DINARLAND UPDATE, 4 FEB

DINARLAND UPDATE

Highlights

• 📈 U.S. Treasury Involvement: Trump’s new Treasury Secretary’s engagement is seen as a pivotal moment for Iraq’s economic upliftment.
• 📊 Budget Amendments Passed: The Iraqi Parliament has successfully amended the general budget law, aimed at resolving key financial issues.
• 🛢️ Oil Export Resumption: Iraq is poised to resume oil exports amidst resolved issues concerning Kurdistan’s oil and employee salaries.
• 🌍 International Investment Opportunities: Baghdad International Fair aims to attract international and Arab investors, showcasing Iraq’s commitment to a stable economic environment.
• 💵 Currency Coexistence: The Central Bank of Iraq (CBI) has stated that old and new dinar notes will coexist for a decade, providing flexibility for currency exchange.
• 📉 Potential Oil Price Devaluation: Economic pressures could lead to a devaluation of the dinar if oil prices drop significantly, posing a risk to Iraq’s financial stability.
• 💬 Political Willpower Necessary: Experts agree that political commitment is essential for adjusting the dinar’s value and overcoming historical economic challenges.

Key Insights

• 🌟 U.S. Treasury’s Role in Iraq’s Economy: The involvement of the U.S. Treasury underlines a strategic partnership aimed at bolstering Iraq’s economy. The discussions are not casual; they are focused on enhancing the purchasing power of Iraqi citizens. The expectation is that such high-level dialogue will translate into actionable economic policies that can revitalize Iraq’s financial landscape.

• 💼 Legislative Progress and Economic Stability: The approval of the budget amendment by the Iraqi Parliament signals a crucial step toward addressing long-standing financial issues, particularly concerning the Kurdistan region’s oil exports and employee salaries. This legislative progress is vital for restoring investor confidence and stabilizing the economy, which has been plagued by political uncertainties.

• 🌐 Investment Ecosystem in Iraq: With the Baghdad International Fair attracting 20 countries and nearly 1,000 participants, Iraq is actively seeking international investment. This effort highlights the country’s resolve to create a secure and stable environment for foreign investors, which is essential for economic recovery and growth.

• 📈 Currency Dynamics and Forex Participation: The Central Bank of Iraq’s declaration regarding the coexistence of old and new currency notes for ten years provides a safety net for investors. It indicates that there will be ample time for currency transition, mitigating the risks associated with immediate devaluation and allowing for a more strategic approach to currency exchange.

• 📉 Impact of Oil Prices on Currency Valuation: The warning from economist Nabil Jaffer Al Maromi about the devaluation of the dinar due to potential drops in oil prices is critical. As oil is a primary revenue source for Iraq, significant price declines could hinder financial stability, prompting urgent measures from the government and the CBI.

• ⚖️ Political Will is Key for Economic Reforms: The consensus among experts, including Frank 26 and others, is that political willpower is crucial in facilitating the necessary economic reforms. Historical corruption and delays have suppressed the dinar’s value, and addressing these issues requires a dedicated and unified political effort to restore trust and ensure sustainable economic growth.

• 🔄 Long-term Investment Perspective: Militia Man’s unwavering belief in the investment potential of the dinar reflects a broader sentiment among long-term investors who remain optimistic about the future. This perspective is vital, as it encourages patience and resilience among investors in the face of fluctuating economic conditions and potential setbacks.

FNU LNU: The old and new currency will coexist for 10 years!! @DINARREVALUATION #iraqidinarinvestor

 

ZOOM IRAQ NEWS: Barzani Headquarters has dismissed reports by some media outlets claiming that Kurdistan Democratic Party (KDP) leader Masoud Barzani opposes the reappointment of Iraqi Prime Minister al-Sudani, calling them false, 4 FEB

 ZOOM NEWS

Barzani Headquarters has dismissed reports by some media outlets claiming that Kurdistan Democratic Party (KDP) leader Masoud Barzani opposes the reappointment of Iraqi Prime Minister Mohammed Shia al-Sudani,

calling them false and baseless. It emphasized that such rumors aim to undermine the “openness and positive progress” in Baghdad-Erbil relations - statement : PM office/ file

11:59 AM · Feb 3, 2025

TIDBIT FROM MNT GOAT, 4 FEB

 Mnt Goat 

  President Trump...has now taken on the issues involving Iraq. This is a very good for us investors as we all know the value of the dinar has been greatly suppressed due to corruption and stalling...

Yes, we all know and so does the CBI that this needs adjustment. The adjustment is coming but it will take political willpower to do it.

REINALDO JC :the Article 12 of the General Budget was Passed Finally!! @DINARREVALUATION #iraqidinar

 

ZOOM IRAQ NEWS: The Association of the Petroleum Industry of Kurdistan (APIKUR) welcomes the Iraqi Parliament’s Budget Law amendment, 4 FEB

 ZOOM NEWS

The Association of the Petroleum Industry of Kurdistan (APIKUR) welcomes the Iraqi Parliament’s Budget Law amendment, 

reaffirming its focus on reaching agreements to restore oil exports through the Iraq-Turkey pipeline - statement : APIKUR

12:49 PM · Feb 3, 2025

·

1,504

Views

SANDY INGRAM CC HIGHLIGHTS NOTES, 4 FEB

SANDY INGRAM CC HIGHLIGHTS NOTES

Highlights

Summary

In a recent video, Sandy Ingram discusses the concerning economic situation in Iraq, highlighting the warnings from Dr. Nabil Jafar al-Marumi, an Iraqi economist with extensive experience in macroeconomics.

 Dr. Al-Marumi has expressed grave concerns that the U.S. pressure on oil prices could severely impact Iraq’s economy, potentially leading to a devaluation of the Iraqi dinar. He explains that the push by former President Donald Trump for OPEC to lower oil prices is aimed at making energy more affordable and hastening the resolution of the Russia-Ukraine conflict.

 While Iraq anticipates an increase in oil production, the projected drop in oil prices could result in a substantial loss of revenue for the country. If oil prices were to decline to $60 per barrel, Iraq could face a financial shortfall of approximately $15 billion, forcing the government to depend on domestic borrowing.

 A further decline to $50 per barrel could necessitate a devaluation of the currency, which, while potentially increasing public revenues, could have detrimental effects on the economy and the citizens’ quality of life. Ingram encourages viewers to remain optimistic despite the challenges ahead.

• 📉 U.S. Pressure on Oil Prices: The U.S. has exerted pressure for lower oil prices to make energy more affordable.
• 💔 Impact on Iraq’s Economy: A significant drop in oil prices could lead to severe financial challenges for Iraq.
• 📊 Potential Revenue Loss: A potential decrease to $60 per barrel could result in a $15 billion loss in oil revenues for Iraq.
• 💰 Domestic Borrowing: The Iraqi government may need to rely on domestic borrowing to cover expenses due to falling oil revenues.
• ⚖️ Currency Devaluation: If oil prices drop to $50 per barrel, Iraq might have to devalue the dinar to stabilize its economy.
• 🌍 Global Oil Production Cuts: OPEC+ is expected to end production cuts, influencing global oil prices and economies.
• 🙏 Call for Positivity: Ingram encourages viewers to stay hopeful and resilient in the face of adversity.

Key Insights

• 📉 U.S. Influence on Oil Markets: The pressure from the U.S. government to lower oil prices demonstrates the significant influence that geopolitical considerations can have on commodity markets. This push not only impacts oil-exporting countries like Iraq but also reflects broader strategies aimed at stabilizing global markets amidst conflicts, such as the ongoing Russia-Ukraine war. The interconnectivity of international relations and economic policies is evident, highlighting the vulnerability of nations dependent on oil revenues.

• 💔 Vulnerability of the Iraqi Economy: Iraq’s economy is heavily reliant on oil exports, making it particularly susceptible to fluctuations in oil prices. The warning from Dr. Al-Marumi underscores the fragility of Iraq’s economic stability, which could lead to severe consequences for public services and welfare if oil revenues diminish significantly. This dependency poses long-term risks, necessitating diversification strategies to mitigate future economic shocks.

• 📊 Projected Revenue Loss and Economic Strain: The potential loss of $15 billion in oil revenues if prices drop to $60 per barrel illustrates the critical nature of oil prices in Iraq’s fiscal health. This scenario could lead to budget cuts, reduced public spending, and increased unemployment, exacerbating existing economic challenges for the population. The financial strain may force the government to prioritize immediate fiscal needs over long-term development projects.

• 💰 Domestic Borrowing as a Solution: Relying on domestic borrowing to cover deficits is a short-term solution that could lead to long-term financial instability. Increased borrowing can lead to a rise in national debt, higher interest rates, and inflation, which may further complicate Iraq’s economic recovery. It highlights the need for sustainable fiscal policies and alternative revenue sources to ensure economic resilience.

• ⚖️ Currency Devaluation Risks: The potential devaluation of the Iraqi dinar poses significant risks for the economy and its citizens. While devaluation can increase revenues in local currency, it also raises the cost of imports, leading to inflation and a decrease in purchasing power for everyday citizens. The balance between stabilizing public finances and maintaining the citizens’ quality of life becomes increasingly precarious in such scenarios.

• 🌍 End of OPEC+ Production Cuts: The anticipated end of production cuts by OPEC+ is a crucial development that could reshape the global oil landscape. This decision reflects the complex dynamics of global energy markets, where geopolitical pressures and economic strategies intersect. For Iraq, this could mean both increased production opportunities and the risk of a significant drop in oil prices, creating a dual-edged sword for the economy.

• 🙏 Need for Hope and Resilience: Ingram’s call for positivity amidst troubling news serves as a reminder of the importance of resilience in facing economic challenges. Encouraging a hopeful outlook can foster community solidarity and support systems that are vital during economic downturns. It underscores the psychological aspect of economic crises, where maintaining morale can play a significant role in collective recovery efforts.

Overall, the video presents a sobering analysis of the potential economic repercussions of U.S. foreign policy on Iraq’s economy, emphasizing the importance of vigilance, adaptability, and resilience in uncertain times. The insights provided by Dr. Al-Marumi and Sandy Ingram serve as a warning while also calling for a proactive approach to overcoming these challenges.