BETWEEN FINANCE PURCHASES AND CENTRAL BANK SALES… DISCLOSING A $10 BILLION DIFFERENCE
Where did it go?
A specialist revealed a difference of nearly 10 billion dollars between the Central Bank of Iraq’s sales and the Ministry of Finance’s purchases over the past 11 months.
Financial expert Ali Daadoush pointed out that there is a difference of (10) billion dollars in purchases from the Ministry of Finance compared to sales from the Central Bank of Iraq.
Daadoush said, in an interview with Al-Jabal, that “the Central Bank of Iraq sells the dollar through its window for about 72.385 billion dollars until November 2024, compared to purchases from the Ministry of Finance for about 62.435 billion dollars for the same period, and this means there is a difference of (10) billion dollars,” stressing the need to disclose the money “Where did it go and what is its fate?”
Daadoush explained that “the result is a decrease in the official reserves of the Central Bank, which amounted to nearly 106 billion dollars, according to data from the Central Bank of Iraq.”
He added: “But the important question is what about the year 2025 and the continued reliance on oil revenues under the new US administration and the possibility of intervening in the international oil market in various ways and means. This means that the Iraqi economic and financial situation will be in danger and unknown.”
Earlier, MP Sarwa Abdul Wahid called for the formation of a parliamentary committee to present its results to the House of Representatives regarding the difference in the budget tables, which amounts to 10 billion dollar or 8 trillion dinars.
Iraq’s imports surged by 158% in Q1 2024 compared to Q1 2023, indicating mixed implications for the IQD and USD exchange rates.
Highlights
📈 Iraq’s imports increased by 158% in early 2024.
📊 Comparison made to same period in 2023.
⚖️ Mixed implications for the IQD and USD.
💰 Central Bank of Iraq (CBI) reported the surge.
🌍 Economic factors influencing currency rates.
🚦 Good and bad news for the Iraqi economy.
🔍 Importance of monitoring import-export dynamics.
Key Insights
📈
Surging Imports: A 158% increase in imports reflects growing demand for foreign goods, which could affect local production and currency stability.
📉 Impact on IQD: Increased imports may lead to a depreciation of the IQD if not matched by export growth, as more currency is required to purchase foreign goods.
💵 USD Demand: Higher imports typically increase demand for USD, as many transactions are conducted in this currency, potentially strengthening it against the IQD.
⚖️ Balance of Trade: A significant rise in imports without a corresponding increase in exports can worsen Iraq’s trade balance, impacting economic stability.
📊 Economic Growth Indicators: While the surge in imports may indicate economic growth, it also raises concerns about dependency on foreign goods, which could hinder local industries.
🔍 Monitoring Trends: Investors and analysts must closely monitor import-export trends to anticipate shifts in currency valuation and economic health.
🌐 Global Market Influence: Iraq’s import policies and global market conditions play a crucial role in determining exchange rates, making it essential to stay informed on international trade dynamics.
AL-SUDANI: IRAQ IS A KEY MEMBER OF THE INTERNATIONAL COALITION
Prime Minister and Commander-in-Chief of the Armed Forces, Mr. Mohammed Shia Al-Sudani, received today, Tuesday, Commander of the US Central Command, General Michael Kurilla, and his accompanying delegation.
The meeting witnessed discussions on cooperation and coordination between Iraq and the international coalition in combating terrorism and confronting extremism. The Prime Minister stressed that Iraq is a key member of this coalition and is committed to cooperating with the international coalition to confront and monitor terrorist groups in a way that preserves security and stability in the region. In return, Mr. Kurilla stressed the commitment of the international coalition to support Iraq in preserving its security and sovereignty against any terrorist threat.
The meeting also included discussions on the latest developments in Syria and the ongoing repercussions in the region, where Mr. Al-Sudani stressed the importance of respecting the free choices of the Syrian people and Iraq’s readiness to help the Syrians in these circumstances and the transitional phase.
His Excellency pointed out the necessity of preserving Syria’s security, the unity of its territories, the safety of its people, and the ethnic, religious, and social diversity it enjoys, stressing the importance of preventing any attack on any of the components of the Syrian people or its religious sanctities, and that Iraq will follow the course of events and the credibility of actions, not words.
Mr. Al-Sudani reiterated Iraq’s commitment to working with Arab and neighboring countries to help the Syrians and consolidate security and stability in the region.
“THE TURNING POINT: IRAQ’S LEAP INTO THE DIGITAL ECONOMY”
This is...a shift towards better financial inclusion... Iraq’s transition to digital payments will unlock a range of economic benefits and I am told by my CBI contact that this is the precursor to the Project to Delete the Zeros...
and the plan to end the currency auctions of using dollars to electronic transactions by the end of the 2024...in about 3 weeks... We...look forward to the initiation of the Project to Delete the Zeros, if in fact the CBI does intend to reinstate the dinar back on FOREX...
Let’s all keep an eye for what happens when Iraq finally makes this huge transition away from using purely cash to all digital.
Parliament and government.. a race with the 2025 budget
The 2025 budget schedules in Iraq are witnessing a delay that is causing widespread controversy between the government and parliament, as the government has not yet sent the full details of the budget to the House of Representatives, which has raised concerns among members of the parliamentary finance committee about the deadline for approval.
The statements indicate that the reasons for the delay are related to reviews of financial schedules, especially those related to oil extraction expenses in the Kurdistan Region and the costs of projects funded in 2025.
The Financial Management Law requires the government to submit the general budget to the Council of Representatives 45 days before the beginning of the fiscal year, in order to allow the necessary time to discuss and approve it. Despite the clarity and explicitness of the legal text, no Iraqi government, including the current government, has committed to implementing this entitlement.
Speaking about this file, member of the Parliamentary Finance Committee, Mustafa Al-Karaawi, revealed the existence of legal and constitutional violations by the government in sending the budget law to the House of Representatives.
Al-Karawi said in a statement to Al-Maalouma Agency, “Article 77, paragraph two of the Federal Triennial Budget Law indicated that the government must send the budget tables before the end of the fiscal year,” indicating that “the government sent only one amendment to the text of the budget, which is the text of Article 12 related to the costs of extracting oil in the region.”
He added, "Not sending the schedules on time is considered a legal and constitutional violation, and if the government proceeds with amendments to the articles, there are many articles that need to be amended and to be fair to many groups," adding, " We recorded all of these observations in the session last Tuesday during the first reading of the amendment to the budget law.”
He explained that "his committee is working on re-amending the budget and sending it to the government to work on general amendments to the law so that it is fair to all segments of society and addresses the problems in the previous budget."
In addition, a member of the Parliamentary Finance Committee, Hussein Mounes, revealed that the budget amendments are subject to political amendments, not technical ones.
In a statement to Al-Maalouma Agency, Mounes said, “The government has a point of view in resolving the issues with the region and limiting oil smuggling operations by increasing production costs by $16 per barrel.”
He added, "During the discussion of the proposal, we raised several questions: Why was $16 set? Is it a technical or political consensus number?"
He pointed out that "the Parliamentary Finance Committee hosted the concerned parties and they confirmed to us that the issue is political and not technical."
He explained that "the government's proposal is to form an advisory body, and in the event of non-compliance, a committee of consultants will be formed to determine production costs."
He pointed out that "the Finance Committee determined that the amount would be an advance granted to the region and that a settlement would be arranged later.
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He added, "There are approximately 256 thousand barrels smuggled daily from the region with OPEC's permission. This file must be closed because it negatively affects government production," stressing that "the Finance Committee has reservations regarding the advances and loans granted to the region. "
It is noteworthy that the House of Representatives previously hosted Prime Minister Mohammed Shia Al-Sudani and his deputies, the Minister of Planning, the Minister of Foreign Affairs, and the Minister of Interior, where the amendments to the budget for next year 2025 were discussed . link