and oil revenues amount to more than 117 trillion based on the price of oil at 70 dollars, and non-oil revenues amount to more than 17 trillion dinars.” Raghad Daham LINK
