Masrour Barzani and al-Khanjar agree on the necessity of stabilizing the situation in Kirkuk
Shafaq News / The Prime Minister of the Kurdistan Region (KRI), Masrour Barzani, received Khamis al-Khanjar, the leader of al-Siyada Alliance, on Thursday.
During the meeting, the political situation in Iraq was discussed, as well as the importance of resolving issues between KRI and Baghdad based on the constitution and agreements, according to a statement from Barzani's office.
Recent events in Kirkuk were also a focal point of the discussions, with both sides expressing concern about the use of violence against civilian protesters. They also agreed on the necessity of stabilizing the situation in the city.
Recent events in Kirkuk unlikely to disrupt upcoming local elections, MP says
Shafaq News / Sabah Habib Qadir, a member of the Patriotic Union of Kurdistan (PUK), in Kirkuk, ruled out on Thursday that the recent events in the province would affect the course of the local elections scheduled to be held in October.
Qadir said in a statement to Shafaq News Agency that these events would not change the electoral process, and each component would receive its due in the province.
Qadir revealed decisions and initiatives launched by Iraq’s Prime Minister Mohammed Shia Al-Sudani during his meeting with representatives and components of Kirkuk. These decisions included changes in the leadership of Kirkuk operations, the formation of an investigative committee into the Kirkuk events, the release of detainees, and the cessation of raids in Kurdish areas, preparing them for the upcoming local elections.
The parliamentarian emphasized that Al-Sudani acknowledged the recent protest victims as "martyrs" and rejected any component in Kirkuk deviating from the path of the law, with the consensus of all political forces.
Regarding the return of the Kurdistan Democratic Party (KDP) to its political headquarters, Qadir stated that it is a political right for every party to exercise its activities, but the recent crisis should not lead to the loss of innocent lives.
Earlier, dozens of protesters, mainly from Arab and Turkmen political factions in Kirkuk, blocked the main road linking the province to Erbil in protest against the Kurdistan Democratic Party's intention to return to open its headquarters in Kirkuk, as per the political agreement with the State Administration Coalition, which includes the political forces that formed the current federal government under the leadership of Al-Sudani.
On Saturday evening, Kirkuk witnessed the descent of dozens of Kurdish protesters in areas mostly populated by members of their community, demanding the reopening of the road and an end to the sit-ins in front of the KDP headquarters. However, their demands were met with gunfire, resulting in casualties and injuries.
In response to the tensions accompanying the protests in Kurdish areas, Iraqi security authorities imposed a curfew in Kirkuk.
It is worth noting that the Kurdistan Democratic Party, led by Kurdish leader Masoud Barzani, had vacated its political headquarters and institutions in Kirkuk following the military operation carried out by the federal government in the disputed areas between Erbil and Baghdad after the independence referendum conducted by the Kurdistan Region in September 2017. This operation led to the withdrawal of Peshmerga and Asayish forces from those areas.
Central bank digital currencies (CBDCs) have emerged as a transformative force reshaping the world of currency and finance. Among the nations embarking on this groundbreaking journey is Russia, as it has recently launched its own digital ruble.
What is a CBDC? Why is Russia launching a digital currency now? To gain insights on these questions, we spoke to David Andolfatto, former Senior Vice President at the Federal Reserve Bank of St. Louis and Chair of the Economics Department at the University of Miami Herbert Business School, and Marco Santanché, a former Credit Suisse quant strategist, and the author of the monthly series Quant Evolution.
The transcript below has been abridged and edited for improved clarity. For the full version of the interview, please refer to our video podcast.
Hedder: How do CBDCs differ from traditional currencies and what potential benefits can they offer to the economy and to everyday people?
Andolfatto: The first thing we should understand is that most money today already consists of electronic money. Think of your checking account, for example. I’d liken a CBDC to just having an online checking account with your central bank. The main difference is that bank deposits are liabilities of commercial banks. CBDC is the liability of the government consisting of public money. Transactions using CBDC are free of counterparty risk and in particular, unlike a private bank, a central bank cannot fail. That's one difference that some people believe is important.
Would it make a difference for people at the retail level? I doubt it would. After all, what is the difference between an online checking account with Bank of America versus the Federal Reserve Bank? Now it is true that CBDC accounts would be automatically fully insured. They are, after all, legal tender. But this probably doesn't matter to most people because private bank accounts are already insured up to about a quarter million each. And for most people, I don't think that would be an issue.
There might be some benefits, I think, to the extent that it might serve as a basic public option, the same way the US Postal Service plays in delivery mail. But the net benefits are marginal at the retail level, at least.
Hedder: Is there any particular advantage then from the perspective of implementing monetary policy?
Andolfatto: The way monetary policy works today seems to affect bank lending rates more than bank deposit rates. Now, imagine a world instead where the Fed actually issued interest bearing CBDC, and they could adjust the interest rate on deposits as an instrument of monetary policy. You'd expect deposit rates in the banking sector to be more sensitive to Fed policy, and that might enhance the monetary transmission mechanism.
Hedder: How do institutional players view the introduction of CBDCs? What are some of the new developments among this group specifically?
Santanché: It's hard to predict, but we can consider the adoption by institutional investors of digital assets in general. So starting from there, studies have shown a surge in the trading volume of digital assets, although the majority of the major institutional investors would just hold maybe 1% or so of their assets in digital assets.
Of course cryptocurrencies are not the same as CBDC. We can view CBDC as a digital asset backed by fiat, which is almost like stable coins, but not exactly the same because stable coins are issued by companies that are for-profit and sometimes are not that transparent.
Hedder: It has been reported that a digital ruble might help Russia evade US sanctions. What is your take on that? Why is Russia launching a digital currency right now?
Andolfatto: I can't claim to be an expert, but Russia is probably just following what many central banks are exploring. And researchers at central banks are somewhat intrigued at the possibility of what this type of technology permits them to do.
A CBDC is not really going to help Russia evade sanctions. Russian citizens already have access to digital rubles in the form of bank accounts, just like we do. We have access to US digital currency in our bank accounts. What is the purpose of issuing a digital ruble if it's just going to be restricted to Russian citizens?
Now, it could potentially be used as a way to circumvent sanctions – for example, if Russia wanted to extend the privilege of opening up a CBDC account across its partners around the world. So foreign entities were permitted to open up accounts with the central bank of Russia. You could imagine a scenario where they could basically engage in bilateral or multilateral trade bypassing the dollar system altogether. That's a possibility, but they could already do that right now by just permitting these foreign entities to open up Russian bank accounts. So it's not immediately clear to me what the benefit would be of implementing this system through the central bank itself.
Hedder: Is it possible that the digital ruble could help bolster and strengthen Russia's actual currency?
Santanché: This is a very remote possibility in the sense that not many people actually support digital ruble, even among Russians themselves, due to the fear that this could be a tool for manipulating the economy or maybe monitoring the users.
I don't think it's an easy step to just adopt the digital ruble for trades, and it is unclear what impact it will have on the ruble itself. The most important thing is, first of all, we need to see adoption outside Russia. We need to see the digital ruble being used for actual transactions, for commodities and the likes. There are already discussions with China, and with the partners of Russia. So that could be possible. Eventually, that could go into different markets, but I think it's very remote at the moment.
Hedder: How might the introduction of CBDCs impact the role of the dollar as the world's primary reserve currency?
Andolfatto: My own view is that it's not likely to impact the role of the US dollar as a global reserve currency, if any foreign entity implements a CBDC. Things like trade policy and the willingness to run current account deficits matter much more. Now a related question is, how might the introduction of CBDC by the Fed affect the global demand for the US dollar? There is a potential that if the Fed were to make its CBDC available, say to foreign firms operating in the global supply chain, that might have a measurable impact on the global US dollar demand. It may to some extent displace emerging stable coins like Tether, for example, from taking that business. Generally speaking, there's a role for CBDC possibly to disintermediate large parts of the shadow banking sector.
Santanché: It's an interesting point in the sense that when we talk about central banks issuing decentralized currencies, who are the actual targets and why are they trying to provide an alternative to the fiat currency as we know it? I do think there are some use cases. Using CBDCs for transactions will be the first use case, and then we can think about financial markets and how investors and hedge funds could actually trade using these currencies or trade on the appreciation or the valuation of these currencies.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Question: If IQD and VND have agreements…will they not float up together? MarkZ: I do not expect a float. But, I am prepared in case there is one. I expect a substantial change in value …then maybe a small float.
...we are starting to see changes in bank values etc. But, not an open trade on them yet...We have seen this in the past and it’s our theory that they are preparing the process when we see those rate changes. Is this the one where they actually pull the trigger???...The banker side has a lot of anticipation for late this afternoon
...
We have bank personnel keeping us abreast if any of these currencies become “tradable”...We will see what materializes.
There are interesting things showing on currency converters…from the Forbes one to the EIX…. There are some interesting values showing on many of our currencies... There are a lot of “inconsistencies” on currency calculators right now. We are seeing Bolivar made it up to .35 cents. (doesn’t mean you can exchange it right now) We tried... Dong rates have also been bouncing around...
Member comment: [Guru] Frank26 says he knows someone with contracts in both Iraq and Vietnam who wanted to expand. His financial advisors told them wait…as both countries are about to change in a huge way. MarkZ: That would be accurate. The sheer amount of business those 2 countries do with each others currencies that both hold in their foreign currency reserves is huge. They have to both go at once. IMO.
We just need to get through the very end of what appears to be the end of our journey. They are doing a good job on keeping people quiet. They have cracked down even harder on leaks. They absolutely do not want anyone to know ahead of that money is moving. Still hearing from the Iraqi side that…politicians are talking about a 1 to 1 rate yesterday in Iraq.
I certainly expect more than that. Lots of rumors from Iraq that we may see the new rate this week. Just try to stay grounded…the news is all over the place. Member comment: Some gurus say it will happen within 24-48 hours. Markz: A lot of people at the upper levels of the banking world are saying that….
Political movement: Washington does not want stability in Iraq and is angry with the people's satisfaction with the government
The Secretary-General of the Jihad and Construction Movement, Jawad Rahim Al-Saadi, confirmed on Thursday that America and the enemies of Iraq do not want the stability of the situation, especially the security situation in the country, pointing out that what annoys them most at the present time is the people's satisfaction with the government.
Al-Saadi told Al-Maalouma, "Iraq possesses strong intelligence services that are able to detect and thwart any attempt to cause a security breach or terrorist operation from outside the country before entering Iraqi territory."
He added, "Iraq began to recover in security after achieving victory over terrorism, but there are those who are trying to raise problems and problems after finding that there is satisfaction and acceptance by the people towards the Sudanese government."
And he indicated that "what angers the enemies of Iraq most, including the American side, is the people's satisfaction with the government."
Al-Saadi indicated that "there are those who seek to ensure the stability of the country and the continuation of security tensions in various regions and governorates." link
----
US Treasury Draining Fed Repo Market | Andy Schectman
Andy Schectman updates us on the latest moves toward de-dollarization and foreign countries moving toward trading in local currencies.
Here in the U.S., Schectman explains the ominous debt situation and the necessity for further debt monetization by the Fed.
These trends can only cause more inflation and a destruction of savings, he says.
Report: Iraq maintains its credit rating thanks to political stability and the tripartite budget
The Ministry of Finance confirmed on Tuesday that Iraq maintained its credit rating of B-/B with a stable outlook, according to S&P.
According to a statement released by the ministry, Iraq has maintained its credit rating of B-/B with a stable outlook in the latest report by Standard & Poor’s (S&P) credit rating agency. The report emphasizes Iraq’s financial and economic stability.
“The new classification reflects the ongoing economic and financial reform policy pursued by the Ministry of Finance. Additionally, it is a result of maintaining a level of foreign currency reserves that exceeds the external public debt and fulfilling other external financial obligations due to the stability of crude oil prices,” she explained.
The ministry stated that the report used several indicators for its classification, with the most significant being the Iraqi parliament’s approval of the tripartite budget for the years 2023, 2024, and 2025. This budget aims to revive infrastructure projects and meet economic needs. Furthermore, the ministry added that the formation of the government at the end of 2022 has led to a state of political stability.
The report stated that a significant current account surplus is expected, which is in line with economic expectations. This surplus will further strengthen Iraq’s foreign currency reserves and support its ability to repay debt obligations over the next 12 months.
The agency has predicted that the economy is expected to grow at a rate of 2.6% annually from 2023 to 2026. This growth is attributed to an increase in oil production, which will have a positive impact on the non-oil sector. Additionally, the annual inflation rates are projected to decrease to 4% by July 2023, down from 5-6% in 2021 and 2022. This is due to the government’s efforts to revalue the currency, implement price control measures, and provide support for food and energy prices.
The report from the agency suggested that Iraq’s credit rating could be improved if the country can achieve a high rate of economic growth, diversify its public financial revenues (both from oil and non-oil sources), increase the per capita income share of national income, and continue implementing financial and economic policy reform measures.
If we had about a million Americans citizens all of a sudden came out millionaires instantly that would be a really good shot in the arm for America’s structure wouldn’t it? It would…
[Iraq boots-on-the-ground report]
FIREFLY: The television is now showing the CBI now has finger prints and web cameras when purchasing dollars for travel abroad. They’re not letting anything slip anymore.The purpose Sudani said is the CBI is happy to do this because some people are still pulling tricks and getting away with buying and selling more dollars. This will help curtail this corruption.
FRANK: Every form of corruption is being removed. And every form of corruption is stealing the Iraqi dinar.
--------
FRANK : If we had about a million Americans citizens all of a sudden came out millionaires instantly that would be a really good shot in the arm for America's structure wouldn't it? It would.
FIREFLY: They're telling us the official rate technically is 1132. They say in news about budget has words in it saying the exchange rate will be adjusted.
FRANK: The CBI told you this?
FIREFLY: Yes...And it will be retro to January 1st...
FRANK: This is Earth shattering. Powerful...If they lift the three zeros can you live with $1.13?
