KTFA:
Samson: Adviser to the Prime Minister determines one option to reduce the dollar exchange.. He predicts the fate of the 2023 budget
07/25/2023 23:16:43
The Prime Minister’s Advisor for Economic Affairs has identified one option to reduce the dollar’s exchange rate against the Iraqi dinar, while predicting the fate of the 2023 budget.
Haitham al-Jubouri said; For the program {Alstra} broadcast by Al-Furat satellite channel tonight, that: “The financial equation in the country is the one that controls the exchange rate of the dollar, and if we want to strengthen the dinar and convince investors abroad to invest in the country gradually, the dollar begins to decline, i.e. encouraging investments and increasing non-oil revenues will raise the level of value of the dinar.
He added, “The Iraqi people are increasing by one and a quarter million people annually, and if we do not remedy the situation and make plans, we will actually suffer in paying salaries during the coming years. The future of future generations cannot be mortgaged to fluctuating oil prices.” Al-Jubouri explained, “In Iraq, if thinking about the economy remains in the same current mechanism, we will have mercy on the current exchange rate, and the white paper remained ink on paper without brains;
With regard to the federal budget for the fiscal year 2023, al-Jubouri said, “It can only be approved by the presence of a new government and not necessarily the same approach as the current government. It may take austerity for the sake of the article, but if the current government remains, we will proceed with setting the doors of law.”
And he continued, “Prime Minister Mustafa Al-Kazemi is the most president who followed up on the energy file in the country, and Iraq spent nearly $6 billion on the electricity sector in 2021, and there was supposed to be a levy for electricity that covers the ministry’s costs completely, but it does not currently reach 15%.”
Al-Jubouri went on to say, “The Federal Court’s decision that the oil and gas law in the Kurdistan region is unconstitutional is a good step to negotiate with the federal government, and the Office of Financial Supervision is responsible for following up on the revenues generated from the region’s oil, while the advances that the region currently receives are deducted from its share in the budget.”
Regarding the economic pressure paper on Turkey after the criminal attack against civilians in the Bazakho resort, al-Jubouri said, “It is possible that the government has now begun to escalate. There is a complaint submitted to the Security Council and there is an intention for the presence of Iraqi forces in the areas adjacent to the Turkish border.” He stressed, “the need to arrange the situation before the boycott and to find an alternative to import, as the value of our imports from Turkey exceeds 20 billion dollars, which is higher than China.”
Regarding automation, Al-Jubouri commented, “Iraq needs the correct automation of the border crossings, and we need other measures to make the automation step successful,” noting “Al-Kazemi’s failure in the financial file, but in general he acted wisely and got Iraq out of major crises.”
With regard to the political file, al-Jubouri stressed, “The framework is keen on the unity of the national ranks by nominating Muhammad Shia al-Sudani for the position of prime minister, and I think that his personality is acceptable to all parties and he is known for his integrity, and so far most of the blocs are welcome.
Al-Jubouri concluded, “The two Kurdish parties are both insisting on their candidates for the presidency, and the nomination of Al-Sudani will lead to the acceleration of deciding the position of President of the Republic.” LINK
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Tivon: Let’s talk about one section in this article regarding the dollar and how Iraq contemplating as to how they can lower the demand of the USD to strengthen the IQD by bringing in investors. This is in their view a strategic way at enhancing the national currency. At least in a local sense of the objective.
On their own this is the logical solution to bring their currency up to par with the USD. Supply & Demand determines the value of many things and their longevity in any market. Not just currency. So what can the investors put their money in that would ignite more interest in the IQD?
Well we know Supply and demand are influenced by a number of factors, including interest rates, inflation, capital flow, and money supply. The most common method to value currency is through exchange rates. The two main exchange rate systems are fixed rate and floating rate systems.
Early currencies were “commodity money,” meaning they derived intrinsic value from the precious metals they were made of. However, the impracticality of commodity money created the shift towards “representative money” – money that lacks intrinsic value but is backed by its ability to be traded for a physical commodity which can be anything from Export/Import, Clothing, Cars, Shoes, Hats, Houses, etc.
The most notable use of representative money is under the gold standard, where each country’s currency is tied to a fixed amount of gold. But we are not on a gold standard. So the commodity or representative of something with value are material things or products that are bought with that money. The local/international market.
So if those investors come in and start investing in banks, stores, schools, companies, businesses, stocks, shares, energy, oil, real estate. etc. I’m sure this will drive up the value of the IQD over time. But, we are not concerned with this aspect of Iraqs plan to come out gradually with a rate change on the way to 1:1 parity. Petra covered the reason why this is not feasible as it will go against guidelines by the IMF.
And this would defeat the purpose of the EFSL that is designed to address the immediate concerns of the overall economy. Because remember people keep in mind what has to happen before November. Do you know what that is? The adoption of ISO-20022. Why?
Because systems like the SWIFT, EBA-(European Banking Authority), and Target2, will have already migrated to ISO-20022. This is a digital system where only currency backed by natural assets can operate. No fiat.
Now does it make even more sense as to why the CBI mandated that all banks in the country be on their new platform by August 15th? This new system is way more faster at handling transactions, inflation, fluctuations, and any volatile market at extreme speeds no matter the volume of money that is moving.
Again, the goal is to phase out paper money or reduce it greatly. But I still think it will have a place somewhere. Iraq is on the SWIFT. Will they join the BRICS Nations that will use the CIPS system?
Probably some time in the future. But I am sure they have to have an international currency backed by gold/silver and at least be apart of the WTO first.
Guys, SWIFT is estimating that by 2023 79% of high value payments in international trade by a volume of 86% will be done with the ISO-20022 system. That’s basically all modern countries.
You think Iraq has until November to jump on board? Absolutely not. I have the link to that information from SWIFT. IMO
Wagmaster: The u.s. dollar needs to be a non factor and the dinar must be the one and only currency used.
Samson: A new parliamentary movement to restore the price of the dollar to its previous era
26th July, 2022
On Tuesday, the representative of the National Approach Alliance, Hassan Al-Asadi, indicated the possibility of reducing the dollar exchange rate in the new general budget, stressing that there is a parliamentary movement to return the dollar exchange rate to what it was previously.
Al-Asadi said in a statement to “Al-Maalouma”, that “there is a parliamentary move to reduce the dollar exchange rate in the new budget to its previous price.”
He added that “all the justifications adopted by the caretaker government regarding changing the exchange rate of the dollar had negative economic effects on the Iraqi people.”
Al-Asadi pointed out that “lowering the dollar exchange rate should be a priority for the next government,” noting that “Iraq is going through a very bad economic situation as a result of the caretaker government’s confusion and its raising of the dollar exchange rate.” LINK
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Billuke: “Previous price”….”previous era”. “Does she or doesn’t she….only her hairdresser knows for sure.” imo
Tivon: These people have to be clueless. Notice how he doesn’t specify what year? Because if he is referring to the 2022 Budget he would show his hand. As we know they don’t even want to open one. He can’t say the 2023 Budget because Iraq doesn’t have time to wait that long to address or adjust the rate of their currency thanksto SWIFT.
When they say next government they are basically saying 2023. This is what I would consider a disingenuous disinformation piece. They keep referring to Al-Kazemi as a caretaker government. As if he doesn’t have any authority to address the exchange rate now. Especially when those 100 deputies have already signed up to do so.
Obviously they were not waiting for any new government before they signed. They write these articles only with the Iraqi citizens in mind. Because the 2023 Budget will be for all the new projects. The EFSL has to address everything this year because it will be of no use beyond 2022.
So adjustors wages and salary that the Ministry of Finance appears to be doing Im sure is tied to the new oil contracts as well. Because any money left over will go towards the new government and budget.
You know what I noticed is we assume these people know everything about what is going on because that’s their backyard. But they are not on any websites constantly keeping up with the volume of information that conflict with their narrative of what needs to be done with the dollar. Because these are older people that are accustomed to an archaic system that is no longer in play. Especially when you are talking about the ISO-20022.
Didn’t the Federal Reserve come out with a report on the challenges facing cross border payments as being slow and archaic? Due to high fees, limited accessibility and the friction of this problem includes currency exchange, legal regimes, and technological issues.
Well what is one thing that can solve all of these problems? Digital Currency/XRP/XLP. Which is why countries are being linked via The World Bank & US Treasury that have already adopted the new ISO-20022.
Digital Currency or Crypto Asset= XRP for exchange across borders (X-borders) and exchanging value between all markets and asset classes. XRP will be used to balance trade accounts between Sovereign entities or countries, via Treasury & Central Banks.
What is Iraq trying to set up? A Sovereign Fund correct? I will comment more on this. I am very busy.
Starting Monday, Zimbabwe is selling one-ounce, 22-carat gold coins bearing an image of Victoria Falls, its world-famous natural wonder. Each has a serial number, comes with a certificate and will be sold at a price “based on the prevailing international price of gold and the cost of production,” the central bank said in its announcement on July 4.
The coins will be tradable both in Zimbabwe and overseas, the bank said, and can be exchanged for cash. The goal is to reduce the quantity of Zimbabwe dollars in circulation to eventually restore that currency’s value.
Tell me this does not sound like what Iraq will do to address the paper currency in some other form? Now will this be affordable to the average citizen? Not sure. As only institutions will be able to afford it at its current price. So there’s still room for other methods. IMO
