KTFA (MilitiaMan & Don961)

  In KTFA 

MilitiaMan: The end game is looking to be upon us. They have entered a state where they need critical recalibrations of economic policies. Think of those policies as being exchange rate oriented.

The IMF has told us they are to change the exchange rate within this fiscal year. That runs out on or before 12/31/2020 imo.

We can show in the Final Article Thread here at KTFA that there is and was a collaboration to devalue the currency to get currency out of the market place. But, keep in mind that that was their intentions for not just the recent short term, but  far longer than just over this last month or so,  it goes back months to years at this point.

They have been working at financial inclusion for quite some time. They tell us that they have or have had 60 trillion IQD in circulation.  That point needs some serious reflection, as it has been a work in progress to get it out of circulation.

We can see now with hind sight what has happened. By what they tell us now we can see they are moving into the next phase and have the support of the IMF..

We now should see after that recent devaluation down to 1460 from 1190 the next phase to kick in and a re-instatement or revaluation to an internationally acceptable currency exchange rate. One that is probably already approved and just about ready to be exposed.

The 2021 budget is said to be in the HOR tomorrow, as it was delivered today after having it voted on by the COM. The theory is that, the 2019 FMLA and 2020 budget will have been used to get the 2021 numbers.. If so, then the numbers would be telling us a very important story..

So, the challenging juncture they are in was do to the devaluation to get more currency out of the market prior to the next phase..

The IMF is giving reassurances that they are there to support their next move. imo. A very welcomed site be sure.. ~  MM

Don961:  International Monetary: We are ready to support reform efforts in Iraq

Saturday 26 December 2020  Baghdad: Morning

The head of the International Monetary Fund’s mission in Iraq, Toker Mirzoyev, welcomed the cabinet’s approval of the draft general budget bill for the fiscal year 2021, while announcing the fund’s readiness to support reform efforts. The Council of Ministers voted to approve the federal budget for the fiscal year 2021, at the extraordinary session held last Monday, headed by Prime Minister Mustafa Al-Kazemi.

Pandemic and oil prices

Mirzoyev said in a statement to the mission received by “Al-Sabah”, Friday: “The Corona pandemic and the sharp decline in oil prices and production have exacerbated economic weaknesses in Iraq,” and pointed out that “due to the acute shortage in financing public finances and the challenges facing the payment of external payment obligations.” “And local, including wages and pensions, must be made a critical recalibration of economic policies in order to maintain the stability of the economy.”

He continued, “We welcome the approval of the Iraqi Council of Ministers to the draft general budget bill for the fiscal year 2021, which, according to our understanding, envisages implementing important financial reforms,” noting that “despite the difficulty of these reforms, along with the reduction of the currency exchange rate that was announced recently, they constitute major steps. The importance of helping to reduce large imbalances in the external balance of payments and public finance, and to ensure economic stability. 

Increase remittances to the poor

The statement clarified that «the Iraqi government has developed plans to significantly increase cash transfers directed to the poor and to enhance health-related spending, which are necessary to mitigate the impact of the Covid-19 crisis on the most vulnerable groups».

He pointed out that the short-term plan should be followed by more subsequent reforms, which include deeper structural reforms, in order to strengthen the resilience of the economy, expand the fiscal space to include the processes of reconstruction and social spending of critical importance, and lay the foundation for higher growth rich in jobs and more inclusive. For everyone in the medium term ».

He declared, “The International Monetary Fund is ready to support the reform efforts made by the Iraqi government at this challenging juncture.”   LINK

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He added, “The draft budget is still up to the General Secretariat of the Council of Ministers to audit it in coordination with a special committee from the Ministry of Finance and the International Monetary Fund to update the Iraqi dinar exchange rate before the end of the fiscal year,” indicating that, “according to government estimates that we have informed about the price of a barrel of oil.” In the general budget it will be between 42 – 43 dollars.

LINK

Twig said: It is known that the monetary mass in circulation is about 60 trillion dinars, which is not available at the Central Bank of Iraq, the banks and the public, and it is a large monetary block compared to the economic transactions of the Iraqi economy and that a large proportion of this block suffers from compactness and therefore this does not help the Central Bank of Iraq in drawing a policy Effective cash calling on  the central bank to delete three zeros or gradual deletion of zeros to make the value of the dinar appear at a higher value and that the processes of evaluation and monetary balance will be formed quickly in the market economy. ”

He added: The monetary mass can become approximately 15 to 25 trillion dinars, and the value of the new dinar converges to the value of the dollar, which facilitates the process of calculation and allows small and new denominations of cash to appear in the money market.

LINK

“The exchange rate of an economy affects aggregate demand through its effect on export and import prices, and policy makers may exploit this connection. Deliberately altering exchange rates to influence the macro-economic environment may be regarded as a type of monetary policy.”

“A member of the committee, Ahmed Hama Rashid, said in a radio interview, “The budget bill has reached the inclusion of the House of Representatives, and according to the bylaws, it is read first, and then it is studied by the Finance Committee and a second reading is read.”

Samson:  Al Rasheed Bank stops the deposits and withdrawals of saving accounts

26th December, 2020

Al-Rasheed Bank announced, on Saturday, that it will stop withdrawing and depositing savings accounts until January 3, due to the end of the fiscal year and for the purpose of implementation only.

The bank’s media office said in a statement received by Shafaq News that “the suspension includes saving accounts only and for the purposes of applying the accounts.”

He added, “The bank’s branches were instructed to deal with emergency withdrawals during the aforementioned period with appropriate flexibility.”  LINK

MilitiaMan:  The stopping of withdrawals and deposits seems to be very interesting in that the timing of it is so close to the end of the fiscal year. The IMF told us that there is to be an expected change to the exchange rate of the IQD before the end of the fiscal year.

Well the devolution was one change, however, it is a change that will not get the country into a market economy. The White Papers are about getting them into a market economy. So, a big change is coming and this halting if you will of savings accounts  in respect to withdrawals and deposits tells me that they just locked up plenty of that chunky money I mentioned in an earlier post today.

So those that are wanting to game the newer exchange rate dollar ratio, can’t anymore until next year..  The thinking is too, is that this next fiscal year starting as of 01/01/2021 or for the first banking day being 01/03/2021 may or should be with a new mechanism that will require smaller denominations, just like the told us.. IMO ~ MM

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Economic expert Raad Twig called , the central bank to delete the three zeros from the dinar to strengthen the local currency.

Twig said: It is known that the monetary mass in circulation is about 60 trillion dinars, which is not available at the Central Bank of Iraq, the banks and the public, and it is a large monetary block compared to the economic transactions of the Iraqi economy and that a large proportion of this block suffers from compactness and therefore this does not help the Central Bank of Iraq in drawing a policy Effective cash calling on  the central bank to delete three zeros or gradual deletion of zeros to make the value of the dinar appear at a higher value and that the processes of evaluation and monetary balance will be formed quickly in the market economy. ”

He added: The monetary mass can become approximately 15 to 25 trillion dinars, and the value of the new dinar converges to the value of the dollar, which facilitates the process of calculation and allows small and new denominations of cash to appear in the money market.  LINK