Monday, September 9, 2024
Coffee with MarkZ. 09/10/2024
DINAR REVALUATION REPORT: Iraq's Monetary Reform: Nearing Completion in 2024, 10 SEPT
Iraq's Monetary Reform: Nearing Completion in 2024
Overview of Iraq's Monetary Reform
Iraq is in the final stages of a significant monetary reform that began in 2024. This reform is part of the broader economic measures designed to address the country's fiscal challenges and reduce its heavy dependence on oil revenues. The International Monetary Fund (IMF) has been closely involved in the process, providing guidance and financial support.
Economic Growth and Fiscal Expansion
The Iraqi government has projected continued economic growth, supported by fiscal expansion. This expansion is critical, as it aims to cushion the economy against medium-term vulnerabilities, particularly the increased risk of oil price volatility. To ensure fiscal sustainability, the government is focusing on controlling the public wage bill and increasing non-oil tax revenues.
Challenges and Opportunities
Iraq faces significant challenges in diversifying its economy and modernizing its financial and banking sectors. The country's history of conflict and political instability has hindered economic development and private sector growth. Corruption remains a pervasive issue, and the lack of basic services is widespread. However, the government's commitment to the monetary reform presents an opportunity for Iraq to stabilize its economy and lay the groundwork for more sustainable growth.
Budget Approval and Economic Policy
In a notable development, Iraq's parliament approved a three-year federal budget for 2023 to 2025, the largest in the country's history. This budgetary decision is ambitious but also precarious, given Iraq's heavy reliance on oil revenues. The government's ability to fund local investment projects and hire public sector employees is a positive sign, but the volatility of oil markets and Iraq's limited influence in global oil dynamics pose challenges to its economic stability.
Humanitarian and Development Context
Iraq continues to grapple with the aftermath of conflict, including internal displacement and inadequate public services. Despite this, the country has made some strides in human rights and social development, with efforts to combat corruption and improve government services. The government's focus on the five key issues of corruption, unemployment, poverty, economic reform, and service improvement is crucial for addressing the grievances of Iraqi citizens.
Outlook
As Iraq nears the completion of its monetary reform, the country stands at a critical juncture. The reform's success will depend on the government's ability to implement fiscal adjustments, enhance private sector development, and navigate the challenges of economic diversification and political stability.
DINAR REVALUATION HIGHLIGHTS: " IRAQ IS IN THE FINAL STAGES OF THE MONETARY REFORM" , 9 SEPT
Summary
Dinar Guru updates reveal Iraq is in the final stages of monetary reform, with expectations for lower notes and increased non-oil revenues.
Highlights
- 🚀 Frank 26 reports we’re in the final education phase of monetary reform.
- 💵 Lower notes will be introduced after commercial releases, potentially next year.
- 🇺🇸 CBI’s meeting with the U.S. Treasury is anticipated to be crucial for the exchange rate.
- 🏙️ The new Central Bank skyscraper in Baghdad symbolizes stability and progress.
- 🔄 Non-oil revenue streams, especially liquid natural gas, are set to enhance Iraq’s economy.
- 📜 Investment law expected to pass within two weeks, boosting economic prospects.
- ✅ PM Sedani confirms plans to revalue the dinar and remove zeros during his administration.
Key Insights
- 🔍 The completion of the monetary reform education phase suggests that Iraq is preparing for significant currency changes, indicating a pivotal moment in its economic strategy.
- 📈 The focus on commercials before lower notes suggests a strategic communication plan to prepare the public for upcoming changes, enhancing public trust and participation.
- 🤝 The anticipated meeting between the CBI and the U.S. Treasury could lead to essential agreements that impact the dinar’s exchange rate, emphasizing international cooperation.
- 🏗️ The Central Bank skyscraper not only represents physical growth but also reflects Iraq’s commitment to stability and modernization in its financial institutions.
- 🌍 Iraq’s shift towards liquid natural gas production demonstrates a diversification of revenue sources, crucial for economic resilience and reduced dependency on oil.
- 🌟 The upcoming investment law could attract foreign investments, fostering economic growth and stability, which are vital for the dinar’s value.
- 📅 PM Sedani’s confirmation of currency revaluation ambitions signals a transformative period for the Iraqi dinar, aiming for greater economic strength and public confidence.
DINAR REVALIUATION REPORT: Emphasis on Reducing Inflation and Strengthening the Iraqi Dinar in September 2024, 9 SEPT
Emphasis on Reducing Inflation and Strengthening the Iraqi Dinar in September 2024
In September 2024, Iraq faces significant challenges in managing its economy, particularly in the areas of inflation reduction and strengthening its national currency, the Iraqi dinar. The country's heavy dependence on oil exports has left it vulnerable to global price fluctuations, exacerbating inflationary pressures and impacting the value of the dinar.
Struggling with Macro-Economic Volatility
Iraq's reliance on oil revenues, which account for over 99% of its exports, 85% of the government budget, and 42% of its gross domestic product (GDP), has exposed the country to macro-economic volatility. This dependence has been a double-edged sword, fueling economic growth during periods of high oil prices but leading to severe budgetary constraints and economic instability when oil prices drop.
Government's Fiscal Challenges
The government's budget rigidities have restricted fiscal space and the ability to implement countercyclical policies during economic downturns. Inflation has been a persistent issue, impacting the living standards of Iraqis and complicating fiscal management. The IMF has noted that domestic inflation declined to 4% by the end of 2023, partly due to the currency revaluation in February 2023 and the normalization in trade finance, but imbalances have worsened due to the large fiscal expansion and lower oil prices.
Efforts to Strengthen the Dinar
The Iraqi dinar's value has become a contentious issue, especially after the Central Bank of Iraq devalued the currency in December 2020 in response to the sharp decline in global crude prices. The devaluation led to immediate increases in the prices of imported goods, affecting the purchasing power of ordinary Iraqis and sparking political debates.
The IMF's Perspective
The International Monetary Fund (IMF) has projected that Iraq's economy will grow by 1.4% in 2024 and accelerate to 5.3% in 2025. However, the IMF has also emphasized the need for ambitious fiscal adjustments to stabilize debt in the medium term and rebuild fiscal buffers.
Future Outlook
Iraq's ongoing fiscal expansion is expected to boost growth in 2024, but at the expense of further deteriorating fiscal and external accounts, making the country more vulnerable to oil price fluctuations. The IMF has warned that without policy adjustments, the risk of medium-term sovereign debt stress is high, and external stability risks could emerge.
MILITIAMAN CC HIGHLIGHTS NOTES: " EMPHASIS ON REDUCING INFLATION & STRENGTHENING THE IRAQI DINAR" , 9 SEPT
Summary
The Central Bank of Iraq is implementing banking reforms and enhancing currency stability, aiming for economic growth and cooperation with the Kurdistan region.
Highlights
- 🏦 Central Bank announces comprehensive banking reforms.
- 💵 Electronic platforms for foreign transfers are in progress.
- 🌍 Focus on unifying financial practices between Baghdad and Kurdistan.
- 📈 Emphasis on reducing inflation and strengthening the Iraqi dinar.
- 🤝 Cooperation with the US Treasury and international banks is ongoing.
- 🏗️ Major investments planned in oil and gas sectors.
- 🕊️ Political stability is crucial for economic goals.
Key Insights
- 💳 The Central Bank’s reforms indicate a shift towards a more modern banking system, reducing reliance on dollar auctions and enhancing local currency use.
- 📊 The move to electronic transfers aligns with global banking standards, potentially attracting foreign investments and improving trade efficiency.
- 🔄 Unifying financial practices between Baghdad and Kurdistan may lead to greater economic stability and development for both regions, benefiting all Iraqis.
- 📉 The focus on inflation control and currency stability is vital for public confidence and economic growth, suggesting positive future prospects for the Iraqi dinar.
- 🌐 Collaborations with international financial institutions highlight Iraq’s commitment to meeting global standards, which could enhance its economic reputation.
- 🛢️ Investments in the oil and gas sectors by major companies like Baker Hughes signify confidence in Iraq’s economic potential and its strategic importance in energy markets.
- 🏛️ Political and administrative stability remains essential; ongoing efforts to address political challenges indicate a commitment to achieving a unified and prosperous Iraq.
Among them is the budget. Parliament’s agenda for next Tuesday, 24 NOV
Among them is the budget. Parliament’s agenda for next Tuesday The House of Representatives will hold a regular session the day after tomorr...
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Frank26 [Bank story] This time we didn't go down, we just called [the bank]... We said we want to see if we can exchange some cu...
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Bank appointment for Currency EXCHANGE Instructions/Checklist Bank Name_________________________________________ Bank 800#____________...
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Walkingstick All these meetings that the CBI had with all these agencies that were helping them with their monetary reform are done. Al...