Samson: Economist: The proposed diversion of the dollar price increase in the budget is intended for these two reasons
12:20 – 19/12/2020
The economic expert, Abdul Rahman Al-Mashhadani, confirmed, on Saturday, that the leakage of the draft budget, including the proposal to raise the exchange rate of the dollar is intended and has two goals, likely to increase the exchange rate for the next year to reach 160 thousand dinars in the local market if the parliament approved the government’s proposal.
Al-Mashhadani said in a statement to / the information /, that “the leakage of the budget bill that includes the government’s proposal to raise the exchange rate of the dollar is intended and has two goals. The first is to feel the pulse of the street and the second is to benefit speculators and influential people from the price difference.”
He added that “raising the dollar exchange rate will burden citizens and people with limited incomes, and will harm their economic condition, through the high prices of foodstuffs and other necessary commodities.”
Al-Mashhadani suggested, “The rise in the exchange rate for the next year to reach 160 thousand dinars in the local market if Parliament approves the government’s proposal.” LINK
MilitiaMan: “The first is to feel the pulse of the street and the second is to benefit speculators and influential people from the price difference.”
MilitiaMan: That right there tells me they have an opinion and a plan to change the situation, the street won’t stand for being taken advantage of for very long! Not at all… Hence the heavy citizen presence today and the surrounding the CBI with troops if I see that correctly. Lets not forget that K has been on fire today on Twitter and talking about Reforms. Bold moves and bold actions need to be done now without hesitation.. I couldn’t agree more.. imo ~ MM
Samson: An Intensive Deployment Of “Law Enforcement” Forces In Front Of The Central Bank
An intensive deployment of ‘law-keeping’ forces in front of the Central Bank, Al-Firdous Square, and in front of the Ministry of Electricity and the Iraqi Engineers Syndicate building, and the reasons are not known yet. LINK
DeepWoodz: Imo…Now I don’t know about yuuzz guyzz…but this is INTEREEEEESTING!!!
What a SHOW!!!
Pattycakes77: Tomorrow looks exciting
JaimieO: I have a question. Knowing that “it cannot fail with the citizens,” doesn’t it seem rather dangerous for them to fill the streets with all this dis-information about lowering the value of the IQD, etc??? This stuff is hard enough for the well read, well educated folks to understand. How to they expect their poor average Joe Citizen to sort this all out with them filling their heads now with bad info??? Just curious… IMO
MilitiaMan: I don’t think K (Kazemi) has the opinion of devaluing the currency. That would be to laugh at the people.. He says he has adopted the White Papers.. The White Papers were not about devaluing the currency. They are about items to enhance the economy by going to a market economy. Where they can create opportunities for the people.. In doing so, they’ll create the environment for to build infrastructure and make a a better place to create exports that may be competitive in the world. K’s strong language at a time we see now is very good.. imo~ They are to not hesitate and they should not fear their place close to those that are not for the reforms within the Council of Ministers.. The meeting tomorrow, should be very telling.. Very.. imo Those reform papers are I’ll bet full of the data we look for from 2019 FMLA and the 2020 Budgets… imo ~ MM
Samson: Central Bank: Change the value of the Iraqi dinar will be one-time only and will not be repeated
19th December 2020
Economy News publishes the text of the Central Bank of Iraq’s statement on the change of the dollar’s exchange rate, and it says
During the last months of this year, intense deliberations took place with the Prime Minister, the Minister of Finance and the Legislative Authority, regarding the general economic situation and the financial crisis that the public finances are going through due to low oil prices and production, and the economic and health challenges
The Board of Directors of the Central Bank held a number of meetings, some of which hosted the Minister of Finance for the same purpose
The Central Bank of Iraq would like to show the following
1- The structural distortions in the Iraqi economy impoverished public finances and restricted the ability of reform sought by the government and the Ministry of Finance. It is not a coincidence that the financial situation is this bad, nor is it the result of the current or the previous year, but unfortunately it took root more than a decade and a half ago due to the policy leadership of the economy and the preference for political thinking and the priorities of politicians over economic thought and development priorities and the rules of the relationship between economic policy on the one hand and fiscal and monetary policies.
On the other hand … the fiscal policy lagged behind, and the monetary policy was busy repairing the outputs of the confused fiscal policy
2– The subordination of the economic and financial policy to the aspirations and concerns of politicians resulted in the last acceptable models of financial management in Iraq, and the role of that administration was limited to the distribution of oil resources to life-sustaining requirements such as salaries and operational requirements, and the Ministry of Finance did not address its roles and leadership in economic affairs. In addition to the fact that it lacked many economic and financial information that could facilitate it and the decision-maker in the country to direct short and medium-term goals. This calls for an active approach to build economic and financial databases that facilitate decision-making and serve forecasts
3– Because of all these conditions, the Central Bank had no choice but to intervene on more than one occasion to support public finances and save critical public spending requirements .. However, this does not mean that these interventions remain open without restrictions or endings
4– On the other hand … the Central Bank understands the difficulties facing the reform intentions that the government is heading to undertake, but this does not prevent any steps that the monetary authority can take with effective steps to implement reforms that inevitably affect the institutions of the financial authority, especially the effective collection institutions. Customs, taxes, and other public collection institutions, and that spending be leaned and rationalized, all of which depends on the political will of the supreme state institutions that support the direction of the financial authority to achieve this
The government needs to support the vulnerable groups that will inevitably be directly affected, especially by any measure to change the exchange rate
5- The legislative authority will have an important role in supporting the direction of the Central Bank to adjust the foreign currency exchange rate, as failure to take such a decision may make us forced to take difficult decisions that may put Iraq in a situation similar to what happened to neighboring countries
It must also be emphasized here that this change (reduction) in the value of the Iraqi dinar will be one-time only and will not be repeated, and the Central Bank will defend this price and its stability with the support of its foreign reserves, which are still at solid levels that enable it to do so
6- The financial crisis that Iraq was exposed to due to the Corona pandemic and the resulting deterioration in oil prices and the decline in oil revenues, this led to a large deficit in the general budget and forcing the Ministry of Finance to borrow from banks and re-deduct them with the Central Bank in large sums, in order to pay salaries And meeting other spending needs related to services provided to citizens, and the continuation of the current exchange rate, which is not in any way commensurate with the rates of exchange rates in other countries, has become a major obstacle to conducting real development and enhancing competitiveness for local production, which prompted the Central Bank to think seriously about responding to financing requirements.
Budget at the exchange rate that allows providing adequate resources to cover these needs and ensure the smooth payment of salaries and the critical requirements of government spending, and in order for the bank to avoid depleting its foreign reserves, which represent the main financial leverage for monetary stability in Iraq, And his keenness to support the public finances, as he is the advisor to the government and responsible for keeping its accounts
Based on the above, the Central Bank of Iraq decided to amend the foreign currency exchange rate as follows
1450 dinars per dollar is the purchase price of foreign currency from the Ministry of Finance
1460 dinars per dollar the selling price of foreign currency to banks
1470 dinars per dollar is the selling price of foreign currency to the public
We ask the Almighty to take the hand of our country and our people because of the goodness, payment, and honor that it contains
The Central Bank of Iraq – December 19, 2020 LINK
MilitiaMan: “It must also be emphasized here that this change (reduction) in the value of the Iraqi dinar will be one-time only and will not be repeated, and the Central Bank will defend this price and its stability with the support of its foreign reserves, which are still at solid levels that enable it .to do so”
MilitiaMan: We all know that they are not going to add taxes of 10% on many items: fuels, hair cuts, dates, etc.. lol The plan is to go to a market economy not back to the stone ages.
That would create a revolution that would bring the country to her knees in no time. This is clearly a message to all imo that needs to be taken carefully and thoughtfully.
Do we really think that the CBI had a hand in this devaluation? No. They have told us directly that the GOI is the owner of the currency.
The GOI are the ones that created an environment to get as much currency off the street as possible, imo. The CBI would know that. They were a part of the meetings with the GOI at Salih’s house. That was back around the 8th of this month.
Notice they kick the can with the salaries and the budgets? Then we today see that the Kurds have signed on to the 2021 budget and are yet still discussing the 2020.. lol That is what they said.. imo. Anyway, they too would not be happy to sign off on a devaluation. Not a chance.
The reduction of the value of the Dinar is at the first glance looks to be a devaluation, however, if we reduce the three zeros then they get a number that looks like this for instance.. 1470 = 1.47.
To defend a one time exchange rate down to 1470 is not going to be in the citizens benefit.. But, by reducing the three zeros one time and to defend (market intervention) it is in their favor and ours.
Not to mention every man women and child or country that has it. There is no way that the G7, et al would have supported an exchange rate of a one time devaluation to go into a market economy.
Saudi Arabia didn’t just open borders to be a part of that. They could have done that long ago, yet, didn’t until now.. That is a fact imo..
The CBI didn’t print more large denominations for crying out loud to defend a devaluation. They printed new small category notes. That is what they need to defend!!
They even say they have machines to count them now. The citizens know that. As does the Minster of Finance the Minister of Trade, Planning, etc.. All are fully aware of the plan and they have that imo in writing..
So, if we look at the facts of what we can see in the Final Article Thread we can see the picture far more clearly. The meeting tonight into tomorrow about the 2021 budget should have everyone’s attention!!!
The expectation on the street is not about devalue but, about being on the street surrounding the CBI in expectation of a revaluation and they want it.
They want the Purchase Power they have been promised and deserve! imo Lets see what the days bring, but, imo, this is not what is looks like on the surface.. We shall see.. ~ MM
Zeeman: is this the confusion that frank said before the rv?
Mryantodd: I’ve been confused since I started watching this in 2009
Don961: Before launching the new dollar rate, find out how much you will lose from your salary and how much it will become actual?
2020-12-19 Yes Iraq: Baghdad
The Ministry of Finance is preparing to officially announce the application of the new exchange rate of 1450 dinars to the dollar, which was considered an alternative to the deduction of salaries, as the reduction of the dinar will lead to a “hidden” deduction from the salary due to the devaluation.
The Minister of Finance, Ali Allawi, said in televised statements, that “we will issue a statement to raise the dollar exchange to 1450, while indicating that there are no appointments in the next year except for those announced at the end of this year.”
Reducing the exchange rate to 1450 dinars per dollar, with salaries remaining unchanged, will reduce the real income for the whole community, that is, the purchasing power will decrease at the same rate as the reduction in the exchange rate, and this is known as the monetary illusion, that is, the employee still gets the same income, with purchasing power Less, in other words: keeping cash income unchanged and reducing real income (purchasing power).
The reduction will be 23%, meaning that the salary will lose 23% of its value, so the actual salary will be only 77% of the real figure.
Meaning, when you want to know the value of the salary when applying the reduction, then it is multiplied by the number 0.77, so the salary of 600 thousand dinars, its real value is 462 thousand dinars, and the salary of one million dinars, its real value is 770 thousand dinars, and so on. LINK
MilitiaMan: Again they have not come all this way to devalue, imo.. It makes no sense to anyone. Especially the international markets.. It is laughable.. imo They are telling us why they wont devalue, imo.. It harms the citizens The monetary illusion is that they are going to 1450 when they reduce the three zeros, the illusion goes away and purchase power is still be powerful imo.Why would the FM be bragging about a devaluation? Makes one shake their head.. Big time. So when reducing the zeros, gets the real income and purchase power!! imo..~ MM