Tuesday, April 23, 2024
Deputy: The budget schedules will arrive next week , 23 APRIL
Deputy: The budget schedules will arrive next week
4/23/2024 Information / Baghdad...
Member of the Parliamentary Finance Committee, Representative Mudar Al-Karawi, confirmed on Tuesday that the 2024 deadlines will arrive next week.
Al-Karawi said in an interview with Al-Maalouma, “The 2024 budget schedules will reach Parliament next week according to our expectations,” pointing out that “the Finance Committee will discuss all its items during its sessions.”
He added, “There is a vision regarding resolving many files, including Baghdad’s lecturers and administrators and allocations.” “We seek to guarantee the rights of all segments in the budget schedules, in addition to creating high flexibility in their implementation through coordination with all relevant parties.”
It is noteworthy that Parliament is awaiting the 2024 schedules from The government is in order to study it before voting on it so that it can take its course in actual implementation.” LINK
"RV UPDATE" BY PIMPY, 23 APRIL
Pimpy
Al Sudani when him and his delegation was here to say they were busy would be an understatement. Did you see all the meetings? Meeting with the president, Secretary of State, the Pentagon... The Czech Prime Minister, Homeland Security...Signing 18 memorandums of understanding...JP Morgan...Iraq was really busy when they were here. They saw a lot of people. This is a good sign.
Question: "What are the proper notes to hold for investment purposes?"
Any of the currency is okay to hold at the moment so there's no specific denomination. If they do delete the zeros or they re-denominate they're going to have whole new currencies. That's why there's no rush to try to find lower denominations because they're going to replace all of them including the lower ones. But there is a possibility that they don't re-denominate and we get lucky and they change the exchange rate and keep the zeros on the currency.
INTEL FROM CBI BANKER CONTACT IN IRAQ BY GOLDILOCKS, 23 APRIL
GOLDILOCKS
CBI Banker in Iraq Contact:
Dee and I just finished a conversation with our CBI Banker in Iraq with ties to the Foreign Remittance Department.
Iraq is currently increasing the amount of Gold they hold that will support their currency.
Iraq is encouraging people to use a debit card as much as possible, so they can get used to becoming a cashless society.
As far as a rate is concerned, they are looking to move from 1,310 to 1,000 soon.
Many new agreements have been signed with other countries to increase the demand for their currency as of late.
He expressed that they still need more goods to sell to increase their money velocity.
Iraq has not moved to a position of removing the three zeros on their currency just yet.
It was mentioned that they are still working with their Foreign Corresponding Bank to complete their banking reforms this year.
© Goldilocks
New financial bonds...bank interest thwarts the government's plans to close the deficit, 23 APRIL
New financial bonds...bank interest thwarts the government's plans to close the deficit
Monday, 04-22-2024, Karar Al-Assadi 356The Iraqi government has resorted to issuing financial bonds and selling them to citizens with the aim of filling the financial deficit in the budget and also to enhance the state’s non-oil revenues, which is a slogan raised by Prime Minister Muhammad Shiaa Al-Sudani to his government, and while specialists praise this approach, others identify obstacles that do not encourage the success of this experiment due to the lack of interest.
Banking achieved by “freezing” millions of dinars in exchange for revenues does not constitute a temptation to attract the citizen.
Economic expert Mazhar Muhammad Saleh says, “The bonds currently in circulation (Injaz), which were recently issued by the Ministry of Finance, are one of the medium-term government debt instruments,
which differ from treasury transfers as a debt instrument also in terms of maturity dates and the interest granted or paid, as
treasury transfers are mostly directed.” To the banking system, while
Enjaz bonds are mostly a means of borrowing to the public.”
On April 15, 2023, Rafidain Bank announced the issuance of “Enjaz” bonds to citizens, offering them in two categories, the
first in the amount of 500 thousand dinars with an annual interest of 6.5 percent, paid every six months for a period of two years, and the
second in the amount of one million dinars with an annual interest of 8.5 percent every six months for a period of four years.
He added, “These bonds were issued for the purposes of financing part of the planned deficit in the federal general budget for the year 2024, and engaging in direct borrowing from the public of lenders, especially those who have savings or financial surpluses, and
at the same time have the desire to invest their surplus funds in these highly collateralized sovereign bonds, as
they are subject to... (Injaz) bonds for the credit rating of the Republic of Iraq, which is currently set at grade B, similar to nearly 80 countries in the world.”
He continues, “We believe that the bonds finance 7 to 10 percent of the planned deficit in the annual general budget, through the contribution of the public of lenders by investing their available financial surpluses by possessing these bonds in return for the government receiving cash amounts that contribute to filling the deficit in public expenditures during the period.” Fiscal year 2024.”
Mazhar points out that “government bank branches undertake the sale of these bonds to the public and provide the holder of that bond with an electronic document first,
then he is provided with a paper document showing the details of the single bond that he will be in possession of.
The bond is also issued in several denominations, such as the half-million dinar denomination and the one million dinar denomination.” The maturity periods also vary.
He explains that “the one million dinar bond earns an annual interest rate of 8.5 percent and is paid every six months, and its maturity is four years, that is, the date of its amortization.
He also notes that the bond sale, which began on April 15, will continue to be offered until May 15 of next year.”
It is noteworthy that “Enjaz bonds are the highest in interest after the (Emaar) bonds and (Building) bonds that were offered in previous years, in which the interest rate reached 7 percent annually, and the holder of the bond can transfer its possession back to another holder, as government bonds are among the Preferred debts cannot collect interest or at the time of their repayment, so they can be mortgaged as excellent collateral.
Thus, holders of government bonds can liquidate the bond as a financial instrument and convert it into cash immediately by promoting it for sale in the secondary financial market and at any time before its maturity date and recovering the principal amount of cash paid in return. “Possession.”
The Ministry of Finance had previously announced the launch of a new issue of government bonds under the name “Injaz” for public subscription, indicating that
they are government bonds denominated in the Iraqi dinar in the denomination of 500 thousand dinars, for a period of two years with an annual interest of 6.5 percent paid every six months, and a bond of the denomination of one million dinars for the term. Four years with an annual interest rate of 8.5 percent, paid every six months.
For his part, the economic expert and professor of management and economics at the Iraqi University, Abdul Rahman Al-Mashhadani, explains, “
This is a normal measure taken by most governments in the world, and Iraq is not the first country to do it when it needs financing to fill the deficit or for investment projects, as it sometimes issues these bonds to achieve goals.” Specific, for example, building bridges, dams, or specific services,
but the purpose of these bonds in Iraq is to fill a deficit in the general budget and as a measure to withdraw liquidity from the market.”
He added, “These bonds have an issuance period.
For example, the half-million dinar bond has a duration of two years, and the million-dinar bond has an issuance period of four years
After that, the Ministry of Finance is obligated to return the bond amount to the buyer or extend it in the event of strong demand for it, but the interest is paid every six months.” By the Ministry of Finance, and it is certainly possible to sell them through the Iraqi Stock Exchange, just like the shares of companies that are sold in this market.”
Al-Mashhadani explains, “When we talk about the deficit, we are talking about 80 or 92 trillion dinars, which is the value of the budget deficit, and
this issuance of bonds worth two trillion dinars, or even if it was worth four trillion dinars, it cannot cover the entire budget deficit, so it is an attempt.” To create a kind of culture for individuals to invest in financial instruments such as stocks, bonds, and banks in order to obtain financial interest.”
He added, “These policies are not considered to be very successful, and
this issuance can mainly benefit banks, but
the vast majority of citizens do not believe that they will benefit from purchasing these bonds.
For example, the average Iraqi family has the ability for a citizen to buy, for example, 10 million dinars in bonds, which means 10 bonds worth One million dinars, in order to obtain an interest of 8.5 percent, which is not a large percentage and does not constitute a rewarding return for what was invested.”
Al-Mashhadani points out that “commercial work can achieve a profitable return much greater than government bond returns.
Investing one million dinars in the market, for example, enables an individual to recycle it several times in the market, in contrast, and obtain large profitable returns equal to or greater than the amount invested, as long as There is inflation, and there are high profits from investment returns in commercial markets.”
On June 12, 2023, the Iraqi Parliament voted on the federal budget law for the years 2023, 2024, and 2025, in an initiative that is the first of its kind in the country’s history in terms of the size of the budget as well as the number of fiscal years, with a value of 197 trillion and 828 billion dinars, with a financial deficit of 63 trillion. One dinar, which is approximately one-third of the budget.
In turn, the economic expert, Hammam Al-Shamaa, agrees with Al-Mashhadani, that
“the goal of announcing the sale of government bonds to citizens and institutions is to fill the deficit on the one hand and provide financial liquidity on the other hand, since the
total monthly spending at the present time exceeds eight trillion dinars, among the Central Bank’s sales.”
The currency selling window does not exceed five trillion dinars per month.”
He continues, “Therefore, they need liquidity to cover expenses, and this liquidity is expensive, and
the deficit is very large, reaching 35 percent of the gross domestic product, and
it is a cost that falls on the shoulders of future generations.
Government spending is now taking place at the expense of the future, and this year itself must be recorded. It is an inaccurate financial policy with dimensions.” “More political than economic dimensions.”
It is noteworthy that the Ministry of Finance recently issued government bonds to contribute to society’s contribution to the development of the Iraqi economy, as the
subscription funds contribute to financing economic development projects and achieving financial stability in the country. https://www.non14.net/public/166281
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