A new step may fluctuate the dollar exchange rates… What do economists think?

Information / private… Today, Sunday, the economic expert, Abdul Rahman Al-Mashhadani, explained the impact of the approval to enhance the dollar balance of 10 banks on exchange rates in local Iraqi markets, while explaining the repercussions of the decision.

Al-Mashhadani said, in an interview with the “Al-Ma’louma” agency, that “visiting the dollar balance of ten banks will be one of the factors that will reduce the pressure on the dinar, because a portion of the financial transfers that pass through the electronic platform are rejected for some reason or not,” indicating that “the past few days It witnessed the rejection of 80% of foreign remittances.”

He added, “The pressure will also be eased on the dinar, because the transfer transactions, or the parties to whom they are transferred, instead of being audited by the US Federal Bank, will be audited by JP Morgan,” pointing out that “the latter’s scrutiny is more severe than the Federal Reserve Bank.”

The economic expert explained, “These banks have relationships, as partners, with international banks such as Al-Qantar National Bank, Capital Bank, and Kuwait Finance Bank, in addition to the Kuwait National Bank,” noting that “it is true that these banks are Iraqi, but the entry of the founding partners of these international banks organized “To them.”

Al-Mashhadani stated, “The transfer mechanism will pass without the Central Bank of Iraq, especially after transfers were delayed by 8-20 days. However, using this method, it is possible to pass financial transfers within a day or two.”

Earlier today, a government source revealed an Iraqi-American agreement to enhance the balance of 10 banks in dollars in light of the recent meetings of the Central Bank with the American side, five of which were through Citibank, and the other five through JP Morgan.

During the current period, the exchange rates of the dollar in the local markets are witnessing a significant increase, as the exchange rate of 100 dollars reached more than 164 thousand dinars, in light of large sales to the Central Bank of Iraq, on a daily basis.

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New negotiations between Baghdad and the region to pass the oil and gas law

Information / Baghdad… On Sunday, the representative of the Patriotic Union of Kurdistan, Nermin Maarouf, revealed the existence of a new round of negotiations between Baghdad and Erbil to resolve the outstanding differences between the two parties and reach long-term strategic agreements.

Marouf said in an interview with the Maalouma Agency, “Ending the disputes between Baghdad and the center regarding employee salaries, as well as focusing on legislating the oil and gas law.”

She added that “the lack of consensus between the political blocs is the main reason for delaying the approval of the oil and gas law,” stressing “the necessity for the two parties to reach long-term strategic agreements through which the oil and gas law will be approved.”

She continued, “The oil and gas issue and other issues are still thorny between the two parties, and we hope to reach final agreements regarding them.”

The representative of the Kurdistan Democratic Party, Sharif Suleiman, confirmed to “Al-Ma’louma” that “the oil and gas law is still with the formed government committee for consideration,” pointing out that the Kurdistan Region submitted a law proposal to the formed committee.

Almaalomah.me

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New details about the Iraqi-American agreement regarding the dollar and the inclusion of 10 banks by enhancing their balances

Shafaq News / An Iraqi government source revealed, on Sunday, new details regarding foreign transfers and enhancing bank balances in dollars.

The official Iraqi News Agency quoted the source as saying, “In light of the recent meetings of the Central Bank with the American side, the number of banks that can directly boost their dollar balance has become ten banks, five through Citibank and five other banks other than the first through Citibank.” JP Morgan.

The source pointed out that “the number of banks whose balances in Chinese yuan will be enhanced through the Singapore Development Bank will become 13 banks.”

The source added, “Two banks will have their Indian rupee accounts with the Singapore Development Bank increased, and other banks will be added during the next two weeks.”

Yesterday, Saturday, a government source revealed that intensive meetings took place during the past few days in Abu Dhabi between a delegation from the Central Bank of Iraq and the American side responsible for foreign transfer operations to cover imports, indicating that the negotiations culminated in a number of decisions and mechanisms that contribute to facilitating special procedures. External transfers related to imports through the foreign currency sales window.

Shafaq.com

Kurdish expert: An atmosphere of optimism and seriousness prevails in the negotiations in Baghdad and Erbil regarding the region’s oil

Shafaq News / The Kurdish oil expert, Govted Sherwani, confirmed on Sunday that an atmosphere of optimism and serious intentions prevails in the dialogue between Baghdad and Erbil to reach an agreement on the Kurdistan Region’s oil file and the nature of the joint mechanism for its management, which has become a necessary issue because it affects Iraq’s revenues, especially with the rise in global crude prices.

Sherwani said in an interview with Shafaq News Agency, “The visit of the Federal Minister of Oil and his accompanying delegation today to Erbil reflects the seriousness of the Iraqi government, especially with the presence of a delegation that includes administrative and technical leaders in the ministry. This means that the tactical, administrative and financial aspects of resuming the process of exporting the region’s oil will be talked about.” “Which we hope will happen as quickly as possible.”

Regarding the dispute between the two sides, Sherwani explained that “the dispute between the two sides revolves around the vision and perspective of the oil law, as the vision in the region is based on strengthening the reality of the federal status of the Kurdistan government, the institutions present in it, and the constitutional status.”

He added, “While the vision in Baghdad is moving towards centralization, and according to Article 112 of the Constitution, it guarantees clear participation between the federal government and the oil-producing regions and governorates, this article is supposed to be taken into account clearly in distributing the tasks and responsibilities of managing the oil file, which we hope will be addressed professionally and practically.” On political and partisan influences.

Regarding the cost of oil production in the region, Sherwani said, “The estimates that were placed in the federal budget for oil production and transportation are $12 per barrel for production, and $7 for transporting one barrel, while the estimates presented by the Ministry of Natural Resources in the region amounted to $24 for production and $8.” For transportation, and these expenses are normal, given that the entire process of oil production and transportation is managed by foreign private companies, some of which are local, and these companies have operational and investment expenses.”

He pointed out that “these numbers are realistic and close to what is paid to similar foreign companies contracting with the Federal Ministry of Oil within the so-called licensing rounds.”

Shafaq.com

Moody’s joins Fitch and lowers its outlook on America’s credit rating

Moody’s lowered its US credit rating outlook to “negative” from “stable” citing a large fiscal deficit and low debt sustainability, a move that immediately drew criticism from President Joe Biden’s administration.

This came after Fitch lowered the sovereign rating this year, a step that came after a bitter political debate that lasted for months over the US debt ceiling.

Federal spending and political polarization were growing concerns for investors, contributing to a sell-off that pushed US government bond prices to their lowest levels in 16 years.

“It is difficult to disagree with this logic, with no reasonable expectations for financial consolidation any time soon,” said Christopher Hodge, chief economist at Natixis. The deficit will remain large…and with interest costs taking up a larger share of the budget, the debt burden will continue to increase.”

“Continued political polarization” in Congress increases the risk that lawmakers will be unable to reach consensus on a fiscal plan to slow the decline in debt sustainability, Moody’s said in a statement.

“Any kind of significant policy response that we might be able to see to this decline in financial strength probably won’t happen until 2025 because of the reality of next year’s political calendar,” Moody’s Senior Vice President William Foster said in an interview with Reuters.

Partial government shutdown:

Republicans, who control the House of Representatives, are expected to issue a temporary spending measure on Saturday aimed at avoiding a partial government shutdown by keeping federal agencies open when current funding expires next Friday.

While Moody’s changed its outlook indicating the possibility of a downgrade in the medium term, the agency maintained the long-term credit rating and the unsecured rating at “Aaa”, attributing this to the credit and economic strengths of the United States.

Immediately after Moody’s issued her statement, White House spokeswoman Karine Jean-Pierre said that the change “was another result of the extremism of Republican representatives and their failure to do their job in Congress.”

“While Moody’s statement maintains the US rating at AAA, we disagree with changing the outlook to negative,” Deputy Treasury Secretary Wally Adeyemo said in a statement. The American economy is still strong.”

Moody’s decision also comes at a time when the support rate for Biden, who is seeking re-election in 2024, has witnessed a sharp decline, according to opinion polls.

Moody’s move will also increase pressure on Republicans in Congress to move forward with funding legislation to avoid a partial government shutdown.

Moody’s had warned – at the end of last September – of the risk of closure threatening government institutions, and that it would have a negative impact on the credit rating.

Moody’s said at the time that the potential closure highlights the weakness of institutional strength and governance in the United States, and considered that a prolonged closure would lead to the disruption of the American economy and financial markets.

Rawabetcenter.com

The US Central Bank agrees to strengthen 5 Iraqi banks with dollars

A government source revealed, today, Saturday, that the Central Bank of Iraq agreed with the American side to enhance the advance balance of 5 Iraqi banks in dollars.

The source told the official agency, “In the past few days, intensive meetings took place between a delegation from the Central Bank of Iraq and the American side responsible for foreign transfer operations to cover imports, and the negotiations culminated in a number of decisions and mechanisms that contribute to facilitating the special procedures.” Foreign transfers related to imports through the foreign currency sales window.

The source added, “It was agreed to enhance the advance balance of five Iraqi banks in their dollar accounts with Jordanian banks and transfers via (JP Morgan),” noting, “The problems related to the rejected transfers were resolved, and it was agreed that the rejection of transfers should be based on strong reasons.” “.

He continued, “There were also other meetings that brought together one of the Emirati banks, the Central Bank of Iraq, and the American side, to implement the mechanism for enhancing balances in the Emirati dirham for Iraqi banks (UAE Dirham pilot),” indicating, “Things are going well in this aspect, as all the details have been resolved.” Technical matters related to the issue, and it is expected that the mechanism for enhancing balances in the UAE dirham will begin within the next few days.”

The source confirmed, “There are serious negotiations that have reached their final stages to enhance the balances of some Iraqi banks in euros with UBAF Bank to finance trade with the European Union,” noting, “An increase in the number of banks whose balances are being strengthened in Chinese yuan through the Singapore Development Bank.” “.

He added, “Accounts have been opened for 6 Iraqi banks in this bank, and during the coming period 7 more banks will be added to finance Iraqi trade and imports from China, as these imports are estimated at about 12 billion dollars annually.”

The source concluded by saying, “We have also begun opening bank accounts in the Indian rupee for a number of Iraqi banks at the same correspondent, the Singapore Development Bank (New Delhi branch), and operations to strengthen the balance of two Iraqi banks have actually been completed as a first stage, and it is expected that this mechanism will contribute to financing Iraq’s imports from India.” Especially medicines and foodstuffs, which are estimated at about $3 billion.”

Nrttv.com

A campaign is launched in Iraq to dismiss the governor of the Central Bank

Baghdad – The removal of Ali Al-Alaq from his position as Governor of the Central Bank of Iraq has become a declared goal by forces that hold him responsible for failing to stop the rapid rise in the exchange rate of the US dollar, while doubts are swirling about the real motives of those forces, which some do not hesitate to accuse of trying to deepen the chaos of the financial sector in The country, in an effort to confuse government efforts to limit the bleeding of hard currency resulting from the smuggling of dollars towards Iran and Syria.

Parliamentary authorities launched a movement within the corridors of the House of Representatives to pressure Prime Minister Muhammad Shiaa Al-Sudani and push him to dismiss Al-Alaq.

Representative Adnan Al-Jabri accused Al-Alaq of failing to control the rise in the dollar exchange rate. Al-Jabri said in a statement reported by Iraqi news sites that there is complaint in political and popular circles about the decline of the dinar against the dollar, calling on the government to take measures against the governor of the central bank.

The MP, who describes himself as an independent, pointed out that “after assuming the position of governor of the Central Bank, Al-Alaq presented a plan to control the rise in the dollar exchange rate, but he failed in it and did not fulfill his promises to the Iraqi people.”

He also revealed that there were “deliberations within the House of Representatives to take measures against the governor, as he is directly responsible for the currency market.”

An oral question directed to the Sudanese included a direct criticism of the Governor of the Central Bank and accused him of mismanagement, describing that limiting the reason for the rise in the dollar exchange rate to currency smuggling was merely an American claim.

The banking system in Iraq is witnessing a state of chaos, manifested in the inability of the authorities to control the rise in the dollar exchange rate, which has cast a shadow over the commercial movement in the country and the economic cycle as a whole, raising fears of wasting a new opportunity to relaunch development provided by the rise in oil revenues.

For its budget, Iraq relies mainly on oil revenues transferred to it by the United States of America in dollars.

In recent months, the US government’s warnings to its Iraqi counterpart have increased that a large portion of the dollars it supplies end up being smuggled to Iran, which runs networks of financial manipulation inside Iraq with the help of political forces and armed militias affiliated with it there.

In order to limit this, the United States imposed sanctions last July on fourteen Iraqi banks, which the US Treasury accuses of being involved in dollar smuggling and money laundering.

Later, the US Assistant Secretary of the Treasury for Terrorist Financing and Financial Crimes, Elizabeth Rosenberg, met with the Prime Minister, the Governor of the Central Bank of Iraq, and representatives of private sector banks in Baghdad, and agreed with them on an action plan to improve the performance of the Iraqi financial sector in preventing fraud, sanctions evasion, terrorist financing, and other illegal activities. .

As part of its measures to control financial conditions, the Iraqi government decided to set an official exchange rate for the dollar not to exceed 1,350 dinars, hoping to stop the rise in the value of the American currency and reduce demand for it.

But the result was completely opposite, as the dollar continued its rapid rise until its value reached 1,630 dinars on Wednesday.

Iraqi authorities doubt that this is an automatic matter, pointing to the presence of coordinated manipulation operations by organized networks whose branches extend within some political forces and armed factions with the aim of sustaining chaos in the Iraqi financial sector, allowing them to continue obtaining the largest possible amount of dollars and smuggling them out of the country.

The same parties point out that manipulation of the dollar has become a lifeline for several parties, including armed militias linked to political forces that manage them and need huge sums of money to arm them and pay the salaries of their members and the consequent compensation for these members and their families in the event that they are injured or killed while performing the tasks they are assigned. .

From this standpoint, these parties consider that the campaign currently directed against the Governor of the Central Bank is part of efforts to sustain chaos in the Iraqi financial sector.

An Iraqi expert in financial affairs considered that what the Central Bank of Iraq has taken in its efforts to preserve the value of the local currency and protect it from the distortion of the dollar is consistent with what is usually taken by financial institutions in other countries.

He stressed that completing the procedures to make the financial authorities’ plan a success falls on the security authorities, who must dismantle currency manipulation and smuggling networks.

The expert added, “What makes it difficult to take effective legal measures against these networks and those behind them is their interference with political parties and armed factions, some of which may be actually participating in power.”

The intersection of dollar smuggling networks with political forces and armed militias makes it difficult for the Iraqi state to resist them

The confusion of the Iraqi banking system will not be without far-reaching consequences on the country’s economy, and thus on its development path and social situation.

It was stated in a report issued by the International Center for Development Studies, which is based in the British capital, London, that this system, instead of being a contributor to the development of the Iraqi economy, has turned into an obstacle to growth and attracting investments and has become an essential component of money smuggling and money laundering networks.

The report indicated the presence of a large number of banks owned by figures close to politicians, parties, and armed militias that contribute significantly to dollar smuggling and financing foreign trade operations with neighboring countries in exchange for receiving commissions and political support.

It was estimated that two-thirds of the Central Bank of Iraq’s sales through the currency selling window, which ranged at levels of $250 million per day, did not benefit the Iraqi market over the past two decades, which led to the country losing sums of money of no less than $400 billion.

Rawabetcenter.com

The Kurdistan Government announces the adoption of the Iraqi dinar instead of the dollar in customs duties

Shafaq News / The Kurdistan Regional Government announced, on Monday, the adoption of the Iraqi dinar in customs duties instead of the US dollar.

The Regional Government’s Media and Information Department said, in a statement received by Shafaq News Agency, “The Kurdistan Regional Council of Ministers decided, in accordance with a document, to adopt the Iraqi dinar at all border crossings to receive customs duties.”

The statement added, “All ministries are obligated to implement the decision, and in the event of a violation, legal measures will be taken.”

Shafaq.com