An economic expert warns of a rise in the dollar exchange rate in Iraq in the coming days

Economic expert Nasser Al-Tamimi warned, today, Tuesday (December 17, 2024), of a rise in the dollar exchange rate in Iraq in the coming days.

Al-Tamimi said in a press statement, “There are real fears in the Iraqi market of the continued rise in the dollar exchange rate after the suspension of the platform by the Central Bank of Iraq,” indicating that “this matter will constitute a shock, especially at the beginning of implementing the decision and will lead to a rise in the dollar, to increase demand for it in the parallel market.”

He added that “after the platform is stopped, most traders, especially small ones, will depend on the parallel market to finance their foreign trade, while continuing to finance trade with Turkey in dollars, through illegal means,” noting that “this is what will lead to the rise, and therefore practical steps must be taken to prevent this by the country’s monetary authority, and urgently.”

The Central Bank of Iraq revealed on Wednesday (September 4, 2024) the mechanism for ending the electronic platform for foreign transfers, while indicating that the placement of foreign transfer operations and meeting requests for the dollar are on sound paths and consistent with international practices and standards.

The bank said in a statement that “the electronic platform for foreign transfers managed by the Central Bank of Iraq began at the beginning of 2023 as a first phase to reorganize financial transfers in a way that ensures proactive oversight of them instead of subsequent oversight by the Federal Reserve auditing daily transfers. This was an exceptional measure as the Federal Reserve does not usually do this, and a gradual shift was planned towards building direct relationships between banks in Iraq and foreign correspondent and approved banks, mediated by an international auditing company to conduct pre-audit of transfers before they are executed by correspondent banks.”

He added that “during the year 2024 and until now, 95% of the transfer process from the electronic platform to the mechanism of correspondent banks directly between it and Iraqi banks has been achieved, which means that only about 5% of it remains within the platform, which will be transferred using the same mechanism before the end of this year and according to the plan,” explaining that “some expectations about potential impacts on the exchange rate and transfer operations are baseless, because the process will not be sudden or in one batch at the end of this year, but rather it was originally achieved during the past period with effort and careful follow-up, except for the remaining small percentage that will be completed in the coming short period.”

He stressed that “trade with the United Arab Emirates, Turkey, India and China represents about 70% of Iraq’s foreign trade as (imports), which prompted the Central Bank of Iraq to find channels for transfer in euros, Chinese yuan, Indian rupees, and Emirati dirhams, through accredited correspondent banks in those countries, and (13) Iraqi banks have actually begun conducting transfer operations with a pre-audit mechanism that has been agreed upon and approved in addition to transfers in dollars.”

He continued: “With the provision of channels for personal transfers for legitimate purposes and external purchases through electronic payment channels and international money transfer companies and cash sales to travelers, and the payment of cash dollars for incoming transfers to the parties and purposes specified in the Central Bank’s published instructions.”

The Central Bank of Iraq stressed that it “put foreign transfer operations and meeting dollar demands on sound tracks consistent with international practices and standards and the Anti-Money Laundering and Terrorist Financing Law.”

Explaining that “providing the aforementioned channels for all purposes at the official dollar price makes this price the true indicator of economic practices, which is proven by the reality of price stability and control of inflation, and any other price traded outside of these channels is an abnormal price that those with unorthodox or illegal practices resort to, who avoid official channels in their dealings, and bear the additional costs alone by purchasing at a higher price than the official price to delude others with the difference between the official price and the other.”

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Parliamentary Finance: The Iraqi economy will not be affected by the Syrian situation

Member of the Finance Committee in the Iraqi Parliament, Moeen Al-Kadhimi, confirmed on Monday that the government and the Central Bank have taken several important measures to confront the security and economic challenges in the country, especially in light of the deteriorating situation in Syria.

Al-Kadhimi explained to Shafaq News Agency that the situation in Syria does not affect the Iraqi economy or the dollar exchange rate in the local market.

He added that the dollar exchange rate in the parallel market is currently stable, noting that the government is working to reduce the gap between the parallel exchange rate and the official rate to achieve greater economic stability.

Currency markets, especially in the Kurdistan Region, are witnessing significant changes with the “sudden” rise in the value of the Syrian pound against the Iraqi dinar.

After the fall of Bashar al-Assad’s regime, the Syrian pound continues its recovery against other currencies, especially the US dollar, which declined by 18 to 20% during the past few days.

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Banking expert: Private banks do not support the Iraqi economy and depend on the Central Bank

Banking expert Mohammed Salem confirmed on Monday that most private banks are still “living” on the Central Bank of Iraq without engaging in any economic activity.

Salem told Shafaq News Agency, “Most private banks do not practice banking work in terms of credit except in a simple way, and therefore they do not contribute to stimulating the Iraqi economy, as currency exchange is the basis of their banking revenues, so they have come to depend on electronic trading, hard currency and electronic payment, as they obtain dollars from the Central Bank and sell them and obtain net profits without fatigue.”

He added, “Despite their distancing from providing bank loans, private banks were pioneers in electronic trading and in providing services to citizens and employees, whether related to automated teller machines or other electronic services, at a time when government banks were suffering from backwardness in this area.”

He explained that “these services provided by private banks encouraged employees to localize their salaries with them, while government banks, with the exception of the Trade Bank of Iraq, continued to suffer from the problem of the lack of localization of employees’ salaries.”

Salem stressed that “government banks, despite their failure to keep up with international and even private banks, remain faithful in preserving the money of their depositors, no matter how much they are exposed to theft and looting, which is what these banks witnessed in 2003.”

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Parliament is discussing the amendment to the budget law with government officials to proceed with its approval

The Parliamentary Finance Committee intends to discuss amending the country’s general budget law in the coming days with officials from the federal government and the Kurdistan Regional Government.

This was stated by Faisal Al-Naili, a member of the Parliamentary Finance Committee, to Shafaq News Agency, saying that the committee will hold a meeting during these days to discuss amending the general budget law.

He added that after the meeting, a number of officials from the Ministry of Finance and Oil in the federal government will be hosted, in addition to officials from the Kurdistan Regional Government.

Al-Naili pointed out that after discussing the amendment to the budget law and hosting the officials, the date for the second reading of the law will be determined.

At the end of last November, the Finance Committee discussed during its meeting the draft law amending the first law to the Federal General Budget Law for the fiscal years (2025-2024-2023) No. (13) of 2023.

Atwan Al-Atwani, Chairman of the Committee, stressed the importance of these laws and emphasized discussing them and submitting some of them to the Council Presidency for a second reading, pointing to the formation of a body to estimate and monitor the distribution of revenues, in order to achieve sustainable development.

The Finance Committee discussed the articles related to the draft law amending the first law of the Federal General Budget Law for the fiscal years (2024-2025-2023) No. (13) of 2023, regarding the mechanism for exporting oil in the region and monitoring production costs, where the necessity of maturing the law to meet the requirements was emphasized, with the need to collect detailed data in numbers and tables to achieve the goal of the appropriate amendment.

On the other hand, the Finance Committee discussed the file of the proposed first amendment to the Law of the General Authority for Monitoring the Allocation of Federal Revenues No. (55) of 2017.

In June of last year, the Iraqi Parliament voted on the draft general budget law for the fiscal years (2023, 2024, 2025).

The value of the 2023 budget amounted to 197 trillion and 828 billion Iraqi dinars (about 152.2 billion dollars), with a total deficit of 64.36 trillion dinars (49 billion dollars).

The Iraqi government allowed the possibility of amending the articles or paragraphs of the law, which is what actually happened when the Council of Ministers approved amending Article (12/Second/C) of the Triennial Budget Law and referred it to Parliament for discussion.

Shafaq.com

Iraq breaks silence, demands Iran immediate commitment to gas supply contract

An Iraqi government official confirmed on Sunday that the decision to reduce Iranian gas supplies was “unilateral” and was made suddenly and in violation of the contract concluded between the two countries. He pointed out that the Ministry of Electricity reserves all its contractual rights and demanded that the Iranian side “immediately commit” to those terms.

The official told Shafaq News Agency, “Despite the Ministry of Electricity’s continuous efforts to advance the electricity sector and diversify its sources, the national system is exposed during the current cold wave to challenges beyond its control, as a result of unilateral measures by the Iranian side.”

He added that “the Iranian side recently reduced the supply of gas to the gas stations from (25) million cubic meters per day to only (6) million cubic meters, although the contract concluded between the two parties obliges the Iranian Ministry of Energy to supply (50) million cubic meters per day to Iraq during the peak winter and summer periods, for a period of five years, but this sudden measure led to the loss of approximately (6000) megawatts from the national grid.”

The government official pointed out that the Ministry of Electricity, while retaining all its contractual rights, confirms that it is continuing its intensive contacts with the Iranian side and is demanding that it immediately adhere to the terms of the concluded contract and ensure the delivery of the contracted quantities to ensure the operation of the power stations and provide reliable supply hours for citizens.

He pointed out that “the Ministry of Electricity took urgent measures, which included high coordination with the Ministry of Oil to pump additional quantities of alternative fuel, accelerate the completion of national gas investment projects, and activate emergency plans to maintain the stability of the electrical system.”

Since the 1990s, Iraq has been relying on a system of scheduled power outages due to the low levels of electricity production, and residents rely on private generators to fill the gap.

To fill this gap, Iraq imports electricity and gas from Iran for between a third and 40 percent of its energy needs, but it has difficulty paying for those imports because of U.S. sanctions that only allow Iran to obtain funds to buy non-sanctioned goods, such as food and medicine.

In parallel, Baghdad is counting on electricity interconnection projects with neighboring countries in order to secure stable energy supplies without the need for fuel to operate stations, in light of the instability of Iranian gas supplies, which recently caused Baghdad to lose more than 4,000 megawatts due to gas shortages and the cessation of interconnection lines with Iran.

The United States is pressuring Iraq, OPEC’s second-largest oil producer, to reduce its dependence on Iranian gas.

To find an alternative pipeline, Iraq announced in August 2023 the signing of a preliminary agreement with Turkmenistan to import gas from it to meet part of the needs of the country’s power plants.

Shafaq.com

Parliamentary Integrity Committee accuses former Iraqi Central Bank employee of being behind US sanctions

The Parliamentary Integrity Committee accused, on Sunday, a former employee of the Central Bank of being behind the banking sanctions imposed on some Iraqi banks by the US Federal Reserve.

The number of banks sanctioned is 32 out of 72 banks operating in Iraq.

Member of the Parliamentary Integrity Committee, Vian Dakhil, said in a statement received by Shafaq News Agency, that a former employee of the Central Bank hid emails received from the Federal Bank, JP Morgan and Citibank to inquire about some topics related to the bank’s work.

She added that failure to respond to these issues led to some banks being punished, stressing that most banks do not know the reason for the penalties imposed on them.

On the other hand, economic expert Mustafa Akram Hantoush told Shafak News Agency that the statements of the members of the Parliamentary Integrity Committee are closer to reality than the statements of the Central Bank of Iraq.

He added that the collapse of the Iraqi banking system and the punishment of 32 Iraqi banks without any clear charges during a period of (a year and a half) is not normal and from the banking work perspective this may be the first incident of this kind in the world.

Hantoush pointed out that the worst thing is the lack of serious solutions by the Central Bank of Iraq to this situation, but rather the move towards cancelling the (Fitr) platform by the end of 2024 and handing over the dollar file to banks affiliated with foreign investors and banks (Jordanian and Gulf).

Hantoush wondered whether the Central Bank of Iraq knows that by not finding solutions for the Iraqi banking sector, it will fire the mercy bullet at the entire Iraqi banking system and it will be punished as a whole, which will lay off nearly (100) thousand workers in the Iraqi private banking sector in favor of Jordan and the Gulf States, and why are Iraqi banks not guaranteed to open an account for them in the correspondent banks in dollars (Citibank / JP Morgan) like the countries of the region did.

He continued, “Why has the mechanism for cooperation and auditing with Ernst & Young regarding transfers in currencies other than the dollar not yet been determined and announced?”

Shafaq.com

Masoud Barzani: The ground is prepared for a comprehensive peace process for the Kurdish issue in the region

The Kurdish leader and head of the Kurdistan Democratic Party, Masoud Barzani, considered on Friday that the ground is now prepared for a comprehensive peace process in the Middle East for the Kurdish issue.

This came in a speech he delivered during the launch of the Middle East Peace and Security Forum – MEPS 2024 at the American University in Duhok.

Barzani said in his speech, “In the Kurdistan Region, the elections were held despite expectations that they might not be held, or that problems would occur if they were held, but I would like to thank the citizens of Kurdistan who demonstrated their awareness and made us proud with this achievement.”

He added, “We hope that everyone will deal with legitimacy, and after the announcement of the official results by the Independent High Electoral Commission, the negotiation phase will begin between all parties to expedite the start of Parliament’s work.”

As the Kurdish leader also said, “We hope that you will support us so that in the future there will be one region, one parliament, one Peshmerga forces, and one government that represents all components of the region.”

He pointed out that in less than a year, legislative elections will be held in Iraq, and that the experience that took place in the Kurdistan Region can be used to benefit.

Barzani addressed the general population census in Iraq, saying: “We received assurances that there were no political objectives behind the census, and confirmation that it would not have any impact on the areas covered by Article 140 of the Constitution.”

He stressed that dialogue solves all problems, and today there is a good relationship between the regional government and the federal government and there is cooperation to solve the outstanding problems.

Barzani spoke about the situation in the region, saying: “The crises in the region and the scenes of war that we see in Lebanon and Gaza are unfortunate, and we hope that this war will stop and this tragedy will end,” stressing that “the most important thing of all is to keep Iraq away from this war.”

The Kurdish leader continued, saying, “We all expect that the situation will change after the new president is chosen following the US elections, and all expectations indicate that the administration of the new President Trump will be very different from President Biden’s policy.”

Shafaq.com

Because it contains a political aspect.. Parliamentary Wealth: The Oil and Gas Law faces difficulties

Member of the Parliamentary Oil, Gas and Resources Committee, Ali Abdul Sattar, confirmed today, Thursday, that the Oil and Gas Law has been facing difficulties since 2008.

Abdul Sattar told Al-Maalouma Agency, “The oil and gas law faces difficulties within the House of Representatives because it contains a political aspect between the region and the center.”

He added that “the law regulates financial matters and oil management for all governorates, especially the governorates producing oil and gas,” noting that “the reason for the law’s suspension is that it contains points of contention with the region.”

He explained that “the law is still in the government’s registry and has not been sent to the House of Representatives, despite the ongoing dialogues and discussions between the Baghdad government and the regional government.”

He added, “The dispute is still ongoing between Baghdad and Erbil over the oil file, and we are waiting for it to be resolved and for the law to be sent to the House of Representatives for discussion and approval.”

Almaalomah.me

Planning: Announcement of preliminary results of the general census in Iraq will be next week

The spokesman for the Ministry of Planning, Abdul Zahra Al-Hindawi, said on Thursday that the ministry will announce the preliminary results of the general population census next week.

Al-Hindawi added in a special statement to Shafaq News Agency that the population census includes three stages, the first of which is the numbering and enumeration stage, which began on the first of September and ended on the 30th of October.

He added that the second stage is counting the population and recording their basic data, which takes place during the curfew on Wednesday and Thursday.

Al-Hindawi also pointed out that the third phase, which is the last, begins after the end of the second phase and continues until December 10, explaining that the third phase includes detailed data on the population, which are the social and economic characteristics of the population.

The spokesman continued by saying: The initial results will be announced after collecting and verifying the data, and this will be next week, either on Sunday or Monday, stressing that the announcement will be at an official press conference, and will include the results of the population of Iraq, the population of each governorate, the number of males and females, and age groups.

Shafaq.com

Center expects the number of seats in the Iraqi parliament to increase to 430 seats in the next session

The Strategic Center for Human Rights in Iraq expected, on Thursday, an increase in the number of seats of the people’s representatives in the House of Representatives during the upcoming sessions after conducting the general population census for the year 2024. However, it suggested canceling the paragraph that every 100,000 people should have a representative to avoid this increase in the number of seats and not to burden the country’s general budget.

The Vice President of the Center, Lawyer Hazem Al-Radini, said in a statement today that: Article (49) of the Constitution of the Republic of Iraq for the year 2005 stipulated that (the Federal Council of Representatives shall consist of a number of members at a rate of one representative for every one hundred thousand people of Iraq), and since the first elections for the Council of Representatives in its first session in 2005, the number of its members was 275 representatives, and in the second session it was 325 members, and in the third, fourth and fifth sessions that took place in 2021, 329 representatives were approved, and the excuse was the lack of a population census after 2003.

He added that the numbers have been confirmed and until a population census is conducted, the real number will be shown accurately, because all the data used previously is approximate, especially with regard to the distribution of the number of seats on the basis of each governorate and its share of 329 seats, indicating that there are governorates whose seats may increase and others may decrease as a result of the population movement that occurred between the governorates from 1996 to 2024, as there are security and economic circumstances.

Al-Radini continued by saying: After conducting the general population census, there will be two options for the House of Representatives. The first: amending the elections law by increasing the number of seats in the House of Representatives in its sixth session, which is expected to be no less than 430 representatives, and distributing them to 18 governorates, each according to its population according to the census.

He said: The second option is to work on amending Article (47) by cancelling the paragraph of one representative for every hundred thousand people and fixing the number at a maximum not exceeding (300) and submitting it to a referendum on the same day of the election of the next House of Representatives so that there are no financial costs that burden the state budget.

Shafaq.com