KTFA (Don961 & DeepWoodz)

  In KTFA 

Don961: The specified the objectives of the white paper and confirmed its inclusion as a timetable for implementation. Advisor to Al-Kazemi to Al-Zawra: The Central Bank contributes to financing the budget by 70% and the exchange rate will be fixed.

February 1, 2021 9:10 pm  Author: alzawraapaper Al-Zawra / Hussein Faleh:

The advisor to the prime minister for economic affairs, Mazhar Muhammad Salih, revealed the central bank’s contribution to financing the budget by 70%, and while setting the goals of the white reform paper, he emphasized that changing the exchange rate of the dollar against the dinar depends on the status of the balance of payments and the size of the cash reserve , Pointing out that the exchange rate will be fixed.

In an interview with Al-Zawra, Saleh said: The Central Bank contributes to financing the draft budget by 70%, and this financing is called debt legalization.

Indicating: The monetary authority is a monetary authority that uses its reserves to support and support the budget.

He indicated: It is a very big responsibility, because it requires that the monetary authority maintains its objectives in controlling prices in general and not price slipping.

Emphasizing: that monetary policy must take into account that it is possible for the economy to move with some kind of high prices, but if growth moves larger then this is the goal.

He explained: that financing is done by accepting bonds and discounting them in Iraqi dinars.
Emphasizing: that the reduction in the value of the dinar has become so that the reserve covers the funds, and maintains itself.

On changing the exchange rate of the dollar against the dinar, Salih pointed out: This is a monetary policy that the exchange rate may change, but Iraq depends on a fixed exchange rate.
Emphasizing that the change depends on the balance of payments position and the cash reserve position, and this is a relative issue. 

Raising the exchange rate will achieve financial revenues, and it has an economic and social impact, but the social impact can be addressed by the budget. 

Indicating that raising the exchange rate has financial and other economic goals.

About the white reform paper, Saleh said: The white paper is a long-term project, not a short-term project.

Indicating: that the paper is suitable as a preamble to the goals of the objectives of a ten-year development project.

He continued: The paper includes a timetable for implementation.

The advisor to the prime minister, Mazhar Muhammad Salih, had revealed, earlier, that there was a lack of revenue and funding, while noting that changing the price of a barrel of oil in the budget would reduce the deficit. Oil constitutes 83% of the budget, and actual expenditures amount to more than 90%.
Noting that “in the Financial Management Law depends on the price of a barrel of oil, and the price is conservative for fear of market fluctuations.”

He added that “the government is facing a shortage of revenues and funding,” noting that “the first draft of the budget entered the House of Representatives and included setting the price of a barrel of oil at 42 dollars, which is a conservative price, but it is now sold for more than that, and what we care about is the average oil price for the year 2021.”

Saleh continued, “If the parliament changes the price, it will be useful, and the amendment will be 3 dollars, equivalent to 3 billion dollars, and this reduces the deficit,” explaining that “if the parliament changes the price of a barrel of oil, it must be done in coordination with the government.” So that the implementation of the budget is clear to all. ”

He emphasized that“ non-oil revenues are very important, but their discipline is weak except in customs collection and the returns of state assets. ”

Noting that “the government today is determined to diversify and maximize revenues, and it is a budgetary restriction, but it is difficult to place restrictions on its head.”   link

Bravo13:  The raising of the dollar is an international policy, sounds good to me, enact the policy and lets see the rate !   So imo they are saying that when they change the rate it will be fixed, the question is where will it be fixed, $1.46 works for me

DeepWoodz:  SDRx3. Imo

ManofGod:  SDRx3 could possibly be $3-$4 range.

MW:  http://www.rs.iq   I noticed that the rate changed from 1450 for the past few weeks to now as of TODAY 1465!! Could that be because they are about to drop the 000’s and the rate will be $1.46??

Don961:  20% of the monetary mass is in the hands of the state only … Presenting 4 solutions to ensure the continuation of salary payments – urgent

Posted 1 hour ago Baghdad today – Diyala

The economic expert, Rasim Al-Aqidi, said today, Tuesday (February 2, 2021), that the Iraqi state has only 20% of the monetary mass at the present time, in light of a financial crisis that requires the government to withdraw financial liquidity to cover its expenses.

Al-Aqidi said in an interview with (Baghdad Today), “The Iraqi state after 2003 intended to print 61 trillion dinars in different denominations, but what it actually has is only 20% of the total cash mass,” noting that “the remainder in the largest part of it goes to Neighboring countries and private banks, most of which act as tools for those countries, in addition to the money stored in homes.

Al-Aqidi added, “The state suffered after 2003 from the lack of control over its balances in the monetary mass, and it represents an important and essential function of the Ministry of Finance and the Central Bank, which prompted the latter to sell the dollar in an attempt to withdraw the cash balances since the presence of 20% of the monetary mass cannot enable it Paying salaries, and the rest of other dues, which require availability of at least 50% of the mass in the hands of the state in order to pay all financial obligations.

With regard to the state’s orientation to print currency, in order to avoid the financial crisis, the economic expert believes that “there is no benefit in the process of printing any money in light of the lack of control over the monetary mass.”

Regarding the mechanism of controlling cash masses, he pointed out that “controlling cash blocks is through means that are not complicated, the first of which is the localization of employees’ salaries, the second is the use of electronic cards, in the exchange of funds and the third is the adoption of modern frameworks in managing financial assets and the fourth is seeking to launch incentives for payment Citizens to put their money in government banks to increase the cash mass of the government, through which it succeeds in paying all expenses and salaries.

Recent data revealed that the volume of money smuggled outside Iraq is estimated at 300 billion dollars.

The Parliamentary Integrity Committee confirmed that the volume of money smuggled outside Iraq is estimated at 350 trillion dinars, “about 300 billion dollars,” while the estimated amount of money spent in previous years in fake contracts.

Committee member Taha Al-Dafi said, “The government formed a committee to combat corruption, and this committee worked during the first days in a clear and significant way, but it retreated during the recent period due to political pressures, as various accusations were directed against it,” expressing his hope for the continuation of its work, and the investigation into More important issues such as corruption files rampant in some ministries.

He continued: “The funds spent after 2003 are estimated at a thousand trillion, and include the budgets of the operational and investment ministries, as huge funds were wasted in contracting cases, as well as the corruption that was rampant in most of the contracts contracted by the ministries and governorates.”

“We did not touch any clear project that was completed in Baghdad or the provinces, and most of the projects were referred to impeccable companies, and they were dealt with the worst commissions, so the works were not completed, and the money remained on simple projects, but we did not see strategic projects as main roads and fast bridges,” he said.

He pointed out to “smuggling up to 350 trillion dinars outside Iraq during the past years, all of them via fake receipts, in exchange for commissions obtained by some officials.”

The estimated volume of Iraqi money smuggled outside the country is about $ 500 billion, according to the Parliamentary Finance Committee.

The reporter of the Parliament’s Financial Committee, Ahmed Al-Saffar, said in a special statement to Al-Ain Al-Akhbariya that it is time to retrieve this money that was stolen years ago.

These funds are distributed between two periods in the history of Iraq, the first before 2003, and the other period after.

For years, successive Iraqi governments have sought to recover these funds, but this has not been achieved, despite the difficult economic conditions that the Iraqi people are experiencing.

And recently, the Iraqi Ministry of Planning revealed a statistic that shows that nearly 10 million Iraqis live below the poverty line.

And the Iraqi Ministry of Planning indicated that it had developed plans and treatments to reduce those rates during the current year.

The ministry’s spokesman, Abdul Zahra Al-Hindawi, said in a statement, that Al-Ain News obtained a copy of it, that “the circumstances that passed in Iraq contributed to the high rate of poverty, as the poverty rate at the end of 2019 was 20%, but with the entry of Iraq into the tunnel of the crisis. The double, the Corona pandemic and the accompanying financial crisis, due to the decline in oil prices, have greatly affected the high poverty rate in the country.   link

DeepWoodz:  IMO…more of a question than a comment….“the remainder in the largest part of it goes to Neighboring countries and private banks, most of which act as tools for those countries” doesn’t this sound like the results of currency swaps? Foreign reserves? So if these other countries have dinar, would it be safe to assume that Iraq would also have large shares of these other currencies?

DavidR:  IMO, that’s what it sounds like to me….for what its worth!……”in addition to the money stored in homes“….and it sounds like dinar holders as well…IMO