Saturday, June 22, 2024
Economic Clarification: Why Do Iraq’s Reserves Not Rise Despite The Rise In Oil Prices? , 22 JUNE
Economic Clarification: Why Do Iraq’s Reserves Not Rise Despite The Rise In Oil Prices?
Money and business Economy News – Baghdad Today, Friday, economic expert Mahmoud Dagher explained the reasons for the failure of Iraq's financial reserves to increase despite the rise in oil prices, while stressing that the country has no hope except by diversifying its output and pressuring spending, especially operational.
Dagher said in an interview with Al-Iqtisad News, “Reserves are not measured by size, but by adequacy, and there are two indicators of adequacy: the adequacy of reserves to cover imports without any exports, and I believe that it reaches Iraq with the existing reserve remaining for approximately 12 months, which is an excellent coverage of foreign reserves for exported currency.”
He added: "If we want to answer the question of why the reserves, which exceed 100 billion, do not increase despite the rise in oil prices, this is due to two reasons. The first is direct and is the result of the Central Bank’s sales rising to 300 million dollars per day to cover imports."
He pointed out, "The second reason is indirect and results from the increase in public spending, especially the salary bill, which, along with retirement, subsidies, and nationals, has reached close to 100 trillion."
The economic expert stated, "The adequacy of reserves is good; since Iraq is an oil economy, it is difficult to rely on adequacy alone due to the possibility of a decline in the price of a barrel." 06/21/2024 - https://economy-news.net/content.php?id=44468
"RV UPDATE" BY TEXAS SNAKE, 22 JUNE
TEXAS SNAKE
Texas Snake, [06/21/2024, 6:30:46 p. m.]:
It's been awhile since I last posted however I only post when the info is confirmed. Well the WF Banker responsible for 5 states exchange centers has advised that all his trained specialists will be on a one hour call to their assigned positions all this coming weekend and were cautioned this event could very well be activated so they should be aware of their duties for the next several weeks.
First they schedule appointments then they operate the necessary machinery at the various banks to complete the exchanges for US currency.
Between Oil And Debt: Iraq Faces The Challenges Of The Budget Deficit, 22 JUNE
Between Oil And Debt: Iraq Faces The Challenges Of The Budget Deficit
June 21, 2024 Baghdad/Al-Masala Al-Hadath: The budget deficit for 2024 in Iraq constitutes a major challenge and reflects the gap between government revenues and expenditures, which imposes pressure on the national economy and leads to an increase in public debt.
Iraq relies on oil revenues as a main source of financing the budget. As oil prices fluctuate, it becomes difficult to predict revenues accurately.
Iraq resorts to borrowing to finance the deficit, which increases the size of public debt and negatively affects the cash reserves of central banks.
Economist Nabil Al-Marsoumi revealed the risks of the budget deficit for the year 2024, amounting to more than 64 trillion dinars.
Al-Marsoumi said in a blog post followed by Al-Masala, “The budget deficit amounted to 64.025 trillion dinars, as the revolving balance in the Ministry of Finance’s account reached 1.571 trillion dinars.”
He continued, “The increase in the selling prices of exported crude oil amounts to 16.607 trillion dinars,” noting that “remittances deducted from the legal reserve of government banks are equal to 5 trillion dinars.”
He added that “loans from government banks amounted to 3 trillion dinars,” noting that “the discount on treasury transfers at the Central Bank of Iraq amounted to 20.041 trillion dinars.”
He pointed out, “National bonds are worth 5 trillion dinars, and total internal borrowing reached 33,041 trillion dinars, and external loans amounted to 12,806 trillion.”
He stated, “Many observations were made regarding the budget deficit, including a decrease in the Ministry of Finance’s revolving balance from 23 trillion dinars in the 2023 budget to 1.571 trillion dinars in the 2024 budget.”
Al-Marsoumi added, “It has been observed that there is a heavy reliance on internal and external borrowing to finance the budget deficit, which exacerbates the size of internal debt, especially which currently stands at 79 trillion dinars, in addition to its negative impact on the cash reserves of the Central Bank of Iraq and other Iraqi banks.”
He concluded that “there are three sources in financing the budget deficit, which are deficit financing, internal and external borrowing, and the revolving balance of government accounts,” noting that “using the expected increase in oil revenues amounting to 16.607 trillion dinars to finance the budget deficit is something new because this increase is supposed to be added.”
The expected oil revenues. In this case, the budget will have been built on the assumption of exporting 3.5 million barrels per day at a price of $83 per barrel instead of $70, which is a non-conservative price and full of risks for two reasons.
The first is that Iraq’s oil exports are less than 3.5 million barrels per day due to OPEC+ restrictions. The second is that The high price of oil adopted by the budget is unrealistic and very optimistic, which may expose the budget to other imbalances as a result of these two assumptions not being met.” https://almasalah.com/archives/92260
"RV UPDATE" BY PIMPY, 22 JUNE
Pimpy
When you hear somebody tell you that, 'Hey in one country you cannot move forward and rebuild with huge projects with an exchange rate of 1,320 of your currencies for $1' just say, 'Oh yeah? Look at Vietnam who has 26,000 of their currencies for every $1 and they continue to move forward.'
---Pimpy
Sudani is really doing a remarkable job. ...This project [oil pipeline] he's getting ready to fund, if it's successful and he pulls this off, this is really going to change the landscape for Iraq, especially against other oil powerhouses in the region...This is going to be a pretty big move.
The four scenarios for how the “currency exchange” might unfold when altering the exchange rate of the Iraqi dinar, 30 SEPT
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