Netglobal: So I guess everybody knows the 1460 to 1 rate is now showing on CBI.iq. It is what it is and it is for real.
Dinarstar: i think they are going to release this low…to draw as many as cheap as they can…then allow it ti float up as market allows…remember the rat trap
Pearle: someone was flooding the market with oil, it dropped to $30.00. that was corrected, now its back to 50$ plus…so why would they drop the price of the dinar. does it make it cheaper to invest in Iraq. We are part of their investment. we stopped buying dinar because we been buying dong…just thinking out loud. i hope by end of day something positive happens
RVAlready: I think this is just a head fake. It makes no sense as a policy move.
Yada: Agreed already,,,the drop in the value of dinar does have an affect on the reforms/oil equation. It makes it harder to do the reforms short of a reissue.
Rock1941: yada aren’t we thinking what they release there will look nothing like what we see here, maybe in sync with the relief pkg. who knows
Yada: What we see here will be the effect of what they did in Iraq. That is the scheme with all the middle east deals, the various corporations and countries having pending agreements. Doubt very much they would of partnered with iraq if we had to wait for the rate increase to start AFTER their economy grows. The RI will release the contracts set up and then the economy grows.
Yada: The article of them lowering the value is of no consequence in the expectation of them RI their currency. As Tony stated on Friday, we are in the midst of motion to that goal now
RVAlready: I think the easiest thing for us is to sit back and watch. I doubt you can analyze this in advance.
Yada: No but we can access their actions and that is where much of what is expected is coming from.
RVAlready: I expect this will just pop out of nowhere. I don’t think they want anyone to figure this out.
JCNoble: 10 days left in 2020, RV needs to start quickly.
Tishwash: Devaluation and its effects
When we follow the world’s economies, there are economic experiments that prove the devaluation of the local currency in order to achieve economic gains, and have actually achieved success in this matter and have become economic blocs with their weight in the world, as this timely trend has led to major gains for all operations Economic.
In Iraq, we can say that the devaluation of the currency can be described as the right one that leads to reducing the budget deficit and encouraging the national industry, which has been in decline for decades.
The decision to devalue the currency when compared with other countries adopted the same trend we find that it is completely different from that of Iraq, as such the decision requires a national industry capable of meeting the market needs and competing with the importer who will be offered in the markets at high prices.
This decision has had positive results in global economies, but in our country, it needs a stand by all stakeholders that must work towards supporting national industry and supporting the local product.
Here, the right environment and full facilities must be provided to support the directives for a national production that meets the market needs of various products that must be manufactured to the specifications Global.
Such a decision, despite its advantages for productive economies, requires that we have factories, a national industry and self-sufficiency in order for the consumer to turn to the national product, as the price of imported goods will be very high.
Today’s national product is relatively available and relies on imported raw materials, and here it is preferable to sell cash with controls, and the sale of hawara with controls as well, i.e. working on the concentrations where the exchange rate change affects.
When we look at the Japanese and Chinese experience that adopted the devaluation of the currency, it produced positive results that created an effective economic bloc worldwide, and came to support its production National.
Now that the decision to devalue the currency has become a reality, we must recognize the need to support the national product and the projects under construction to speed up the process of national production to create national products that will spare the citizen from Imported. link
Tishwash: Vice: 3 red lines in the 2021 budget (12/21)
MP Abdel-Khaleq Al-Azzawi confirmed, on Sunday, that there are three red lines in the 2021 budget.
Al-Azzawi said in an interview with “the information”, that “the 2021 budget has not been voted on by the cabinet until now, and its arrival in the parliament within 24-48 hours from now depends on the resolution of its session this night.”
He added, “Regardless of all the contents leaked to the 2021 budget, there are red lines that the House of Representatives will not accept to pass, the most prominent of which is the reduction in salaries or allowances for simple employees or allowing an unprecedented rise in foodstuffs due to the increase in the exchange rate in addition to the necessity of a real failure of the expenditures of all ministries and agencies. Unnecessary, restructuring the national economy, studying difficult options in the face of corruption, and maximizing non-oil revenues, especially border crossings.
He pointed out that “it is not reasonable to let 40 million Iraqis face the flames of market prices because of the increase in the exchange rate of the dollar, especially since 90% of goods and materials are imported, and this is what we repeatedly warned against and talked about its danger to the national economy.”
The central bank had officially decided to raise the dollar exchange rate to 1450 dinars per dollar in an attempt to aid the Iraqi economy and address the acute financial crisis. link
Tishwash: Comment from the US Secretary of State on the bombing of Baghdad (12/21)
US Secretary of State Mike Pompeo commented, on Monday, about the recent bombing of the capital, Baghdad.
“The Iranian-backed militias attacked again blatantly and recklessly in Baghdad, which resulted in the injury of Iraqi civilians,” the US Secretary of State said in a blog posted on “People” (December 21, 2020).
“The people of Iraq deserve to be prosecuted for these attackers. These violent and corrupt criminals must stop their destabilizing actions.” link
Tishwash: The Minister of Finance talks about three dollar exchange rates … I stood in front of Parliament seven times
The Minister of Finance, Ali Abdul-Amir Allawi, explained the stages of selling the dollar, starting with the Ministry of Finance, reaching the citizens, while noting that military expenditures increased after the end of the operations against ISIS.
Allawi said in a televised interview broadcast by the official channel, followed by “People”, (December 19, 2020), that “in Iraq there are 3 exchange rates for the dollar, the first of which is the sale of the dollar by the Ministry of Finance to the Central Bank from oil exports in exchange for 1,450 dinars per dollar. “.
He added, “The other price is the sale of the dollar by the central bank that feeds the market with dollars, so it will be offered by a small margin, whether to the importer or to those who wish to transfer money abroad,” noting that “the third price is the market price, which has nothing to do with the central bank,” He is asking the dollar from the local cashier, and this will be more than the rate of the central bank and auction clients, and the rates are sometimes large, and this is the difference that citizens talk about.
And, “If the market stabilized at 1500 dinars, it is not a large margin, and at this number I think that it is a kind of stability.”
He pointed out that “there are dozens of initiatives under the umbrella of the prime minister, and we should not focus on some numbers without knowing the details. Expenses have increased after the events of ISIS, especially in the military establishment. There is an inflation in the budgets of the security ministries during that period, and today we are trying to reduce military expenditures, as There are hundreds of thousands of members of the security forces, and we cannot cover their salaries, and there is a study to address this matter. ”
The minister said, “There is a budget deficit of 58 trillion dinars, and we are looking to find revenues and immediate solutions to complex issues for years and need to be dismantled, and these issues are not resolved overnight, and anyone who believes there is a magic wand to solve the crisis should please give an alternative to the solutions presented to get out of the crisis.” Current “.
Regarding the statements of some parliamentarians about questioning the minister, Allawi said: “As for interrogation, it is the right of the House of Representatives, and we have nothing to hide and we believe in transparency. Political, and I do not belong to any political party. ”
And Abizaid: “I stood before the House of Representatives seven times, during the past months, whether with the subcommittees or the entire parliament.”
Allawi said, earlier today, that the government is taking measures to create a kind of balance in the price scale, stressing that the segments dependent on local commodities will not be affected by this step.
Allawi added in an interview broadcast by the official channel, followed by “People” (19 December 2020), that “taxes have not changed until now, but gradually we aim to raise prices, an example of this (fuel) in order to create a balance in the price scale that is parallel to world prices. Pointing out that “the state seeks to preserve the vulnerable segments.”
He explained that “raising prices will not be tangible to citizens dependent on local goods, but without a doubt it will be tangible by other segments of the population dependent on imported goods.”
Allawi attributed the measures directed towards employees in the new economic decisions to “the fact that they constitute the largest part of the size of the budget,” indicating that “a hundred trillion dinars will become the deficit in the budget if we remain without any proactive steps.”
The Minister of Finance said: “The street has become understanding of the current situation in the country,” ruling out the idea of “exploding.”
He pointed out that “the decision to reduce the dinar against the dollar was not taken individually, despite its harshness,” denying “the existence of job grades in the 2021 budget, with the exception of degrees that contain previous decisions.”
The Minister of Finance denied that the decision to reduce the exchange rate of the dinar against the dollar affects the “poor” vulnerable groups.
Allawi said, “The vulnerable (poor) groups are not directly affected by the decision to reduce the exchange rate of the dinar, because this depends on their food basket, in addition to the fact that the rent of houses is not affected by this decision, as they are assets priced in the Iraqi dinar.”
He added, “These groups do not have private transportation, and therefore they are not affected by the issue of raw materials.”
He continued, “There will be great incentives in the next fiscal budget, to support such groups and reduce any potential effects on them.” link