Economical Number of readings: 334 Baghdad / NINA / Mazhar Muhammad Saleh, advisor to Prime Minister Muhammad Shia al-Sudani for economic affairs,
denied the existence of a problem with cash flow in the Iraqi currency. Mazhar Muhammad Saleh said, according to Rudaw Media Network: “There is no problem with liquidity at all because it is covered by foreign currency,” indicating that “the mechanism for obtaining cash liquidity is that oil sales are converted into US dollars, and
when the government needs dinars for internal exchange, oil sales are exchanged for dollars.” "It goes to the issuing bank, which is the central bank, to give it the currency."
He pointed out that "the central bank, with the aim of maintaining market stability, sells foreign currency to the market through the currency sale window and auction, to withdraw liquidity a second time and repeat it again so that there is a natural growth in the exported currency."
Mazhar Muhammad Salih noted that, “In this case, when the government wants liquidity in the Iraqi dinar, the cash issuance increases, that is,
instead of absorbing it from the market, a new issuance occurs, and
this is what led to a jump in the exported currency, but
there is no problem with that because it is 100% covered.” /End H
A trusted military intelligence contact confirmed that GCRLiquidity release began at exactly 3:00 PM PDT on Wed. 7 Aug. 2024 and would unfold over the next 72 hours. “The Sovereign Committee and US federal government have just approved T4A and B payments – this has started Reno, Miami, and other East Coast states.”
Those holding ZIM bonds will receive a $500 million advance until structured payments begin.
All non-ZIM FX proceeds will be immediately accessible.
For those who choose to place their funds under a structured payment program (SPP), there will be an advance of up to $250 million until the first SPP payment is made.
Distributions are scheduled to begin after Sat. 10 Aug.
Mid-September was anticipated to be a period of substantial activity of significant financial movement.
Shafaq News/ The Iraqi Ministry of Foreign Affairs on Friday welcomed the joint statement issued by the leaders of the United States, Egypt, and Qatar, which calls for a ceasefire, the release of hostages, and the provision of immediate relief to Gaza.
In a statement, the ministry viewed the joint statement as "a serious commitment by the three leaders to resolving the ongoing humanitarian crisis in Gaza," considering it a significant step toward achieving stability in the region.
The ministry expressed its support for this international effort, urging all involved parties to respond positively to the initiative.
"The Iraqi Foreign Ministry calls for the urgent resumption of talks, expressing Iraq's readiness to support any effort aimed at enhancing security and peace in the region."
The ministry hoped that these efforts would yield tangible results, contributing to alleviating the "suffering of the Palestinian people and bringing an end to the current crisis as quickly as possible."
In a joint statement, U.S. President Joe Biden, Egyptian President Abdel Fattah el-Sisi, and the Amir of Qatar, Sheikh Tamim bin Hamad Al Thani, called for immediate action to "bring relief to the people of Gaza and secure the release of hostages.
The joint statement called both sides to resume urgent discussions on Thursday, August 15, in either Doha or Cairo, aiming to close all remaining gaps and commence the implementation of the deal without further delay.
I am hearing a lot of chatter for the weekend from group leaders...I have heard this chatter before so I am cautious...it is coming in conjunction with some great positive things coming from Iraq...I'm still holding hope perhaps over the weekend for an HCL...
...quiet on the RV front...All we have is rumors of the HCL is in the Kurdish regions where they made a couple changes and sent it back to the parliament…so it is now with them. We heard parliament has agreed on it and now we are waiting for them to say Boom – it’s done.
So in Iraq they seem excited that Alaq is going to gone and the pending public approval of the HCL. I am still hearing there is an opportunity for HCL to pass before the weekend is out.
My contacts on the ground in Iraq say...they expect to see sudden movement and HCL...I am hearing is they expect to announce completion and ratification of the HCL this week...I hope they are correct.
FRANK26: "YES... A MANAGED FLOAT OF THE IRAQI DINAR CURRENCY WILL SOLVE MANY CRISES".....F26
Is “floating the currency” a solution to the crisis of the high dollar in Iraq? A representative explains
8/8/2024
There are calls to float the exchange rate in Iraq. Is this related to the issue of controlling the exchange rate and preventing its rise?
In this regard, the member of the Parliamentary Finance Committee, Khalil Al-Doski, denied the truth of the fact that “floating the currency will reduce the dollar,” stressing that floating the currency has nothing to do with reducing the dollar, but rather has to do with the issue of supply and demand for the currency, as it could lead to instability in the value of the Iraqi currency.
Al-Doski told Iraq Observer
, “The benefit of floating is to highlight the true value of the Iraqi dinar only, meaning that the dollar will range in price between 200 and 300 Iraqi dinars, and in any case, with the circumstances that Iraq is currently going through, it is possible that the value of the Iraqi currency will decrease.”
He added, "If Iraq adopts the floating method in its economic dealings, it will not sell the dollar at the official price, and the Central Bank will sell hard currency to the party that pays more. Therefore, floating will ultimately lead to instability in the value of the currency."
He pointed out that “floating is not at all suitable for the economic conditions in Iraq. Despite the relative rise in the exchange rate, inflation can be controlled,” noting that “the solution to controlling the exchange rate lies in obligating all banks, companies and institutions that deal in dollars to adhere to the standards so that the state and the Central Bank can include the largest possible number of banks in the currency selling window, and thus the road will be closed to the doors of speculation and smuggling of the currency outside the country.”
Floating the currency is a procedure based on liberalizing the exchange rate, leaving it to market factors (supply and demand), to determine its value without any form of intervention by the economic authority. This means that there is a private sector in the economy, which has productive activities that are marketed abroad (exports) through which dollars are obtained that enter the domestic economic activity. In return, there are also private sector activities that depend on the outside (imports), from consumer goods and services or production requirements and semi-manufactured goods and others, so these economic units take the dollar out of the economic activity.
This mechanism makes the exchange rate appear as if it is floating like a ship on turbulent waves that take it right and left, away from the equilibrium point, until stability returns to the original equilibrium point.
There are two types of floating: the first is absolute floating, and the second type is managed floating, i.e. the type in which the central bank intervenes to direct the exchange rate up or down, as it sees fit to achieve the interests of the national economy.
