FIREFLY:They're going to the streets with Sadr on the 25th. We will hit the streets in millions. We do this weekly until we are paid, starting on the 25th. Sadr has organized this and we will back him for our constitutional rights.
FRANK: Sadr is a good leader. He will not do anything violent. Make sure you don't protest because you will retard the whole monetary process for you.
FIREFLY: We know there's got to be a new rate coming and we going to help speed this up...
----
Frank26
[Iraq boots-on-the-ground report]
FIREFLY:On November the 20th to the 21st we have a curfew for the very first census in the last 27 years
.
FRANK:...It looks like Sudani ordered for this new census to occur for your HCL benefits as Iraqi citizens. It seems to me the only reason he's doing it now is because you have a new exchange rate that they can work with. If not...there wouldn't be a new census...as they determine the fair amount everyone is supposed to get. This new census IMO screens that there is a new exchange rate...
FIREFLY: ALAQ SAD THAT AT THE END OF THIS YEAR THEY WILL IMPLEMENT THE INITIAL PLAN TO COMPLETE THE REFORMS FOR THE BANKING SYSTEM, 18 SEPT
Frank26
[Iraq boots-on-the-ground report]
FIREFLY:Alaq is on TV and he's singing like a bird with information.
He's talking to us an awful lot every day about what they're going to do with this reform. He gives speech about how much money is in the digital system already. It's growing. He said at the end of this year we will implement the initial plan to complete the reforms for the banking system...
FRANK: The digital information is one of the main key parts of the monetary reform. It will allow your money to float freely not only inside of your country but outside...You are going to be internationally recognized. This is extremely exciting.
FRANK26: "AND THE MESSAGE SAYS... NO MORE PROGRAM RATE, NO MORE RESTRICTIONS!!!"...F26
"Our Country's Dream"... Al-Sudani Sends an "Important" Message to Gulf States Regarding the Path to Development
9/17/2024
Baghdad
Prime Minister Mohammed Shia al-Sudani stressed that the drop in oil prices to less than $72 confirms the need to diversify the Iraqi economy, while he addressed a message to the Gulf countries regarding the path to development.
Al-Sudani said during a televised interview followed by "Al-Eqtisad News", "The federal administration's budget allows it to pay $8 for every barrel of oil produced, while contracts signed with the Kurdistan Regional Government give companies $26. This stagnation has affected production from the region and led to a delay in the resumption of the pipeline."
Baghdad has been unable to agree on how much to pay international oil companies operating in the north of the country for their production.
"We have to look at how we balance these issues. Do we look at the budget to see what we can do or do we try to look at prices?" he added.
“Closing the pipeline, which can carry nearly half a million barrels per day of oil from Kurdistan to the Turkish coast, would cost billions of dollars in lost revenue. However, restarting it would pose a dilemma for Iraq, which has failed to comply with OPEC+ production limits amid dire financial needs but has repeatedly said it will compensate for overproduction,” he said.
Al-Sudani said, "We are committed to abiding by OPEC decisions and maintaining the oil price in a way that achieves a balance between the interests of users and producers."
Pipeline problems
Turkey halted the pipeline in March last year after an arbitration court ordered it to pay Iraq $1.5 billion in compensation for transporting oil through it without Baghdad’s consent. Ankara, which claimed the pipeline was shut for repairs after two massive earthquakes in February, said in October it was ready for operations and that it was up to Iraq to resume flows.
But financial and legal issues have emerged, such as compensating companies for costs. International companies have said they also want to settle their overdue receivables — including $1 billion for oil produced between September 2022 and March 2023.
With exports halted, companies have begun producing some crude and selling it domestically. Iraqi officials have previously said this production has caused problems with compliance with quotas set by the Organization of the Petroleum Exporting Countries.
Iraq’s production cap is set at 4 million barrels a day, but it produced 4.32 million barrels a day last month, according to data compiled by Bloomberg. The country, along with some other OPEC+ members, will gradually lift those limits starting in December.
Al-Sudani is keen to “increase production in the long term after years of war and internal conflict that have affected Iraq’s oil industry. In August, BP signed a preliminary agreement to help boost production from the Kirkuk region. Iraq is also rehabilitating and modernizing damaged refineries to help reduce fuel imports.”
The Prime Minister continued, "Because of the wars and the blockade over the past four decades, Iraq has been late in exploiting the wealth we have of gas and oil properly.
Now we are looking at how to exploit the new wealth we have and how to use it effectively."
Diversify the economy
But he said, "The drop in oil prices in London to around $72 a barrel - near their lowest levels since 2021 - underscores the need to diversify the economy."
Iraq is OPEC's largest oil producer after Saudi Arabia and derives the bulk of its revenues from exporting the commodity, and needs much higher prices to balance its budget.
The IMF has long said the country needs to develop its private sector, and that economic progress is being hampered by a huge public sector wage bill, with successive governments not doing enough to curb high wage increases.
Al-Sudani pointed out that "his administration is looking to invest about 40% of Iraq's oil revenues to boost the non-oil sector," adding that "the planned trade corridor extending from Basra Governorate in southern Iraq to Turkey and then to Europe was a 'dream' for his country, and he is looking to the Gulf states to help finance the project, which is supposed to cost $17 billion.
"
Iraq's Exchange Rate Defense amid Oil Price Decline: Central Bank's Role in 2024
Iraq's central bank has been actively defending the exchange rate against the backdrop of a decline in oil prices, demonstrating the critical role central banks play in maintaining currency stability. . Despite the drop in oil prices, Iraq's ability to safeguard its currency is attributed to its substantial foreign currency reserves, which have enabled it to withstand the economic pressures. . This defense strategy is crucial for a country like Iraq, where oil constitutes a significant portion of its revenue and economic activity. ,. .
Iraq's Oil-Dependent Economy and Challenges
Iraq remains heavily reliant on oil, with oil revenues accounting for over 99% of exports, 85% of the government's budget, and 42% of its GDP. .
This overdependence exposes the country to macroeconomic volatility and restricts fiscal space for countercyclical policy. . The decline in oil prices, therefore, poses significant challenges to the Iraqi economy, affecting government revenues, budgetary allocations, and economic stability.
Exchange Rate Stability and Central Bank's Role
In response to these challenges, the Central Bank of Iraq (CBI) has played a pivotal role in maintaining exchange rate stability. . Amidst the oil price decline, the CBI has utilized its foreign currency reserves to intervene in the foreign exchange market, ensuring that the dinar's value does not depreciate excessively. . This intervention is essential for preserving investor confidence and preventing capital flight. .
Impact of Oil Price Decline on CBI's Strategies
The decline in oil prices has necessitated adjustments in the CBI's foreign exchange policies. To manage the reduced oil income, the CBI has implemented measures aimed at creating domestic demand for the Iraqi Dinar (IQD) and accelerating the adoption of banking in the economy.
. These measures are crucial for de-dollarizing the economy and reducing the dependency on cash transactions, which have contributed to the volatility of the currency. .
Long-Term Economic Reforms
Recognizing the limitations of short-term interventions, the Iraqi government and the CBI have embarked on a series of long-term economic reforms to address structural imbalances. . These reforms include labor market reforms, modernization of the financial sector, restructuring of state-owned banks, and reforms in the pension and electricity sectors. . The goal is to enable private sector development, boost non-oil exports, and broaden the tax base, thereby reducing the economy's vulnerability to oil price fluctuations. .
Visualization: Iraq's Oil Production and Exchange Rate Trend
To understand the interplay between oil prices and the exchange rate, a timeline chart illustrating Iraq's oil production and the dinar's exchange rate over the past few years would be insightful. This visualization helps in identifying patterns and the impact of oil price changes on the dinar's value.
Timeline Chart: Iraq's Oil Production and Exchange Rate Trend
31/12/2021
Oil Price Decline
28/2/2022
CBI Defends Exchange Rate
31/5/2023
Introduction of Economic Reforms
31/8/2023
Stabilization of Exchange Rate
31/12/2023
Continued Oil Price Decline
31/5/2024
Further Economic Reforms
31/8/2024
Exchange Rate Remains Stable
Conclusion
Iraq's central bank has been instrumental in safeguarding the exchange rate amidst a decline in oil prices, leveraging its foreign currency reserves. However, long-term economic reforms are essential to reduce the economy's vulnerability to oil price fluctuations and ensure sustainable growth. The ongoing efforts by the CBI and the Iraqi government to diversify the economy and modernize key sectors are critical steps in this direction.
Article Quote: "Alaq...points out the decline in the price of oil has nothing to do with the rise in the exchange rate because Iraq has reserves for foreign currencies which enables it to defend the exchange rate."
That's what central banks do my friends. They defend the exchange rate. That does not matter whether it's at 1310, which they've done, or if it's going to be at whatever the Real Effective Exchange Rate is going to be in the future. They've worked this out.
This isn't something brand new. They know what they're doing. The drop the 3-zeros project is still...going to be applied.
FRANK26: "LOL!!!... GIVE IT UP ALREADY... ALAQ IS NOT GOING ANYWHERE.".........F26
The judiciary and the State Council confirm that the Governor of the Central Bank of Iraq is subject to the legal retirement age (documents)
9/18/2024
The State Council and the Supreme Judiciary settled the controversy over the continuation of the Governor of the Central Bank of Iraq, Ali Al-Alaq, in his position after reaching the legal retirement age.
The two councils confirmed in documents reviewed by Shafak News Agency that the legal age for retirement is 60 years, and upon reaching it, the duties of the official assigned to it end.
According to the documents, the House of Representatives clarified the legal position of Al-Alaq continuing in his position by addressing the State Council, which confirmed that Al-Alaq is included in the State Employees Law, noting that it had previously had an opinion on this matter on August 26, 2019.
In turn, the Supreme Judicial Council confirmed what was approved by the State Council regarding the inclusion of heads of independent bodies in the State Employees Law.
