Showing posts with label #Economics #ExchangeRates #REER #MonetaryPolicy #FinancialReform #Macroeconomics. Show all posts

Tuesday, May 12, 2026

FRANK26: Iraq's Monetary Reform Heats Up!

The reason for postponing the vote on the cabinet today has been revealed

The reason for postponing the vote on the cabinet today has been revealed

Former MP Abdul Hadi Al-Saadawi revealed on Sunday the reasons for postponing the vote on the cabinet in the House of Representatives, attributing this to the failure of some political blocs to decide on their candidates for ministerial portfolios, which led to the inability to vote on the government formation today.

Al-Saadawi told Al-Furat News Agency, “It was likely that the Al-Zidi government would be given confidence today in the House of Representatives after all preparations were completed; however, the vote was postponed as a result of some political blocs not deciding on their candidates for the ministries.”

He added that "it is too early to announce the completion of the cabinet due to the existence of disagreements between the political blocs," indicating that "the absence of a fully empowered government is having a negative impact on the country."

Al-Saadawi pointed out that "there are major obstacles facing the prime minister-designate, even from within the coordination framework and the rest of the national space, which requires more consultation and effort to convince the blocs to proceed with presenting the cabinet and voting on it within the House of Representatives."

He pointed out that "Al-Zidi has a strong incentive to complete his cabinet through consultation and understanding with various political forces."

Regarding the challenges facing the new government, Al-Saadawi explained that "the first of these is the financial file," expecting "its move towards raising the exchange rate of the dinar to reduce the deficit in the 2026 budget," considering "this a difficult decision in addition to the security challenges in the region, especially the American-Iranian war and the repercussions it imposes on the country."

He concluded by saying that "the next government needs a clear economic and security vision to keep Iraq away from the region's conflicts." link

💱 Decoding the Three Zeros: Redenomination or a Path Toward Potential Future Revaluation?

💱 Decoding the Three Zeros: Redenomination or a Path Toward Potential Future Revaluation? 🚀📊

The discussion around removing zeros from a currency often blends technical monetary reform with expectations of economic revaluation. However, when analyzed through structural reforms, banking modernization, and macroeconomic fundamentals, it becomes clearer how such changes may indirectly support long-term currency stability and potential strength.

🧩 1. “Removing zeros” ≠ increasing real value

A redenomination is primarily a technical and accounting reform, not a direct increase in currency value.

✔ Simplifies pricing and accounting systems
✔ Reduces numerical complexity after inflation episodes
✔ Improves banking and financial infrastructure efficiency

❗ However, it does not automatically increase purchasing power or exchange value.

📈 2. Technical adjustment vs. real currency revaluation

A true revaluation occurs when a currency gains value in foreign exchange markets due to real economic improvements such as:

Fiscal and monetary stability
Controlled inflation
Productive economic growth
Strong institutional credibility
Improved balance of payments

💡 In other words, it is not a cosmetic change, but a fundamental shift in economic strength.

🏦 3. The REER framework: understanding real competitiveness

The Real Effective Exchange Rate (REER) is a key indicator for measuring a currency’s real strength relative to its trading partners.

$R E E R = N E E R \times \frac{P_{d o m}}{P_{e x t}}$

📊 When REER strengthens sustainably:

The economy becomes less inflation-distorted
External competitiveness improves or stabilizes
Investor confidence tends to increase

🏗️ 4. Banking modernization and structural reform

Financial system upgrades and banking modernization can play an important indirect role:

✔ Increased transparency and regulatory efficiency
✔ Reduced reliance on cash-based or informal systems
✔ Improved integration with global financial networks
✔ Better monetary policy transmission mechanisms

📌 While these reforms do not directly revalue a currency, they enhance trust and economic credibility, which are essential long-term drivers of currency strength.

🛢️ 5. Diversifying income sources: building resilience

When an economy reduces dependence on a single revenue stream (such as oil) and expands non-oil income:

Fiscal volatility decreases
Government stability improves
Long-term planning becomes more reliable

📊 This creates a more stable macroeconomic environment that supports currency fundamentals over time.

🌍 6. Can this lead to future revaluation?

From a purely economic perspective, the most accurate interpretation is:

👉 If structural reforms continue consistently
👉 If inflation remains controlled
👉 If institutions gain credibility
👉 If financial integration increases

💡 Then a currency may experience gradual strengthening of its real value over time, but this is never automatic or guaranteed.

⚖️ Conclusion

Removing zeros is a technical reform.
Revaluation is an economic outcome.

Between them lies the real driver of currency strength:
macroeconomic stability, banking modernization, and structural economic reform.

These factors do not guarantee appreciation—but they can create the conditions under which a currency may strengthen sustainably in the long run.

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#Economics #ExchangeRates #REER #MonetaryPolicy #FinancialReform #Macroeconomics #BankingModernization #CurrencyAnalysis #GlobalFinance #FXMarkets #EconomicGrowth

Monday, May 11, 2026

🏛️ POLITICS AND STABILITY: THE REAL FOUNDATION BEHIND THE DINAR

Al-Zidi and Al-Kadhimi discuss the political situation and the formation of the next government

Al-Zidi and Al-Kadhimi discuss the political situation and the formation of the next government

The Iraqi Prime Minister-designate, Ali Faleh al-Zaidi, met today, Saturday, with former Prime Minister Mustafa al-Kadhimi.

During the meeting, the overall situation in the country was discussed, and a number of issues related to Iraq’s interests were discussed, in addition to emphasizing the importance of coordination and cooperation between political forces in order to form a comprehensive national government capable of facing various challenges, meeting the requirements of the current stage, and enhancing stability and serving the aspirations of citizens throughout the country.

Both sides stressed the need to unify efforts and support the path of national solutions in order to ensure the stability of the political and economic situation in Iraq link

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🌍 Dinar Revaluation Mechanics: Understanding the WTO Accession as a Structural Turning Point #iqd

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The Secretary-General of Parliament: The date for the vote on the cabinet will be set for next Monday or Tuesday

The Secretary-General of Parliament: The date for the vote on the cabinet will be set for next Monday or Tuesday

The Secretary-General of the House of Representatives, Safwan Al-Jarjari, announced that the date for the vote on the cabinet has not yet been decided, indicating that the final decision is pending the presidency of the council, with the likelihood of it being held on Monday or Tuesday of next week.

Al-Jarjari said in a press statement that: “The House of Representatives has completed all preparations for holding the session to vote on the cabinet,” indicating that “it has been customary in previous government voting sessions to send invitations to political and diplomatic leaders, and things will become clearer tomorrow.”

He added that "tomorrow will see the start of sending invitations to the political leaders, the coordinating framework and the political council," stressing that "we are waiting for the Speaker of Parliament to set a date for the session, whether it will be on Monday or Tuesday." link