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

Does Washington have a hand in the dollar crisis, and what is the validity of Baghdad’s intention to print a new currency?

Today; Monday – the Parliamentary Finance Committee denied the government’s intention to print a new local currency, while revealing the influence exerted by the US Federal Bank on the continuation of the dollar crisis.

Committee member Moeen Al-Kazemi said in a statement to Al-Mutala’ Agency, “Talk about the federal government intending to print a new local transaction has no truth at all, and the Iraqi dinar has a cover and bonds of approximately 150 billion dollars.”

Al-Kadhimi added, “Addressing the discrepancy in the dollar exchange rate does not happen by printing a new currency, but rather through thoughtful steps that should be implemented by all concerned parties.”

He pointed out, “The Central Bank covers the needs of merchants at the official price of 132 thousand dinars for every 100 dollars, and the reason for the disparity is the black market.”

He stated, “The influences exercised by the US Federal Bank to maintain this crisis for political purposes in Iraq.”

Almutalee.com

Parliamentary hosting of the Governor of the Central Bank of Iraq regarding the dollar exchange rate

Shafaq News / The Parliamentary Finance Committee announced on Monday that it will host in the coming days the governor of the Central Bank of Iraq and its general directors regarding the lack of control over the exchange rate of the US dollar against the dinar.

Committee member Mustafa Al-Karaawi told Shafaq News Agency, “The committee will host this week the Governor of the Central Bank, Ali Al-Alaq, and the general directors of the bank to find out the reasons for the rise and fall in the dollar exchange rate in the parallel market and who is the party concerned with implementing the reform packages launched by the Central Bank.” .

He pointed out that “the instability of the dollar exchange rate has caused an economic problem, and there is no clear policy for the central bank,” stressing that “the government must implement what the bank wants through the reform packages it launched, and therefore controlling the exchange rate is a shared responsibility.” between the Central Bank and government agencies, especially those concerned with import and customs ports.”

Al-Karawi pointed out that “hosting the bank’s governor will address the economic crisis, the rise and fall of the dollar, and the agreements the bank signed with the US Federal Reserve and the World Bank.”

The exchange rates of the US dollar have witnessed an upward increase against the Iraqi dinar for several months, and reached its peak this month when the price reached 1,655 dinars to one dollar, despite the government and the Central Bank setting an official exchange rate of 1,320 dinars to one dollar.

Shafaq.com

The Iraqi currency auction and World Bank determinants.

Muhammad Hassan Al-Saadi – Since the US invasion of Iraq, the World Bank and the US Treasury have been providing the necessary funds to its central bank, with funds received estimated at 10 billion dollars or more annually.

This money is from its oil sales, so it is placed in a fund in the Federal Bank, while Iraq seeks to obtain one billion dollars in cash from it, while the bank rejected this request, under the pretext that it conflicts with its efforts to stop the flow of dollars out of the country.

Iraq, for its part, announced its need for a billion dollars in cash to support its deteriorating dinar, while the US Treasury is still studying the request. In contrast, discussions are still raging in the internal corridors of the Federal Bank, in light of the absence of a clear and transparent financial system in Iraq, which can Relying on it to receive hard currency, as large amounts of dollars flow to private banks and money exchange shops, which are subject to unclear mechanisms, and there are many suspicions of corruption, money laundering and smuggling outside Iraq.

The US Federal Bank informed Iraq of its refusal to send a shipment of dollars, and considered it inconsistent with Washington’s goal, to reduce Iraq’s use of the US dollar, in favor of electronic transactions, which can be tracked more easily, as US officials confirm that smuggling operations out of Iraq are carried out by corruption mafias. It negatively affects the price of the dollar internally, and undermines the efforts of the Central Bank of Iraq to control its movement internally.

For its part, the Central Bank of Iraq is trying to make some adjustments to the mechanisms of financial work, so it initiated a rapid, phased plan, based on dealing in dinars in the internal Iraqi market, to get rid of the dollar until 2024, by controlling the efforts of informal companies and individuals subject to sanctions. , to buy billions of dollars, through currency auctions.

Government measures would restrict the movement of the dollar and revitalize the dinar to be the only one in circulation in the market, in addition to using modern mechanisms and technologies, and developing the financial system in a manner consistent with the development witnessed by the global system, and achieving monetary stability in the country.

Although there is a suspicion of a political aspect in the American measures, it does not negate the necessity and need of Iraq to develop and automate its financial sector, and prevent the smuggling of its oil imports outside its borders, as this is in its interest and its people, before any other party in the world..

Burathanews.com

A parliamentarian reveals: A Jordanian bank accounts for 75% of dollar transfers in Iraq

A member of the House of Representatives, Hussein Arab, revealed that a Jordanian bank had acquired 75% of dollar transfers in Iraq, and while revealing the volume of “forbidden” trade, he issued a warning about the rise in the dollar.

Arab said in an interview with the Twenty program broadcast by Al-Sumaria TV, that “there are many and major failures in the issue of the dollar and the parallel market, and we pointed this out a lot with the presence of information confirming the acquisition of the National Bank of Iraq (a Jordanian bank) of the total of 75% of foreign transfers,” stressing “work to The basis for holding this bank accountable and knowing the reasons for its acquisition of this percentage from the Central Bank auction.”

A member of the House of Representatives asked whether the liquidity of the National Bank of Iraq is proportional to the volume of dollars taken from the Central Bank? Pointing out that the Central Bank reinforces this bank with dollars from outside the platform, adding: We want to know the mechanism Transferring the dollar through the central bank.

He considered, “Limiting financial transfers to one bank out of 73 banks is a real disaster,” asking: “Why do we give the National Bank of Iraq (Jordan) this amount of dollars? Is the entire Iraqi economy linked to this bank?”, revealing that “the Central Bank did not transfer The dollar is for this bank from within the electronic platform and even outside it through what is called direct purchase, as it is a customary bank.”

Arab continued, “We sacrificed the Iraqi private banking sector in order to revive the foreign banking sector inside Iraq,” warning that “the Iraqi private banks will soon close their doors due to the central bank’s blunders, extortions, and arbitrary measures, stressing that what comes next will be difficult.”

He believed that “dollar prices will continue to rise if this issue is not addressed,” noting that “the dollar crisis that Iraq’s neighboring countries are suffering from has had a negative impact on our country,” noting that “former Prime Minister Mustafa Al-Kadhimi had permission from America to grant the dollar to… Iran and these tolerances have now ended.”

Regarding prohibited trade, Arab explained that “its volume reaches 10 billion dollars annually,” stressing “the necessity of drying up the sources of smuggling and taking quick government measures.”

He continued, “Alcoholic beverages, cigarettes, and gold are imported through the border crossings at a zero percent rate, even though their taxes are 200%, indicating that most of them are smuggled through the crossings in Kurdistan,” adding, “There are operations of currency smuggling and tax and customs evasion from the border crossings.”

Burathanews.com

Expert: 70% of dollar transactions have disappeared in Iraq, and the Central Bank wants to end the era of “dollarization”

Baghdad – 964… An economic expert says that the Central Bank eliminated 70% of dollar transactions in the Iraqi market, noting that this is the result of the policies followed by the bank’s governor, Ali Al-Alaq, throughout a year of assuming responsibility, as he began restricting “dollarization.”

Nabil Jabbar Al-Tamimi – economic expert for the 964 Network :

Since Central Bank Governor Ali Al-Alaq assumed the position, he has been working on a policy of ending dollarization.

What is meant by dollarization here is to end excessive dealings with the US dollar, which Iraqis have used since 2003 as the primary currency to pay for most purchases in the market.

The senior leadership in the Central Bank believes that this excessive dealing in the dollar threatens the reserve of the American currency, in addition to the continued fluctuation of its prices locally.

The Central Bank’s policy has now eliminated 70% of dollar transactions in the Iraqi market, and the remaining 30% is linked to the issue of remittances abroad within the framework of the banking sector, especially those heading to Iran, then Lebanon and Syria.

There are people within the Central Bank who may work to obstruct the implementation of the bank’s policies, which has caused the significant rise in the value of the dollar.

964media.com

Al-Sudani identifies the parties insisting on a rise in the exchange rate in Iraqi markets

Information / private… Today a member of the House of Representatives, Muhammad Saadoun Al-Sudani, identified the parties insisting on a rise in the dollar exchange rate in Iraqi markets, highlighting the difference between the Al-Kadhimi and Sudanese governments.

Al-Sudani said, in an interview with the Al-Ma’louma Agency, that “there is a difference regarding the file of the exchange rate of the dollar against the dinar between the previous and the current government,” indicating that “it was the Al-Kadhimi government that worked to raise the exchange rate, while Al-Sudani worked to reduce these prices.”

He added, “There are local internal agendas, as well as international forces, that insist on the dollar remaining at this high level,” pointing out that “the dollar is a major project whose goal is to force the government to follow a path desired by these international forces.”

The member of the House of Representatives explained, “The current government has fought a lot in several areas, especially the dollar, as well as the issue of importing gas from Iran, to try to prevent Iraq from giving money to the Iranian government, which the American Federal Bank stands behind.”

The series of rising dollar exchange rates in Iraqi markets is still continuing, amid conflicting opinions about the real reasons that led to the exhaustion of the local currency again, especially as it began to rise to levels that portend a great danger to the country’s economy.

Washington continues to create crises and create chaos through its malicious cards that it uses from time to time, as America continues to obstruct Iraq’s progress through many files, most notably the dollar.

Almaalomah.me