Next month. A large conference to announce 8 cities as investment opportunities
{Economic: Al-Furat News} The New Cities Authority at the Ministry of Construction, Housing and Public Municipalities announced the imminent announcement of the second batch of cities as investment opportunities for companies and real estate developers.
The director of the authority, Hamed Abdel Hamad, said in a press statement that "the procedures have been completed, to reveal 8 new cities as investment opportunities within a second batch of residential cities in the government program for housing, as well as work to complete the procedures to announce three other cities soon," noting that "cities will be available for investment in front of Arab and international companies, and local investors wishing to invest in this vital sector."
Hamad explained that: "The beginning of next month will witness a large conference to announce investment opportunities, in the presence of international, Arab and Gulf companies," noting that "the headquarters of the authority witnessed the visit of dozens of companies to see investment opportunities in these cities, and we sensed a real desire to invest in this sector.
" The director of the authority added that "five new cities have already been referred, including [Ali Al-Wardi] by signing the initial contract, while work began after the issuance of the investment license in the cities of {Al-Jawahiri} in Baghdad and {Al-Ghazlani} in Nineveh," pointing out that "the Chinese and Iraqi companies implementing the installation of concrete factories units, administrative buildings and soil leveling works in Al-Ghazlani, provided that the actual start of them will begin within the next three months."
"The other city is the [banks of Karbala], which is distributed among three experienced investors and previous similar businesses, including a Malaysian company, and is in the process of issuing the investment license and starting work next month after handing over the site, while the {gardens} in Babylon are in the process of preparing plans, handing over the land and issuing the license," he said.
Regarding construction operations, he explained that "all cities have been directed to be at the level of smart and sustainable cities in all its details, including electronic transactions and the use of technology in the daily movement of residents."
Regarding the marketing of housing units in the new cities, he said: "Directives will be issued to investing companies to announce the prices of the units through their websites, so that the citizen can enter and register directly," calling on citizens to "stay away from fake parties that claim to be related to the new cities and promote unrealistic things regarding prices or marketing housing units, and citizens can view the authority's website to answer all their inquiries and questions about this or go to the company directly instead of taking other methods that may not lead for the same purpose."
Article Quote: "Members of the Security Council support ending the mission of the UNAMI mission in Iraq"
Quote: "A number of members of the UN Security Council - including Russia and China - yesterday, Thursday, supported Baghdad’s request to end the mission of the United Nations Mission in Iraq (UNAMI) by next year, but Washington did not immediately provide its support for this step
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Article "Adjourning the session to elect the Speaker of Parliament until further notice"
Quote "It is noteworthy that a quarrel and fistfight occurred between representatives Muthanna Al-Samarrai and Haibat Al-Halbousi inside the House of Representatives hall during the third round of electing the president, creating massive chaos, which prompted the postponement of the decision-making session until further notice."
The Governor of the Central Bank announces the start of the second phase of the banking sector restructuring plan
Central Bank Governor, Ali Mohsen Al-Alaq, announced today, Sunday, the start of the second phase of the banking sector restructuring plan.
The media office of the Central Bank of Iraq said in a statement received by the Iraqi News Agency (INA): “Al-Alaq received a delegation from the World Bank headed by the Regional Director for Equitable Growth, Finance and Institutions for the Middle East and North Africa region, Nader Muhammad,” noting that “during the meeting, strengthening relations was discussed.”
The bilateral relationship between the Central Bank of Iraq and the World Bank, especially the restructuring of government banks, the launch of the Riyada Bank project and its economic and social importance, and the two parties also discussed the experiences of neighboring countries in confronting climate change and its impact on the national and regional economy.”
He added, "The meeting discussed small and medium enterprises and their support by the Central Bank, and the development of the financial and banking sector, non-banking financial institutions, financial markets and the insurance sector, as well as benefiting from the World Bank's experiences in digital transformation, financial inclusion, and digital banks," noting that "the governor reviewed during the meeting , The Central Bank of Iraq’s plan to restructure the banking sector,” noting that “this bank has completed the first phase of the plan, and has begun the second phase.”
Al-Alaq stated - according to the statement - that “the Board of Directors of the Central Bank licensed the Green Bank, which will be the nucleus of renewable energy and sustainable financing initiatives,” revealing “the Central Bank of Iraq’s intention to license a number of digital banks.” link
"US-based Commerce Bank has officially gone live with FedNow on Temenos Payments Hub delivered as Temenos SaaS, enabling real-time payments on the secure, scalable and continuously updated platform.
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Interestingly, Iraq is using the same digital payment service. 😉
Frank26: "STUDY AFTER STUDY OF THE FLOAT FOR THE MONETARY REFORM... IS NEXT"...........F26
Floating the Iraqi dinar...a solution to fill the “gap” of its troubled price against the dollar
5/17/2024
The stability of the Iraqi dinar has been facing major challenges for years, as it has witnessed price fluctuations that have not stabilized, especially with the rapid rise and very slow decline of the price of the dollar, in addition to a gap between what the Central Bank of Iraq determines and what is sold in the parallel market, especially in banking shops that do not adhere to According to the instructions of the Central Bank.
In order to avoid the “volatility” syndrome and the “gap” in the price of the Iraqi dinar against foreign currencies, some experts believe that the solution lies in a kind of “surgical” operation for the country’s monetary system that may be painful, but it achieves long-term monetary stability for the national currency through... "float".
The cash selling price, according to the Central Bank, is 1,305 dinars per dollar, while the price for transfers abroad is 1,310 dinars per dollar, and the price in the parallel market is about 1,450 dinars per dollar in mid-May, according to local media, while it reached levels of 1,600 dinars per dollar in previous periods.
For months, the Iraqi authorities have imposed restrictions in their efforts to control exchange rates, restricting all commercial transactions within the country to the Iraqi dinar, and established a new mechanism that subjects external transfers to greater scrutiny.
Iraqi economic analysts who spoke to Al-Hurra website, some of them warned against taking a decision that would lead to floating the dinar, while some of them believe that a moderate policy could be taken that suits the Iraqi economy, based on “floating” and “stabilization” at the same time.
Is the flotation policy compatible with the Iraqi economy?
Advisor to the Prime Minister for Financial Affairs, Mazhar Salih, believes that floating the currency price does not suit the Iraqi economy, especially since it is a "rentier economy, dominated by foreign currency reserves."
He explains in statements to the “Al-Hurra” website that “the economic vision that wants to float the Iraqi dinar to end the gap between the official price and the parallel price may be possible in an economy in which the free market alone influences the movement of the balance of payments, and not in an economy in which the rentier government sector is dominant and generates reserves.” Foreign currency".
He added, "The monetary authority in Iraq alone is the main source of supply of foreign currency that meets the desired demand for foreign exchange in the local market."
Saleh believes that the demands for flotation inevitably mean “adopting the prevailing exchange rate in the parallel market, in order to achieve the goal of stability and balance in the official exchange rate itself at a new exchange point that the market will reach at the end of the assumed flotation policy and return to stability again.”
The flotation scenario also means “the withdrawal of the monetary authority as the main central offerer of foreign currency, and its replacement by new forces of free market makers, which certainly have only a weak, limited supply of foreign exchange,” according to Saleh.
He points out that these forces carry “an uncontrolled package of inflationary expectations, and are called in the economic literature (the forces generating inflationary expectations), which will give dominance to the supply forces of speculators” who own limited amounts of foreign exchange, matched by “an open demand for foreign currency from The market side" exceeds what is offered by "at least more than ten times in our estimate."
Chancellor Saleh described this policy as “unruly,” as as long as “the central government supply of foreign currency will be absent from the market, we will not obtain any equilibrium point in the exchange rate that flotation seeks except with a widespread deterioration of the exchange rate as long as it is carried out by forces generating inflationary expectations in a severe rentier economy.” "unilateralism."
He warns that if the exchange rate moves in “a market that is incomplete, in terms of productivity, in its compensation for the required supply of goods and services,” no one “will know how much the new exchange rate resulting from the flotation will be,” which will be accompanied by “a prior wave of inflationary expectations,” the trends of which are difficult to control. Which may push monetary policy makers to “intervene with excessive foreign reserves and unjustified waste in foreign exchange to impose a state of stability.”
According to the World Bank, Iraq has 145 billion barrels of proven oil reserves, which are among the largest crude oil reserves in the world.
But Iraq hopes that the country's oil reserves will exceed 160 billion barrels, according to what the Minister of Oil, Hayyan Abdul Ghani, recently announced.
What if the Iraqi dinar was floated?
The claims that have appeared every now and then for years calling for floating the exchange rate of the Iraqi dinar are “strange,” and most of them are made by people who are “not specialized in economics or monetary policy,” according to what Professor of International Economic Relations, Abdul Rahman al-Mashhadani, confirms to the Al-Hurra website.
He asserts in a decisive tone, "Iraq cannot proceed with floating the dinar's exchange rate. The evidence for this is all the agreements concluded with the International Monetary Fund since 2004, and the reviews praised the stabilization of the exchange rate by the Central Bank of Iraq."
Al-Mashhadani added that there was a study by experts at the World Bank during the past years that recommended “raising the exchange rate,” noting that even then, “these recommendations cannot be taken into account because the World Bank is concerned with what is related to economic development, but following up on the recommendations for monetary policies is taken into account if It was from the International Monetary Fund.
In its latest review on Thursday, the International Monetary Fund praised the efforts of the Central Bank of Iraq to tighten monetary policy and strengthen its liquidity management framework.
He explains that “the real gap is in the wheel of production in the Iraqi economy, as the majority of goods are imported from abroad, which means that the flotation will cause a spiral in price rates to become significantly high and affect the marginalized classes,” indicating that such a decision cannot be taken “as a matter of politics.” “Cash” only, as we must “consider the burdens it will impose on citizens.”
Al-Mashhadani confirms that what has been applied in other Arab countries does not “mean that it can be applied to the Iraqi economy,” suggesting that “the exchange rate will become at the levels of 5,000 dinars to the dollar,” as “the Central Bank has lost control over exchange rates, leaving them to float.”
There is a fear that “floating” will cause “social” problems, as “salaries will erode significantly,” which may threaten “new classes to slide into poverty,” while “a class of merchants, politicians, and businessmen will benefit, who will benefit from the state of instability that will result from... This matter".
Al-Mashhadani agrees that floating in the end means “that the parallel market will control exchange rates,” but it will not achieve “the desired monetary stability,” as the central bank will then need to “print more local currency to keep up with demand in the markets,” and the government will need to increase salaries and allocations for aid packages. Social.
The Iraqi government advisor, Saleh, attributes the reason and existence of a “gap” in the dinar’s exchange rates against the dollar between the official and parallel markets to “external factors imposed by the compliance platform and auditing administrative restrictions on external transfer movements, which is not related to the deficit in the authority’s monetary reserves,” noting that the reserve Iraq's foreign currency is considered the highest in the country's history, as it touches the levels of import coverage for 16 months, compared to the global standard, which does not exceed three months of import coverage.
Financial transfers in dollars through official channels have increased significantly in Iraq, while Iraq continues its reforms of the financial sector in line with international standards, according to a previous report by Agence France-Presse.
In late 2022, the Iraqi banking sector adopted the SWIFT electronic transfer system with the aim of providing better control over the use of the dollar, ensuring compliance with US sanctions on Tehran, and also in order to limit the prosperity of the informal economy.
The financial standards that were adopted encouraged the emergence of a parallel market for currencies, attracting those seeking to obtain dollars outside official channels.
Saleh pointed out that there is a distortion in support for the prices of some commodities “on the part of financial policy, which is support in which the rich and poor mostly enjoy it equally without discrimination, and it represents an added, imperceptible real income, and it is the product of a financial policy inherited from the consumer welfare state for the rentier resource.”
He continued, "It is inconceivable until this moment that 90 percent of Iraq's population is receiving food support provided by the state as an extension of the economic blockade phase of the 1990s, in light of the changing standards of living and lifestyle, the increasing number of affluent people, and the growth of the middle class." LINK