Tuesday Morning Iraq Economy News Highlights 3-14-23
An Arab Country Announces That Its Banks Have Run Out Of Money
Mar 8 14:51 Information/follow up. The head of the Association of Lebanese Banks stated that commercial banks in Lebanon do not have sufficient liquidity to pay depositors. The Secretary-General of the Assembly, Fadi Khalaf, according to Reuters, “These figures show beyond any doubt that the banks have no liquidity.”
These statements reinforce the possibility that Lebanese banks will declare bankruptcy in the coming period, and thus depositors’ money will evaporate, especially in light of the recent crises in the country’s banking sector.
Starting this month, the decision to price food commodities and products in supermarkets in dollars entered into force at the beginning of this month in Lebanon, as supermarkets and small stores put commodity prices on shelves in dollars, provided that the consumer is given the choice between paying the value of the goods in foreign currency or in Lebanese pounds. According to the unofficial market exchange rate at the moment of purchase.
Since the beginning of the economic collapse in 2019, Lebanese banks have imposed strict restrictions on deposit withdrawals, which have increased gradually, until it has become almost impossible for depositors to dispose of their money, especially those deposited in US dollars, or transfer them abroad, due to the lack of liquidity in banks.
And due to the impact of the crisis, which the World Bank ranked among the worst in the world since 1850, the Lebanese pound lost about 95 percent of its value, as it is now being traded on the black market at levels of 80,000 pounds per dollar.
Since the start of the crisis, banks have witnessed repeated intrusions by citizens demanding their seized money. Over the past few weeks, dozens of protesters have smashed bank facades and burned tires in the capital, Beirut, to protest against their inability to withdraw their deposits with local banks.
Likewise, banks closed their doors several times, and the Association of Banks announced on the sixth of last month an open-ended strike, considering that the current crisis is not only a crisis of banks, but of the entire financial system. LINK
Bank Panic” Is The Most Dangerous Thing In The Silicon Valley Crisis
Time: 03/13/2023 23:41:44 Read: 1,846 times {International: Al Furat News} Experts have warned of a “banking panic” that may prevail in the United States, as one of the most prominent repercussions of the “Silicon Valley” bank collapse crisis, which could lead to a repeat of the 2008 scenario.
The useful summary.. On important news, you can find it on Al-Furat News channel on Telegram.. The collapse of the “SVB” had reverberations in America and all over the world, given that many huge companies depend on this bank, which is the largest banking institution that collapsed after the global financial crisis in 2008. Analysts said that without reaching a solution by On Monday, other banks are likely to come under pressure if depositors worry about their savings.
“Bank panic”
The New York Times reported that “bank panic” begins when people fear that their deposits are “at risk”, leading to increasing withdrawals from banks.
She added that bank panic may affect even “healthy” banks, highlighting that the increasing withdrawals eventually lead to the bankruptcy of many banks and companies.
To preempt the banking panic, US officials at the Federal Reserve, the Treasury Department and other agencies tried to allay fears last night by stressing that all customers can get their money.
The “New York Times” stated that the urgent intervention of US officials aims to “reduce the possibility of a banking panic.”
Informed sources reported that the US authorities are about to take “fundamental measures” to support deposits in SVB Bank and prevent the repercussions of its sudden collapse from spreading.
The sources said that President Joe Biden’s administration officials worked, at the beginning of this week, to assess the repercussions of the bank’s collapse on Friday, with a special focus on the emerging project financing sector and multi-branch banks.
The Washington Post quoted three well-informed sources as saying that the US authorities are considering protecting all uninsured deposits in SVB, as well as intervening to prevent what they fear will be panic in the US financial system.
Earlier today, US Treasury Secretary Janet Yellen said she is working with banking sector regulators to address this collapse. It added that it was working to protect depositors, but ruled out a bailout plan.
Silicon Valley Bank, based in Santa Clara, California, is the 16th largest US bank with assets of $209 billion. LINK
An Independent Deputy Clarifies His Vision Of The “Triple Budget”
Independent MP Mustafa Al-Karawi saw, on Monday, that the approval of the budget by the Council of Ministers for three consecutive years is a step in the right direction and one of the positives that are calculated for the current government, while he stressed that the government is able to make amendments to the draft budget annually.
Al-Karawi said in a press interview seen by “Takadum” that “following the approval of the budget for three years is a purely institutional work that will prevent actions at the individual, partisan or component level,” noting that “the government is able to make amendments to the draft budget annually.”
And he continued, “The approval of the budget for three consecutive years is a step in the right direction from the positives that are calculated for the current government,” noting that “the government’s plan is a program that represents the government’s long-term thinking about achieving stability for the country at the level of the economic and financial sector.”
And Al-Karawi concluded his speech: “This plan will make the next governments start from what the current government has finished, and not work on new planning that will cost time in approving it and delay in implementing its paragraphs on the ground.” https://takadum-news.com/archives/154273
Al-Bajari Calls For Fairness To The Southern Governorates In The Budget And Granting Them Their Petrodollar Dues
Tuesday 14 March 2023 12:20 | Economical Number of readings: 230 Basra / NINA / – The Chairperson of the Parliamentary Transportation and Communications Committee, Zahra Al-Bajari, called today, Tuesday, for fairness to the southern governorates in the budget and granting them their dues from petrodollars.
And Al-Bajari said, according to a statement, that completing the budget is one of the most important steps for the continued success of the government, which has developed an ambitious government program to serve citizens, indicating that this success will certainly be a positive one. indicator of the success of the framework in the upcoming elections to continue serving our honorable Iraqi people.
And she added that, despite the observations that the budget is free from some essential points regarding the merit of the southern governorates, it will be an important step for service and success.
And she continued, that the budget neglected Basra’s entitlement from the petro-dollars, as the government program stipulated for the Sudanese to return the dues of the oil-producing governorates at 5% of the production of crude and refined oil, which means allocating about 7 trillion dinars for it in the 2023 budget, but the budget has allocated only two trillion dinars for her only.
And it called for adding another 5 trillion dinars to the petro-dollar allocations in line with the government program and with Law No. 21 of 2013 of the governorates that are not organized in a region in order to do justice to the southern oil-producing governorates.
Al-Bajari stressed the importance of fairness to the southern governorates by making financial allocations to Article 140 of the constitution, explaining that there are 150,000 citizens of Basra who have been covered by compensation for years and have not received financial compensation, and the government must grant them their rights and fairness, similar to the northern governorates./
A Significant Decrease In The Dollar Price In The Local Market
Baghdad today – Baghdad Today, Monday, the exchange rates of the dollar against the dinar recorded a significant decrease 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 154,000 dinars for every 100 dollars.
He added, “The buying and selling prices decreased in the exchange shops in the local markets in Baghdad, where the selling price reached 155,000 dinars per 100 dollars, while the purchase prices amounted to 1,530,500 dinars per 100 dollars.” LINK
Why Did The Iraqi Ministers Approve The Budget Law For Three Years.. Does The Constitution Allow That?
Baghdad / Obelisk: The Iraqi Council of Ministers approved, on Monday, the draft financial budget law and submitted it to Parliament for a vote on it, with high proposed expenditures and investments, driven by the increase in oil prices. While the legal expert Ali Al-Tamimi revealed, on Tuesday, the possibility of merging budgets for three years, after it was raised The confusion about the possibility of approving budgets for three years, in one go. The leader of the Sadrist movement, Safaa al-Asadi, spoke about the fact that the financial management law emphasizes the annual budget (year by year).
Al-Tamimi said in a statement to Al-Masalla, “The merging of budgets for the next three years is constitutionally and legally possible, as indicated by Article 78 of the Constitution and Article 4, Paragraph 2, of the Financial Management and Public Debt Law No. 6 of 2019, which authorized the merger, which is medium-term for the next three years, and the first year is obligatory.” The application is as is.
He added, “The two subsequent budgets are subject to amendment by Parliament and according to circumstances, which is appropriate to the philosophy of budget legislation, which is a future financial plan that prevents delays in legislation and can estimate the value of oil and the price of the dollar, and specify appointments and jobs with complete stability that guarantees their application and prevents changes.”
And the government of Muhammad Shia’ al-Sudani approved the draft general federal budget law for the years 2023, 2024 and 2025, and referred it to the House of Representatives, while Prime Minister Muhammad al-Sudani said that the government is keen that the budget be a mirror reflecting the government program, indicating that this budget will be repeated for three years. According to Financial Management Law No. 6 of 2019, which authorized the Council of Ministers to present a budget for three years.
The probabilities indicate that the 2023 budget may enter into force next April, while Advisor to the Prime Minister Hisham Al-Rikabi said that the budget approved by the Council of Ministers paves the way towards broad development horizons, adding that it will deal with important files related to combating poverty, supporting the private sector and investment, and establishing Economic Development Fund.
The last budget approved in Iraq dates back to April 2021, while one was not approved in 2022 due to the political turmoil that paralyzed the country for a year after the last legislative elections.
In 2021, the value of the proposed investments in the budget amounted to $19.6 billion, and in 2019 it amounted to $27.8 billion.
The Iraqi Prime Minister repeatedly stresses that infrastructure projects such as roads, schools, hospitals and housing projects are a priority in a country wracked by decades of wars and where a third of its 42 million population lives in poverty.
Al-Sudani hoped, during a press conference on Monday, that the projects included in the budget would allow “to address cases of poverty,” speaking of paying financial aid to about 600,000 families and establishing a “special fund to support the poorest governorates.”
He pledged to rebuild some areas, especially Sinjar, the stronghold of the Yazidi minority.
The total revenues of the proposed budget for one year amount to 134 trillion and 5 billion dinars (103.4 billion dollars), based on the price of a barrel of oil of 70 dollars.
In 2021, revenues amounted to $69.9 billion, at a price of $45 per barrel of oil.
As for the proposed deficit in the new budget, it is 63 trillion and 75 billion dinars (about 48 billion dollars), compared to 19.8 billion in 2021 and 23.1 billion in 2019.
He allocated about 307 million dollars to the Kurdistan region in order to pay the salaries of its employees, in exchange for 400 thousand barrels of oil per day produced in the region.
In order to secure basic expenses, the Iraqi parliament voted in the summer of 2022 on the emergency support law, amounting to $17 billion, and allowing Iraq, in particular, to purchase gas, electricity and grain to ensure “food security.” https://almasalah.com/archives/46584
