MAINTAINING THE EXCHANGE RATE… PARLIAMENTARY FINANCE DETERMINES THE VARIABLES OF THE 2024 BUDGET
Today, Wednesday, the Parliamentary Finance Committee confirmed that the exchange rates of the dollar and a barrel of oil will be maintained in the budget for the current year 2024.
Committee member, MP Hussein Moanis, said in a statement to Al-Maalouma, “The government kept calculating the price of a barrel of oil, the quantity of oil exported, and the dollar exchange rate stipulated in the tripartite budget in the current year’s 2024 Without budget change.”
He added, “The Parliamentary Finance Committee has not yet received the changes that will occur to some tables in the current year’s budget in order to study them and then submit them to a vote in the House of Representatives.”
Muanis pointed out that “the changes that will occur in the current year’s budget will be made in the schedules without any change in their items,” noting that “the change in the schedules relates to added imports as well as spending.”
The House of Representatives approved, on Monday, June 12, 2023, after long deliberations between the government and parliament members that extended for months, the financial budget law for the three years 2023, 2024, and 2025, as the budget approved more expenditures and Investments as a direct result of the increase in oil revenues, which constitute 90% of the country’s revenues.
Note: If any certain podcast is mainly about politics and social opinions or any political –type picture posted on Marks videos I will not do many notes. So if the notes are short or non- existent….…that may be why.
Monday News with MarkZ
Some highlights by PDK-Not verbatim
MarkZ Disclaimer: Please consider everything on this call as my opinion. People who take notes do not catch everything and its best to watch the video so that you get everything in context. Be sure to consult a professional for any financial decisions
Member: Can you clarify who has the authority and final say on the RV of the Iraqi Dinar? Is it the IMF, CBI, UST or who?
MZ: It is the US Treasury. But the UST is controlled by the western banking world elites ….That’s who has been stalling it. Iraq and BRICS has been doing everything to force them into a corner where they have no choice but to go. That is what we have been watching. It would have gone years ago if it wasn’t for the western banking world. Here in the US – the western banking elites representatives is the US Treasury.
MZ: MilitiaMan did a good video yesterday…Iraq is again discussing the change in dinar value openly. This makes more than 4 articles ect… in the last week. They are expecting a major change in the valuation of their currency soon. Also still talking about pegging to a basket of middle eastern currencies in order to compete with the US dollar.
MZ: Also in the news there seems to be big happenings in the Iraqi currency auctions. Bringing in much more dinar. They are making all the moves we expect to see just before a revaluation. They are telling us it is coming…
MZ: If we follow all the processed they have done in the last few months- it is very clear how close we are. .
MZ: IMO they are doing everything right to force the US treasuries hand. Iraq told us in Dec. they would totally de-dollarize after Jan 1….
MZ: From Zimbabwe: “ Govt set to announce new measures to stabilize Zimbabwe dollar” The inflation beast has reared its ugly head again. They have been tying more of its currency to gold in the past 2 years….. Look for an announcement in the coming days….possibly this week on the Zimbabwe dollar being gold backed. That is what I was told
MZ: I don’t know timing but can tell you that my bond folks are expecting a whole heck of a lot by the 24th which is in 2 days. Many of them are expecting to get 1% in fiat…..if this occurs we are arguably within days….
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Note from PDK: Please listen to the replay for all the details and entire stream….I do not transcribe political opinions, divisive social commentary, medical opinions or many guests on this stream……just RV/currency related topics.
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Sudani: Victory over ISIS necessitates changing the mission of the international coalition
Information/BaghdadPrime Minister Mohammed Shia al-Sudani stressed on Monday his rejection of any aggression on Iraqi soil or prejudice to its autonomy, while pointing out that the reason for the expansion of the conflict in the region is due to the continuation of the war in Gaza.
The media office of the Prime Minister, in a statement received by the information, that "Sudanese, received today the Dutch Minister of Defense Casey Olonggreen and her accompanying delegation."He added that "during the meeting, they discussed bilateral relations between the two countries, and ways to enhance cooperation in all fields, as well as the joint files that will be discussed during the Prime Minister's visit to the Netherlands, based on the official invitation submitted by the Dutch Prime Minister."
The prime minister praised "the efforts of the Netherlands in helping Iraq during its war against terrorism, within NATO," stressing his rejection of "any aggression on the territory of Iraq or prejudice to its autonomy."He renewed "the government's commitment to providing protection for diplomatic missions and advisors working in Iraq," pointing to "the government's decision to rearrange the relationship with the international coalition and move to another level of bilateral relations and cooperation with the coalition countries."
The Prime Minister stressed that "the reason for the expansion of the conflict in the region is due to the continuation of the war in Gaza and the brutal crimes committed by the occupation authorities against the Palestinian people," calling on "the international community to exert Pressure to stop genocide and policies of killing and starvation, as well as pressure to limit the opening of other fronts that lead to destabilization in the region and the world.
"For her part, Olonggren expressed her thanks "for the efforts of the Prime Minister in maintaining security and stability, and activating the good relations between Iraq and the Netherlands."
January 13th, 2024 – With the return of fluctuations in the exchange rates of the Dinar, the discussion about the necessity of getting rid of the “official rate” is renewed. The aim is to reduce the gap with the rate in the parallel market, by subjecting the local currency to global supply and demand, similar to other countries. However, there are many obstacles to this step, including the “unilateral economy” of Iraq which relies on oil and government revenue, and the absence of correspondent banks in Dinar currency, according to specialists. They also called for other possible solutions, such as “deleting zeros” from the currency, and withdrawing the monetary mass from citizens and transferring it to banks.
Mudhar Mohammed Saleh, the financial advisor to the Prime Minister, says, “The exchange rate of the Iraqi Dinar follows a fixed exchange rate system, and the process of setting the exchange rate is one of the tasks of the monetary policy of the Central Bank of Iraq as it is the independent entity, especially since Iraq primarily depends on oil sources that provide foreign currency. Thus, oil revenues are transferred to the Iraqi Central Bank, and the reserves follow a mechanism of exchange between the Dinar and the Dollar, considering that the Central Bank is the source of exchange between them.”
The exchange rates of the Dollar in the local market witnessed significant fluctuations in the past few days, where it suddenly dropped to 148,000 Dinars for every 100 Dollars, then quickly rose to 150,000 Dinars, and then continued fluctuating until it reached 154,000 Dinars for every 100 Dollars, after it was close to about 157,000 Dinars.
Saleh adds, “The balance and stability of the price in flexible exchange rate systems require a financial and banking market, where interest rates play a major role in the inflows and outflows of foreign currency. This is not available in Iraq, and the economy is unilateral, dependent on governmental oil revenues for foreign currency inflows, where the forces of supply and demand are not homogenous with the unilateral economy.”
He continues, “The economy sometimes faces a large deficit in the current account and in the balance of payments, and the general budget also faces a deficit. Here, governments resort to loans and are forced to reduce the national currency so that the foreign currency becomes expensive. This is what is called financing from inflation, and although this conflicts with the policy of the Central Bank, it is done in consultation with monetary and fiscal policies.”
He points out that “the function of the Central Bank, in general, is to maintain the exchange rate and its stability for a long period, but this depends on the nature of the current account and the balance of payments, whether there is a surplus or there is a long-term or stable deficit, and also the nature of the budget whether it is expansionary or contractionary. So, the issue is not easy, as all we need in the exchange rate is a circle for consultation and communication between monetary and fiscal policies to maintain its stability.”
It is worth mentioning that since the beginning of the exchange rate crisis more than two years ago, many options have been proposed to control it, including printing new currency denominations like 100,000 Dinars, or deleting three zeros to control the rise in the value of numbers in cash transactions.
Iraq has suffered since the 1990s and during the imposition of economic sanctions, from significant inflation in the currency, which led the previous regime to print currency locally. After 2003, the previous currency was destroyed and new denominations were issued, and its exchange rate was fixed against the Dollar by order of the then Civil Administrator of Iraq, Paul Bremer, who revealed the new currency and its exchange rate against the Dollar.
On his part, the economic expert Nasser Al-Kinani, indicates, “Regarding the fluctuation of the Dinar, the Central Bank used to sell the Dinar at 1,118 per Dollar, then it was changed since the arrival of the previous Prime Minister Mustafa Al-Kadhimi to power and the emergence of the white paper, where its price increased and became 1,450 Dinars. In addition to that, the Iraqi Dinar began to rise until it currently reached 1,530 Dinars for every Dollar in the local market, but despite this, solutions can be found for this problem.”
He explains, “The solutions revolve around reprinting the currency anew and zeroing it, especially if the printing process is accompanied by a process of retrieving hoarded money inside homes to the banks. From here, it is possible to fix the Iraqi Dinar by giving banks a percentage for each citizen who owns an account or opens an account inside the bank, for example, 10 percent, to be a deposit for the citizen inside the bank.”
He continues, “The above steps will lead to solving the issue of imports that the government is currently suffering from and trying to control to limit smuggling. The stability of the currency and the activation of local industry and agriculture will overall lead to solving all economic and currency problems.”
Iraq, according to the Central Bank of Iraq’s website, has 80 operating banks, including 62 local and 18 branches of foreign banks.
It is worth noting that the Iraqi banking sector is neglected by citizens who have lost confidence in it. According to World Bank figures released last year, only 23 percent of Iraqi families have an account in a financial institution, which is among the lowest rates in the Arab world, especially since those account holders are state employees whose salaries are distributed to public banks at the end of each month. However, these salaries also do not remain long in the accounts, as queues quickly form in front of banks from employees withdrawing their salaries in cash and preferring to keep it in their homes.
On his part, the financial and economic expert Mustafa Akram Hantoush, points out, “The local Iraqi currency is printed by the state and gives its value in exchange for other currencies or gold, that is, currencies or metals in the global supply and demand market.
Hantoush notes, “Currencies exposed to supply and demand are currencies that have countries and have correspondent banks for their currencies. For example, the Dollar, there are banks that correspond in Dollars so that the whole world receives and trades in it, therefore such a currency is considered a flexible currency with variable prices.”
He continues, “The Iraqi Dinar, used to have correspondent banks with a global currency that is used in international trade, and here its demand would be higher, thus increasing the value of the Dinar. However, Iraq as a country currently does not have correspondent banks, therefore its national currency is a local currency and does not subject to global supply and demand, as it is a currency issued in exchange for other currencies, and the process in it is fixed and does not rise to be a global process.”
It is worth mentioning that Washington intervened in the Dollar smuggling crisis last year, and Iraq was subjected to the global SWIFT system, creating a gap between the parallel and official markets, and increasing the loss of confidence in Iraqi banks. Dozens of banks were subjected to American and Iraqi sanctions without addressing the depositors’ money, in addition to most banks currently being involved in smuggling operations, as confirmed by the U.S. Treasury Department.
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Parliamentary Finance reveals the most prominent amendments that will be made to the 2024 budget, 22 JAN
Today, Monday, the Parliamentary Finance Committee revealed the amendments that will be made by the government to the 2024 budget tables, noting that the variables in the 2024 budget tables will be sent to Parliament next month for approval.
Committee member, Moeen Al-Kadhimi, said in a statement followed by Al-Eqtisad News, that “the Finance Committee met yesterday, Sunday, with the Minister of Finance, in which many topics were discussed related to the changes that will be made in the 2024 budget tables.”
He added, "The most important variables are an increase in the allocations for rations, social care, and allocations for purchasing rice and wheat from farmers, in addition to an increase in allocations related to the electricity sector and the costs of oil production."
Al-Kadhimi indicated that “the amendments to the 2024 budget will be submitted to the House of Representatives next month for approval.” link
