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Samson: Traders Are Heading To Sue The Fiscal And Central Currency Over Devaluation

24th December, 2020

Commercial circles across Iraq are heading towards registering a lawsuit against the Minister of Finance and the Governor of the Central Bank of Iraq for approving the law of devaluation of the Iraqi currency.

The trade expert and a consultant to the Baghdad Chamber of Commerce, Salah Al-Shami, said that the decision to devalue the currency does not carry any positive trends, but rather harms the national economy and the commercial sector in particular.

He pointed out that all the measures adopted by the affected business family are in accordance with the law in force in order to reverse this decision, which paralyzed the commercial movement and inflicted great losses on the Iraqi merchant.

He indicated that the type of damage that the national economy was subjected to will be determined in detail, so that everyone can be informed of the great imbalance that the economy was exposed to as a result of devaluation.   LINK

Samson:  Parliamentary integrity: 20 billion dinars, losses from the bank every day from the currency auction, profits go to banks

19:03 – 12/24/2020

On Thursday, the Parliamentary Integrity Committee revealed daily losses to the Central Bank of more than 20 billion dinars, with profits going to banks, indicating that the silence of the Central Bank is not explained in good faith.

“There are 5 Iraqi traders led by a businessman who are behind the monopoly of the dollar in the Iraqi market and then pumping it and manipulating prices, and the central bank is unable to control them,” said a member of the Integrity Committee, Khaled Al-Jushami.

“The cash liquidity as a result of the dollar’s profits in the auction selling the currency with the five dealers is equivalent to the bank’s sales in the five-day currency auction,” Al-Ghashami said, pointing out that the silence of the Central Bank cannot be explained in good faith.

He added, “More than 20 billion dinars a day, profits go to the banks, and the bank loses them from auction sales of the currency that was supposed to go to the state treasury.”  LINK

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Don961:  The struggle of the dollar and the dinar is “getting hotter”: determining the duration of the end of the “exchange rate hike” and revealing “steps” that will sabotage the “government goal”!

2020-12-24  Yes Iraq – Baghdad

Two measures that could have saved more money than the difference in the exchange rate of the dinar against the dinar were revealed by an economist, who pointed out that the Ministry of Finance requested that it be set at 1600 dinars to the dollar.

Economist Nabil Al-Marsoumi said – a televised statement monitored by “Yass Iraq”: “The difference that is currently apparent between the central bank and the market rate will continue until the budget is passed due to the state of uncertainty and uncertainty because everyone is waiting for the Iraqi parliament’s position on the 2021 budget, and what happens in terms of the difference between the exchange rate.” The official exchange rate is caused by speculation and through which the exchange offices are making huge sums of money and it may be less severe soon.

He added that “some believe that the decision to raise the exchange rate of the dollar is technical and was done through the central bank, although it is political and was made by a government decision from the Ministry of Finance.” Parliamentary statements throw more uncertainty and lead to repercussions in the market.

And he talked about government financial decisions in a deeper way, saying that “the timing of the recent government measures is very wrong, no country in light of the Corona crisis and the global recession has devalued its currency and deducted from the salaries of its employees and all countries have a layer of quantitative management packages and pumped money and aid to the public and private sectors.”

He believed that “raising the exchange rate to reduce the budget deficit, according to what the government deems, is unsuccessful, because it will not provide more than 4 billion dollars for the budget, and this could have been covered through two measures presented by the Ports Authority and rejected by the Ministry of Finance.”

He explained that “the two procedures require that customs duties be collected from imported goods upon opening documentary credits, and that fees are collected upon granting import licenses, even according to the financial obtained the same value of the money it wanted by reducing the dinar value and ending the problem of money laundering.”

He pointed out that “raising the dollar exchange rate will not support the local product for three reasons, the first of which is that most of its requirements and raw materials are imported from abroad, and because there is dumping of goods in neighboring countries in Iraq, and thirdly, the cost of production in our country is double the cost in those countries.”

He pointed out that “reducing the exchange rate of the dinar and imposing taxes on salaries reduced its value in some segments by 50%, because the reduction included 25% of the salary and the exchange rate difference reduced its value by 25% as well.”

Earlier, a member of the Parliamentary Finance Committee, Jamal Cougar, confirmed today, Wednesday, that the House of Representatives has the power to cancel or amend the article on tax withholding, as well as with regard to deducting employee salaries allocations.

Cougar said in televised statements that “Parliamentary Finance will study the draft federal budget law for the country for the year 2021 accurately and amend the loopholes if they are contained in the draft law.”

He added that “Parliament has the power to cancel or amend the article on the deduction of part of the employee allocations or with regard to tax deductions.”

And that “the high rates of deductions, we will work to reduce them, provided they do not affect the employee significantly.”

Last Tuesday, the reporter of the Parliamentary Finance Committee, Ahmed Al-Saffar, spoke about the most prominent remarks on the 2021 budget bill, and while noting that the budget is inconsistent with the country’s economic reality, he suggested returning the bill to the government.

Al-Saffar said, in a televised interview, “Until now, the 2021 draft budget has not been sent to Parliament, which will take 4-5 days to study the project legally, after which the project will be transferred to the Finance Committee and we may use our powers to reduce spending.”

Al-Saffar added, “This budget is inconsistent with the financial and economic situation in which the country is running, because it has high spending of 150 trillion dinars, according to the leaked version, which is very exaggerated,” indicating that “most of the paragraphs of the leaked draft are confirmed today that they are the same final draft.”

He continued, “The price of a barrel of oil on which the budget was based is illogical because it was $ 42 while the current price of a barrel was $ 52,” explaining that “lowering the exchange rate of the dinar is supposed to be supported by a competitive local product, which is not there, and thus the prices of imported goods have risen.” Covering the entire market. ”

The reporter of the Finance Committee in Parliament confirmed that “the 2021 draft budget and if it does not comply with the government program and the economic reality, it will be returned to the government,” indicating that “we need 30-45 days to study and approve the project if there are no internal and external political interference, and it may disrupt it. More”.

He suggested that “Parliament will not accept the passage of more loans in the 2021 budget,” again calling for the need to “reduce public spending and raise the price of a barrel of oil in the budget, because every dollar can add one trillion dinars annually.”  LINK

Popeye7:  Imo, it seems that they acknowledge they are in a bit of a pickle… There is only one thing that will get them out of this financial mess, and it has been set up during the last few years by the Fab 4 to be resolved in that way… When is the only question?..

Don961:  Parliament “closes the door” permanently on the possibility of restoring the previous dinar rate: adjusting salary taxes … the last hope

2020-12-25  Yes Iraq: Baghdad

The House of Representatives ended the debate about the possibility of restoring the previous exchange rate of the dinar against the dollar, thus ending any hope regarding the amendment or cancellation of the decision to devalue the Iraqi currency against the dollar, which has become a fait accompli. Or modified.

In order to eliminate any aspirations or popular anticipation to amend the exchange rate in the 2021 budget by Parliament, the Parliamentary Finance Committee issued a statement on the exchange rate of the dollar, absolving its liability and powers from interfering with it.

The Media Department of the House of Representatives stated in a statement, that “the Parliamentary Finance Committee confirmed that determining the exchange rate of the dollar is a governmental matter and it is exclusively within the government’s authority, since the government is the one that draws and implements the financial and monetary policy.”

The statement added, “The inclusion of that price in the draft federal budget law for 2021, is to calculate the value of oil revenues and international loans that are calculated on the basis of the dollar, and are converted into the Iraqi dinar depending on the exchange rate.”

He pointed out that “mentioning that price in the budget is not intended to acknowledge or not, but to be approved in the calculation of revenues and expenditures only.”

Last hope

After closing the door permanently on the possibility of restoring and canceling the decision to reduce the value of the dinar against the dollar, the last hope remains on the possibility of Parliament intervening to amend the paragraphs related to salaries from deductions and taxes, including exempting salaries of 750 thousand dinars from taxes and deductions, and making them start from one million dinars.

A member of the Parliamentary Finance Committee, Shirwan Mirza, said, “After each budget, the parliament makes huge and massive adjustments to the budget, especially the surplus numbers, and equates them with the groups affected by them before voting on them.” Without a comprehensive political consensus, otherwise no agreement will pass.

For its part, a member of the Finance Committee, Ikhlas Al-Dulaimi, said that “the 2021 draft that was sent from the government contains many deductions and taxes that will burden the citizen.”

And she added, “Among the deductions that have been imposed is a deduction of 5% of the salaries of special grades, a percentage that does not affect their high salaries.”

Al-Dulaimi explained that “the Finance Committee will not include any employee with deductions whose salaries range from 750 thousand or less, instead of 500 thousand.”   LINK

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Don961:  61 trillion of total funds in Iraq .. 7 trillion of them are only in the hands of the state: Where is the rest of the money spread and what can it be made?

2020-12-25  Yes Iraq: Baghdad

 A numeric statistic revealed the amount of money outside the banking system in Iraq, which amounted to 88%, while only 12% of the money trades in banks and the rest is accumulated in the hands of citizens, merchants and others.

The ratio of the amount of cash outside the banking system to the total cash issued from the Central Bank reached 88%, as the total cash issued reached 61 trillion dinars, while the value of the cash outside the banking system amounted to 54 trillion Iraqi dinars, which means that 7 trillion Vat is traded inside banks. .

The economist Manar Al-Obeidi considered that this matter “indicates the lack of confidence of the money owners in the banking sector.”

He continued, “Regardless of the reason for the reluctance of the money owners to the banking sector, the question that comes to mind is who owns these funds, what are the numbers of their owners and how much do they represent from the entire Iraqi people, and why do these funds not contribute to building private industrial and service projects?”

He added: “The most important question is where is the income tax on these funds? The value of which is no less than 1.6 trillion dinars in the worst cases, and can the Iraqi government benefit from these funds in support of the poor classes through the establishment of a solidarity fund based on donations and the contribution of these funds to Providing the basic necessities for this class, which increases in misery and deprivation day after day. ”

He indicated that “only one trillion is able to provide basic necessities for more than 4 million citizens for a year, if we assume that the monthly need of the poor citizen is around 20 thousand dinars of basic food supplies and that the food basket according to the United Nations classification is equal to about 5,000 dinars per week.

Al-Obaidi called on “the Iraqi government and all non-governmental bodies to adopt the Takaful Fund project and work to contribute to alleviating the shoulders of the poor and simple Iraqi citizen, as well as calling for the tax authority to work on improving the mechanisms of collecting money from major capital instead of imposing it on the employee, the owner of the garment and the barber.”

The government and government banks are working to attract citizens’ money and the huge liquidity available outside the banking system and hoarded in homes, as the Rasheed Bank and Rafidain issue calls from time to time to open savings accounts, while offering high financial benefits of up to 4%.

The Iraqi government plans to withdraw about 8 trillion dinars of these funds by offering bonds for sale in the next year’s budget to take advantage of the high financial liquidity available in homes and traded outside the banking system.   LINK

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Don961:  Dollar and peoples

Thursday 24 December 2020 Adnan Abu Zeid

The dollar has become the talk of Iraqis, after economic treatments conducted by the government and the central bank, while enlightened by history, is aware of the political and social role of this global currency, which has settled many times, the future of political systems, and the fate of economies.

However, developing countries seemed to be most affected by the fluctuations of the dollar and its value, because they are unable to borrow in their poor local currencies, and they are forced to pay off their foreign debts with it, but the dollar turns into a real tyranny in countries that are able to manage an economy that attracts foreign investment and boosts the pace of internal growth.

Iraq, one of the lagging countries in the administrative and economic system, where the observer touches the huge numbers of workers in redundant government jobs, as well as huge numbers of ineffective government companies, whose affiliates receive salaries, while university graduation policies give birth to huge numbers of certificates At a time when the private sector is suffering from marginalization through stifling regulations and regional competition, university owners are demanding government jobs.

The crisis of the relationship between the dinar and the dollar, in Iraq, has its experiences in other countries. It suffered from the collapse of its national currency, so it resorted to financial tricks such as quantitative easing or printing more Of cash.

Currency devaluations against the dollar are still occurring in many countries, as Turkey and Vietnam have resorted to reducing employment and foreign imports.

Indonesia and Argentina granted tax breaks to return money held abroad. Zimbabwe issued dollar bonds to support deficient foreign exchange holdings. OPEC members cut oil production to restore petrodollar revenue, and dollarize oil and other commodities.

And Iraq tried to exchange the dollar for the euro, in an attempt to insult the American currency during the era of Saddam Hussein’s regime. Iran is seeking to deal in currencies other than the dollar, to ease the impact of sanctions against it, but the problem is that most of the trading partners prefer the dollar. In its attempt to revive the economy and defeat corruption, India decided, in 2016, to begin to halt the circulation of currencies in denominations of 500 and 1000 rupees, and the Prime Minister urged the people to stand firm.

And both Ecuador and Zimbabwe resorted to “dollarizing” their economies, through the official use of the dollar in all transactions. Hong Kong has steadily pegged its currency to the dollar, making it a spin in the orbit of US monetary policy.

During the Cold War era, in the mid-forties to the early 1990s, communist regimes responded to the policy of financial strangulation by Western countries by floating more government loans on companies. Egypt and Argentina experimented with urgent direct devaluations early on.

Indonesia has also decided to activate domestic investment for the purpose of returning assets from abroad and attracting them with tax exemptions.

What is still worrying is that citizens of developing countries, especially the wealthy among them, do not trust local currencies, which made the economies of these countries de facto hostage to the dollar. 

All of these mechanisms, even if they contribute to recovering money, are not a panacea, nor will they be a substitute for the structural reforms that fail in many countries due to the inability to persuade the people of sacrifices.    LINK

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Don961:  Washington evacuates its embassy in Baghdad of civil servants

– 5 Hours Elapsed

Diplomatic sources said that the United States has completed the process of evacuating civilian employees from its embassy in Baghdad in conjunction with the return of Katyusha rockets to reappear in its vicinity, and the approaching first anniversary of the killing of Iranian General Qassem Soleimani and his Iraqi aide Abu Mahdi al-Muhandis, the former field commander of the Popular Mobilization Forces in an American raid in January 3rd, 2020.

This month, the US embassy in Baghdad was attacked twice, using Katyusha rockets fired by Iraqi Shiite militias affiliated with Iran.

The sources indicated that part of the US embassy staff in Baghdad temporarily returned to the United States, and the other part was transferred to the safe city of Erbil in northern Iraq, while the part responsible for managing vital activities in the Iraqi capital was transferred to an alternative location.

On Wednesday, the US Central Command announced that “the recent missile attack on the Green Zone in Baghdad was almost certainly carried out by a rogue militia group backed by Iran.”

US President Donald Trump warned the Iranian regime against launching any attack targeting Americans in Iraq, as the first anniversary of the assassination of Iranian General Qassem Soleimani approaches in a US drone strike near Baghdad airport.

“Our embassy in Baghdad was hit by several missiles on Sunday,” the outgoing president wrote on Twitter, an attack that left only material damage. “Guess where it came from: from Iran,” he added.

He continued, “Now we hear talk of other attacks against Americans in Iraq,” directing “friendly advice to Iran: If one American is killed, I will hold Iran responsible.” “Think about it carefully,” he warned.

In response to Trump, Iranian Foreign Minister Mohammad Javad Zarif wrote in a tweet Thursday, “Exposing your citizens to danger abroad will not distract attention from the catastrophic failures at home.”

Zarif attached a picture of Trump’s tweets published years ago, in which he said that former President Barack Obama was going to start a war with Iran to be re-elected, and a screen image of a graphic that is supposed to reveal the degree of danger of the Corona virus pandemic in the United States.

The Iraqi Security Media Cell announced the launch of eight Katyusha rockets in the Green Zone in which the US embassy is located on Sunday night, and the embassy’s defenses intercepted the missiles.

The US embassy and other foreign military and diplomatic sites have been targeted by dozens of missiles and IEDs since the fall of 2019.

Western and Iraqi officials blamed militant groups, including the pro-Iranian “Hezbollah Brigades”, for the attacks.

In the aftermath, the US command in the Middle East also condemned the firing of “21 missiles almost certainly launched by Iranian-backed militias” and “which were clearly not intended to avoid civilian casualties.”

The leadership also warned in a statement that the United States would hold Iran “responsible for the killing of any American citizen” in an attack attributed to such “rogue armed groups.”

And US Secretary of State Mike Pompeo accused Tehran of being responsible for the bombing.

The commander of US forces in the Middle East, General Frank MacKenzie, warned that his country was “ready to respond” in the event that Iran launched an attack on the first anniversary of Soleimani’s assassination.

In response, Iran urged the US authorities Monday not to create “tension”.

On January 3, 2020, Trump authorized a drone attack to assassinate the prominent Iranian general while he was in Baghdad, and this strike raised fears of escalation, but this did not happen, but tension is escalating with the approaching first anniversary of the operation, at a time when the US President entered the last weeks of his term .

Washington recently reduced its diplomatic staff in the Iraqi capital, and speculation has surfaced again in recent days about the possibility of closing the embassy permanently.

On Wednesday, a senior US administration official said that senior national security officials met at the White House and agreed on several options to deter any attack targeting US military and diplomats in Iraq.

The officials are Acting Defense Secretary Chris Miller and Pompeo and National Security Adviser Robert O’Brien, and they have agreed on a “variety of options” that will soon be brought up to Trump.

Iran continues to exploit the militias loyal to it in Iraq to carry out revenge attacks against the American presence in Iraq at a time when the Iraqi government fails to repel these violations.

Arab Newspaper   LINK