Sunday, July 28, 2024
Political Parties Control The Sale Of The Dollar.. A New Threat To The Stability Of The National Economy, 28 July
Recently, there have been reports that political parties are controlling the sale of dollars in the financial markets.
This news has raised widespread concern among citizens and investors, as it is feared that this control will lead to manipulation of exchange rates and the creation of a black market that will negatively affect the national economy.
These developments come amid volatile economic conditions and a turbulent political landscape, which increases the challenges facing the government in maintaining currency stability and providing a secure economic environment.
Economic expert, Diaa Al-Mohsen, says, “The dollar exchange rate on the black market will not rise to more than 1,500 dinars,” accusing “political parties of controlling the sale of the dollar, as well as colluding with the monetary authority.”
He added, “Restricting the sale of dollars to travelers to certain exchange companies confirms that these companies are owned by large political blocs that benefit from the process of buying and selling dollars, and they are intended to obtain the largest share of foreign currency sales.”
He explains that “the Central Bank and the executive authority are fully aware of the political parties that control the dollar sales operations in the country, after they were restricted to certain companies.”
Al-Mohsen continues, “The dollar exchange rate will not reach high levels, especially since there is cooperation between the monetary authority and those who sell dollars on the black market, such that this cooperation ensures that the parallel exchange rate does not rise to more than 1,500 dinars per dollar.”
For his part, the official spokesman for the currency market in Sulaymaniyah, Jabbar Kuran, revealed the reasons for the rise in the exchange rate of the US dollar against the Iraqi dinar in the parallel market.
Jabbar Kuran says, “The issue of the rise in the exchange rate of the dollar against the Iraqi dinar is related to the financial measures taken by the Central Bank of Iraq.”
“The Central Bank of Iraq took some good measures in the past, but the increase that has occurred now is due to other measures that the Central Bank has not taken yet, including that the bank decided that foreign dealings are not limited to the US dollar only,
but this measure has not been taken yet, as well as not linking all banks to the electronic platform and stopping work on it with the exception of only seven banks, which do not accommodate the foreign trade exchange process that reaches about 50 billion dollars annually, and I do not expect those seven banks to accommodate this volume of trade exchange. ”
He added, "One of the other reasons that led to the rise in the exchange rate of the dollar against the dinar is the reduction in cash injections by the Central Bank of Iraq, except for this day."
He explains, “The demand for the dollar these days is abnormal, and I do not expect that opening the dollar exchange window for travelers at airports will be a reason for the dollar exchange rate to rise, even though now is the travel season.”
He states that “the large number of exchange offices and companies in Iraq and Kurdistan and the inability of the Central Bank of Iraq to meet their needs for the US dollar, as there are about 1,200 exchange companies in Iraq, and about 2,500 companies in Kurdistan, so far, have not merged with each other to reach about 400 actual companies, so all of these companies and offices need more than 50 million dollars daily.”
Kuran confirms that “the rise of the dollar this time is not linked to a political or economic crisis or external factors, but rather is linked to the measures of the Central Bank of Iraq, and it is possible that the bank will control this rise,” expecting the exchange rate of the dollar to rise to more than 150 thousand dinars for every 100 dollars, while ruling out at the same time that it will reach high levels as happened in the past periods.”
Since Eid al-Adha, the dollar exchange rate has risen to more than 152,000 dinars in the parallel market and exchange offices, after hovering around 145,000 dinars per 100 dollars.
Prices have fallen again over the past week, with the dollar now hovering around 149,000 dinars per $100.
The Central Bank imposed a mechanism that prevents the delivery of dollars to travelers except at airports, which increased the demand for dollars in the parallel market after illegal trade was financed through the parallel market via travelers’ dollars. LINK
LATEST FROM MIKE BARA, 28 JULY
LATEST FROM MIKE BARA
The word I have is that Thursday night, the US Treasury told Iraq that if they didn't revalue their currency per the agreements "immediately," UST would force the issue. Iraq responded that they were holding up because of concerns about some smaller banks that they suspected were doing business with the Iranians.
They are determined that no RV funds make their way to Iran, because the two countries are historic enemies. UST responded by seizing the 5 banks, consolidating them into a single, manageable entity, and pushing the RV through.
Today, the Central Bank of Iraq made the announcement regarding this transaction. As far as I know, this is the last hurdle to the revaluation. More as I get it.👇🏻👇🏻👇🏻
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The “Bondholder” still has not been paid. He is expecting a call today.
Other than the MarkZ report that an announcement about lower denominations has been made in Iraq, There is nothing else to put out right now.
Iraq's billionaire surge, rampant corruption amid economic challenges, 28 July
The number of billionaires in Iraq rivals that of nine other countries combined, a stark reflection of the deeply rooted corruption within the state.
Corruption has plagued Iraq, exacerbated by the misuse of its budget, which official statements claim has led to the loss of $250 billion over the past 17 years. However, economists argue the actual figure could be nearly double.
The number of billionaires in Iraq rivals that of nine other countries combined, a stark reflection of the deeply rooted corruption within the state.
The Commission of Integrity (COI) is set to reveal the amount of money recovered and the measures taken to prevent further financial waste.
Many Iraqis are calling for transparency regarding governmental agreements, imports, and expenditures. On June 3, 2024, the Council of Representatives approved the amended Federal General Budget Law No. 2024, which allocates approximately 211.9 trillion dinars, a 7% increase from the previous year's budget.
Former Iraqi Finance Minister Ali Allawi previously stated that out of the over $1 trillion budget from 2003 to 2020, more than $250 billion was lost due to administrative corruption. Economists, however, estimate the loss to be between $400-450 billion, nearly 40% of Iraq's total budget. This squandered amount could have funded significant infrastructure projects, such as building 400,000 modern schools or 20,000 hospitals.
Experts cite fake and overpriced contracts, corrupt officials, mismanaged investment projects, and poor economic planning as major contributors to the financial drain. Since 2003, Iraq's workforce has grown from 850,000 to over 4.5 million, yet efficiency in public service sectors remains low, with only about 30% of the budget effectively utilized.
According to Haider Hanoun, head of the COI, Iraq ranks 154th out of 180 countries on the global corruption index. Hanoun admits that enormous sums have been stolen and transferred to international banks, with some funds even financing terrorism. The COI's 2023 report indicates that over 391 billion Iraqi dinars and $500,000 have been recovered, with an additional 82 billion dinars and $5 million prevented from being wasted.
Iraq’s Poverty Levels
The Strategic Center for Human Rights in Iraq reports that over 10 million Iraqis live below the poverty line, with the 2024 budget failing to support more than one million needy families.
The ongoing economic crisis and the appreciation of the dollar have driven up commodity prices, exacerbating poverty. Southern provinces are particularly affected, with Muthanna Governorate experiencing a 52% poverty rate, followed by al-Diwaniyah, Maysan, and Dhi Qar at 48%. Baghdad and Nineveh have poverty rates of 13% and 34.5%, respectively, while central provinces average an 18% poverty rate.
On July 21, 2023, Labor and Social Affairs Minister Ahmad al-Assad announced government measures to combat poverty, noting that Iraq has fallen 20 places in international rankings.
The economic challenges and rampant corruption in Iraq continue to hinder the country's development and exacerbate poverty. The COI's efforts to recover stolen funds and prevent further financial mismanagement are critical steps toward rebuilding trust and ensuring a more equitable distribution of wealth. link
QFS CONVERSATION WITH GOLDILOCKS, 28 JULY
GOLDILOCKS
As of February 25, 2024, 24 countries were negotiating their membership in the World Trade Organization (WTO):
Algeria: Applied in 1987
Belarus: Applied in 1993
Sudan: Applied in 1994
Uzbekistan: Applied in 1994
Seychelles: Applied in 1995
Kazakhstan: Applied in 1996
Azerbaijan: Applied in 1997
Andorra: Applied in 1999
Lebanese Republic: Applied in 1999
Bosnia Herzegovina: Applied in 1999
Bhutan: Applied in 1999
Yemen: Applied in 2000
Bahamas: Applied in 2001
Syria: Established a working party on May 4, 2010, and applied in 2001
Ethiopia: Applied in 2003
Libya: Applied in 2004
Iraq: Applied in 2004
Afghanistan: Applied in 2004
Republic of Serbia: Applied in 2004
Iran: Applied in 2005
Sao Tomé and Principe: Applied in 2005
Union of the Comoros: Applied in 2007
Equatorial Guinea: Applied in 2007
Republic of Liberia: Applied in 2007
https://www.wto.org/english/thewto_e/whatis_e/tif_e/org6_e.htm
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By John Lee.
The Companies Registration Department of Iraq's Ministry of Trade said it has successfully processed the establishment of 324 national companies and registered 27 branches of foreign companies in June.
According to a statement from the Ministry's media office, Director General Rashad Khalaf Hashim reported multiple decisions made during the month related to amending corporate contracts, adjusting capital, and merging and liquidating companies.
The department documented 391 registered companies, reviewed 2210 final accounts for national companies and 51 foreign branches, and took action on 49 mergers and capital adjustments for 185 companies.
Additionally, 706 Iraqi companies and 17 foreign companies were referred to the judicial investigator for regulatory violations.
The department also validated 411 founding meeting minutes for limited companies and 44 minutes for public joint-stock companies, archived 750 company files, and ensured compliance with the blacklisted and sanctioned individuals.
(Source: Ministry of Trade)
https://www.iraq-businessnews.com/2024/07/23/iraq-registers-324-local-companies-27-foreign-branches-in-june/
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