Iraqi News

Tuesday Morning Iraq Economic News Highlights 1-31-23

In Iraq   Crisis Of The Iraqi Dinar.. Causes And Repercussions

January 31, 2023  This episode discussed the announcement of the Iraqi Prime Minister, Muhammad al-Sudani, to relieve the governor of the Central Bank of his post. Has the price of the dollar gone out of the control of the state? What is the impact of the high price of the dollar on the Iraqi economy? How can Iraq, which sells all its oil in dollars, suffer because of its rise? What measures should the government take to reduce the price of the dollar? Why does not the citizen feel the improvement in the economic situation of Iraq? What are the measures taken by the Ministry of Interior to prevent tampering with dollar prices or monopolizing foodstuffs?   LINK

Parliamentary Finance Discusses With The Governor Of The Central Bank “Crisis” Of The Dollar

Policy  Alsumaria News – Politics   The Parliamentary Finance Committee discussed, today, Tuesday, with the Governor of the Central Bank of Iraq, Ali Mohsen Al-Alaq, “the dollar crisis.”

The media department of the House of Representatives stated, in a statement received by Alsumaria News, that “the Chairman of the Finance Committee, Atwan Al-Atwani, received the Governor of the Central Bank, Ali Mohsen Al-Alaq, at the committee’s headquarters , in the presence of the members of the committee.”

The statement added, “The governor of the bank presented his congratulations on the occasion of electing the chairmanship of the Finance Committee, wishing the committee success in continuing its supervisory and legislative work.”

He pointed out that “during the meeting, the issue of the fluctuation of the Iraqi dinar exchange rate against the dollar and the possibility of controlling it to preserve the market was discussed, as well as discussing its repercussions on citizens, the steps of the Central Bank and the procedures followed by it.


The Central Bank Meets With Banks To Discuss The Dollar Crisis

Economie| 10:09 – 01/31/2023  Baghdad – Mawazine News An informed source said, on Tuesday, that a meeting had begun at the Central Bank to discuss the crisis of the dollar’s high exchange rate.

The source told Mawazine News, “A short time ago, a meeting began in the Central Bank building, in the presence of all banks.”   The source, who asked not to be named, added, “The meeting comes to discuss the dollar crisis.” Ended 29/N33

The Dollar… Iraqi Power Is Threatened And An American Grip

01/30/2023   {Reports: Al-Furat News} Ammar Al-Masoud  The exchange rate of the dollar continues its insane rise against the Iraqi dinar, in light of the monetary and governmental authorities trying to stop it.

Yesterday, the exchange rates exceeded the barrier of 1,650 dinars per dollar. This led to increased turmoil and depression in the local markets. As a result of rising prices of goods and services to unprecedented levels.

While the official exchange rate from the Central Bank of Iraq for the dollar, directed to individual citizens, is 1470 per one dollar.

The decline comes as the local markets continue to be affected by the scarcity and abundance of the dollar, and the failure of the government and the central bank’s attempts to restore stability to the exchange markets.

Since the beginning of this year, the government and the central bank have taken a package of measures to increase the dollar supply in the local market, a decision that partially succeeded in resolving the crisis, but the exchange rates remained declining.

The crisis dates back to December 2020, when the government of former Prime Minister Mustafa Al-Kazemi announced a change in the exchange rate of the dollar from 1117 dinars to one dollar, to 1450 dinars, due to the decline in global oil prices.

and the beginning of 2022, and in light of the resurgence of oil prices in the global market; The government has rejected calls to return the dinar to what it was.

And the first repercussions of the dollar crisis was the dismissal of the Governor of the Central Bank of Iraq, Mustafa Ghaleb Makhaif, last Monday, by order of Prime Minister Muhammad Shia’a al-Sudani, who assigned the former bank governor, Ali Al-Alaq, as an agency.

Al-Sudani commented on the changes by saying: “The departments that have been assigned to the Central Bank and the Trade Bank of Iraq possess skills and will work to reduce the rise in exchange rates.”

Most sellers and wholesalers have been complaining for weeks about the decline in buying and selling in local markets and the citizens’ reluctance to shop. As a result of the significant increase in the prices of most commodities and basic foodstuffs, after the prices of some commodities increased by almost half.

Most merchants and citizens fear that the dollar prices will continue to rise and reach the barrier of 2,000 dinars for one dollar in the event that the government continues to fail to confront the crisis, which would explode the situation in the form of protest demonstrations, which are taking place in a limited manner now, in front of the Central Bank building in central Baghdad.

Dealers in the foreign exchange market in Iraq are likely to continue the fluctuation wave in the stability of the foreign exchange market until the completion of the implementation of government measures on the movement of the dollar, preventing its smuggling out of the country, and tightening control over imports from abroad.

It has become clear that the continuous rise in dollar exchange rates is linked to the strict measures taken by the US Federal Bank regarding money transfers to the Central Bank of Iraq. To prevent corruption, manipulation and currency smuggling to neighboring countries through the currency window in the Central Bank.

In its new procedures, the federation requires that Iraq present clear and specific import documents and certificates by companies and persons wishing to obtain dollars, after it used to present unknown and forged documents many times.

The Sudanese government decided to send Foreign Minister Fouad Hussein to Washington at the head of a high-tech economic delegation to discuss the dollar crisis and discuss the proposal to postpone the US Federal Reserve’s decision for six months, according to informed sources.

The dollar… Iraqi power is threatened and an American grip 7979302d766d1aec8f3697ef54906887

For its part, the Central Bank resolved the issue of cash selling to citizens in dollars, and it was reported that it was about to stop its direct sale, and denied “preventing or restricting cash selling to citizens, and that electronic registration guarantees meeting the citizen’s need for dollars.”

He also directed, in another development, to curb the rise in exchange rates, to expand outlets for selling cash dollars to travelers at the country’s airports (Baghdad, Basra, Najaf, Erbil, and Sulaymaniyah).

Independent MP Mustafa Sanad accused the United States of trying to use the dollar to put pressure on al-Sudani and said to al-Furat yesterday: “America used the dollar file to pressure al-Sudani, which is the biggest weapon in its influence that exceeds the missiles it uses to punish countries, and America is punishing Iraq through the measures of the (Swift) platform,” he said.

The economist, Abd al-Rahman al-Mashhadani, explains the function of this platform by saying: “What is happening now is due to the fact that the US Federal Reserve Bank imposed amendments to the procedures for transfers that pass through the Swift system, which includes an audit of the source of funds until the final future, which came after the consequences of theft of the century, which Money smuggling schemes revealed.

For his part, the advisor to the Central Bank of Iraq, Ihsan Shamran al-Yasiri, said, “The US Federal Bank has set strict conditions recently that oblige us to display lists of dollars sold on it that include the names of people and beneficiaries, and it takes 15 days to state its position on the safety of the purchase process for the party submitting the request, and the sale process stops.” In the event that the Federal Bank objects to a specific name because it is required, or if there is a similarity of names, or if it finds a suspicion of the purpose of purchasing the dollar.

The dollar… Iraqi power is threatened and an American grip

The increase in exchange rates led to an increase in the inflation rate in Iraq by 0.3 percent for the month of December, according to the Ministry of Planning.

The ministry said, in a statement on Saturday, that “the Central Statistical Organization monitored an increase in the monthly inflation rate during the last month of last year (December) by 0.3 percent, compared to the previous month of October.”

In another government attempt to curb the rise of the dollar and reduce the volume of inflation that swept the markets as a result of the rise in the exchange rate, and the resulting waves of high prices, which clearly affected those with limited incomes, and led to “biting off” a large part of the incomes of workers in the public and private sectors, it hinted at its entry { Wholesaler} in the local market with the aim of controlling prices.

The financial advisor to the Prime Minister, Mazhar Muhammad Salih, said: “We find in the state’s intervention in the field of import trade a comprehensive national solution to provide price stability and provide an atmosphere of anti-competition (cartels) monopolizing trade, which sends negative signals towards the stability of the Iraqi dinar exchange rate.”

Saleh added, “As long as government trade is highly governed and outside this constraint, as it relies on the mechanisms of documentary credits, which is the traditional base for financing trade, and so that the commercial market can reorganize itself, its contracts and its foreign purchases, and in order to contain fluctuations in the exchange rate within a narrow range, we suggest that trade expand.” The government foreign ministry (as a wholesale trader) is currently in order to supply the market with the most important commodities that have a wide impact on people’s lives, which flow according to the fixed official exchange rate of 1460 dinars to the dollar.

The dollar crisis will remain a preoccupation for the Iraqi citizen because of its direct impact on his financial and pension income. It is also considered one of the most prominent challenges facing the Sudanese government despite its efforts and attempts to control the rhythm between combating high prices and poverty and standing by the national interest in its inevitable negotiations with Washington.

Expert: The Exchange Rate Will Inevitably Decrease After Applying The New Central Bank Procedures

Economy News _ Baghdad  Economic expert Alaa Al-Fahd confirmed that the exchange rate will return to its official rate in the market after the Central Bank applies its new measures to control the exchange rate of the dollar against the dinar.

Al-Fahd said in a televised interview, followed by “Al-Iqtisad News”, that what we are going through today is a regulatory process for selling the dollar by the Central Bank in cooperation with the US Federal Bank and setting new procedures to monitor the movement of money, indicating that the Central Bank is not alone today responsible for controlling the exchange rate in Markets, but the responsibility rests with all ministries and governmental institutions, headed by the Ministry of Commerce, by providing food commodities to the citizen and selling them at the official price to prevent speculation by traders in the (black) market.

He added that the Central Bank facilitated the process of small merchants obtaining dollars at the official rate through multiple outlets for the purpose of importing food commodities as well as travel and treatment for citizens.

And between Al-Fahd, the citizen must understand that the Central Bank did not raise the dollar exchange rate, but after applying the new procedures for foreign transfers, some merchants speculated on the exchange rates and raised the price of foodstuffs in the market.