Sunday, October 8, 2023
The euro is the key to resolving the dollar crisis in Iraq, 8 OCT
The euro is the key to resolving the dollar crisis in Iraq
The euro is ranked second in the world after the US dollar, as it is considered one of the strong currencies in international trade. The euro is also the second most traded currency in the world after the US dollar, and the British pound is ranked fourth.
The Central Bank of Iraq is supposed to take the first step by diversifying its financial assets and increasing the share of the euro, in addition to the pound sterling, at the expense of the US dollar, as the Central Bank of Iraq’s foreign currency reserve is estimated at approximately 113 billion dollars.
The Central Bank of Iraq keeping a portion of its reserves in euros will not have any negative impact on the value of the Iraqi dinar, but it will preserve its value. An example of this is the Kuwaiti dinar, which is denominated against a basket of foreign currencies such as the dollar, euro, and pound sterling.
The Central Bank of Iraq could have pumped the euro currency into the currency sale window auction, after the strict measures imposed by the US Federal Reserve Bank and the US Department of the Treasury on the Central Bank of Iraq by selling the US dollar currency, with the aim of preventing the smuggling of the dollar into Iran, and therefore The goal of selling the euro in the currency selling window is to avoid the restrictions imposed on the Central Bank of Iraq by the US Treasury, and also to reduce the demand for the US dollar with the aim of reducing the gap between the official rate and the exchange rate in the parallel market.
The Central Bank of Iraq was supposed to establish its own platform, as this platform specializes in selling the euro and the pound sterling, and it can also be sold to citizens in cash, just as the euro is a global currency that the Iraqi merchant can deal with normally and smoothly in any country. It excluded Iran, so some foreign imports could be covered through euros instead of dollars.
Although I am against the idea of giving each citizen 3,000 US dollars to travel and smuggling hard currency out of the country, but at the same time, if the Central Bank of Iraq continues this policy, I suggest giving citizens the euro as well to travel outside the country in order to reduce the demand for the dollar. American.
Hoarded money:
In order to be realistic, unfortunately, there is a large percentage of the Iraqi people who save their money in the US dollar currency at the expense of the Iraqi dinar, and therefore it is very important to instill a culture of saving or trading in the euro instead of the US dollar among the citizens, in order to reduce the demand for the dollar by the citizens. Those who save their money in US dollars, and this will also aim to withdraw the dinar block from the funds hoarded by citizens, because the Iraqi government has a scarcity of the Iraqi dinar due to the explosive budget, specifically in operational expenses, and it is expected that there will be a deficit in the coming period in paying employees’ salaries. By the Iraqi government, because the dinar block at the Central Bank of Iraq is unable to cover operating expenses, which forces the Central Bank of Iraq to print the dinar, and this in itself is considered a great danger to the value of the Iraqi dinar and the high rate of inflation, and thus its consequences will be serious and negative forIraqi economy.
Euro is an investment currency:
The euro is considered an investment currency because it generally moves in an upward direction in the long term, as it rose from the end of last year from levels of 0.96 cents to 1.12 US dollars two months ago, meaning an increase of approximately more than 15%, and the euro currency is currently in the process of a deep correction as it has declined. To a level of approximately 1.04 US dollars several days ago, and now it is reeling at levels of 1.05 US dollars, and perhaps the rise will resume or the correction will be completed to levels close to the parity point with the dollar, and this in itself is considered an appropriate opportunity for the Central Bank of Iraq to buy the euro currency at a value of 10. One billion euros at the very least, and I personally saved part of my money in the euro currency, and it is expected that the euro currency will target levels of 1.15 US dollars and more during the first quarter of next year.
In the event that the Central Bank of Iraq sells part of the currency sale window auction in euro currency, a month worth two billion euros, that is, selling 100
Suppose that the Central Bank of Iraq pumped the euro currency into the markets when it was at a price of 0.96 cents at the end of last year, at the time when the dollar crisis began in Iraq, which resulted in reducing the gap between the official rate and the exchange rate in the parallel market very significantly, and at the same time achieved... Citizens who bought the euro at the time gained an estimated 15% profit.
Also, at the same time, the Central Bank of Iraq could have invested in the euro if it had kept part of its euro currency reserves, assuming 10 billion euros and sold it when it reached $1.12. It would also have achieved profits of an estimated 15%, or about 1.5 billion.
The question here is: Is the Central Bank of Iraq able to transfer part of its assets from the US dollar to the euro?
Or will he be a prisoner of the directions of the US Treasury and the policy of the US Federal Reserve? link
Foreign” banks and “fake” transfers... Parliament Finance reveals new details about the dollar crisis , 8 OCT
Foreign” banks and “fake” transfers... Parliament Finance reveals new details about the dollar crisis
10/7/2023
On Saturday, the Finance Committee in the Iraqi Parliament entered the crisis of the cash dollar scarcity expected in the country at the beginning of the year 2024, after the Central Bank’s decision, while it talked about “foreign” banks controlling the currency auction.
Committee member Muhammad Nouri told Shafaq News Agency, “There are a number of banks that control the window for buying and selling foreign currency, and they are non-Iraqi banks, and the conditions set by the Central Bank are applied to a pre-specified group before it sets conditions on the banks or companies so that they are The sole controller of the foreign currency buying and selling window.”
Nouri added, “Most financial transfers are (fake) under the pretext of purchasing goods, and here is an indication of the delay in real transfers, given that the fake transfers are supported and backed by a political group and armed factions affiliated with the economic parties.”
Nouri added, "But personal transfers for the purpose of study and treatment outside the country and simple trade, we find that they are real, but large transfers are not real because they are affiliated with the economics of the parties, and their purpose is to smuggle currency outside the country."
Despite these developments, the Central Bank of Iraq confirms that dollar deposits are guaranteed, and the citizen who deposited his money in dollars with any Iraqi bank previously or by 2024 has an inherent right to receive these amounts in cash and in US dollars.
The Central Bank had indicated that the reforms it is undertaking aim to achieve compliance of the bank and the Iraqi banking system in general with international compliance standards, thus preventing the dollar from reaching parties prohibited from obtaining it or speculating with it. LINK
"RV UPDATE" BY JEFF, 8 OCT
Jeff
The budget remains unapproved right now. The budget is not approved because of something they did to the budget specifically in the month of September [Amended it]. Prior to this event in September the budget was approved. They did something specifically in September making the budget unapproved...Parliament still has to approve the budget again.
Iraqi finance committee raises concerns over dollar scarcity and foreign banks' influence, 8 OCT
Iraqi finance committee raises concerns over dollar scarcity and foreign banks' influence, 8 OCT
Shafaq News/ Iraq's parliamentary Finance Committee expressed concerns about the looming scarcity of cash dollars in the country, expected at the beginning of 2024 after a decision made by the Central Bank. The committee cited the influence of "foreign" banks in controlling the currency auction, creating challenges in the market.
Committee member Muhammad Nouri revealed to Shafaq News Agency that several non-Iraqi banks dominate the buying and selling of foreign currency. He emphasized that the Central Bank's stringent conditions are applied to a specific group before being extended to other banks or companies, effectively giving these foreign banks significant control over the primary window for foreign currency transactions.
Nouri highlighted a prevalent issue where most financial transfers are fake, often claimed to be for purchasing goods.
He noted that these illegitimate transfers cause delays in genuine transactions. He pointed out that these counterfeit transfers receive support from political groups and armed factions associated with economic parties.
However, the Central Bank of Iraq has reassured citizens that dollar deposits are secure. Individuals who deposited their money in dollars with any Iraqi bank before 2024 are guaranteed the right to receive these amounts in cash and US dollars.
The Central Bank clarified that its ongoing reforms aim to align the bank and the broader Iraqi banking system with international compliance standards.
Saturday, October 7, 2023
Kurdistan producers warn no quick restart to Iraq-Turkey pipeline, 8 OCT
Kurdistan producers warn no quick restart to Iraq-Turkey pipeline, 8 OCT
Shafaq News/ Turkish Minister of Energy Alparslan Bayraktar has said the Kurdistan pipeline would be ready to restart – but local producers are not convinced.
Bayraktar, speaking at Adipec, said the Iraq-Turkey pipeline would resume operations this week. It will be able to provide 500,000 barrels per day to the market.
However, the Association of the Petroleum Industry of Kurdistan (APIKUR) has poured cold water on the plan.
Members of the producer group cannot produce oil for export until it is clear how they will be paid, it said. APIKUR reports its members are owed nearly $1 billion in overdue and unpaid arrears.
Delays “are costing Iraqis an estimated $1 billion per month in lost revenues”, said Myles B. Caggins III, spokesman for APIKUR.
He said APIKUR’s members were keen to work with the Kurdistan and Iraq governments. They could “reinstate these revenues and even increase them through maximising production. We believe this can be done quickly and efficiently, after payment arrangements are agreed and existing contractual arrangements are respected.”
DNO Iraq, Genel Energy, Gulf Keystone Petroleum, HKN Energy and ShaMaran Petroleum make up APIKUR.
The problem for the producers in Kurdistan is that the local government no longer has control over payments to them. That has passed to the central Iraqi government and there have been shortfalls in cash allocations.
In addition to the production stoppage, APIKUR has previously said its members have cut $400 million of capital expenditure this year.
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