Article: "Iraqi Foreign Ministry: Ocalan's call is an important step to achieve stability in the region"
Quote: "The Iraqi Ministry of Foreign Affairs welcomed, on Friday, the announcement of the leader of the Kurdistan Workers' Party (PKK), Abdullah Ocalan, and his call for the party to lay down its arms, considering this step positive and important in achieving stability in the region
."
Article: "Iraqi government bank warns against trading in digital currencies and forex activity"
Quote: "The Central Bank of Iraq issued a ban on cryptocurrencies in 2017, citing risks such as financial crime, volatility, and consumer protection concerns."
The Prime Minister's Advisor for Economic Affairs, Abdul Hussein Al-Anbaki, announced today, Tuesday, the launch of 70 new Islamic banking products.
Al-Anbaky told the Iraqi News Agency (INA) that "the Sharia Standards Committee for Islamic Banks continues to review more standards to ensure their compliance with national regulations, within the framework of cooperation with the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI)," noting that "the Sharia standards set by the organization are adopted in 37 regulatory bodies across
26 countries as a basis for formulating local regulations and are not mandatory." He added that "the new banking products represent a qualitative shift in the banking sector, and will contribute to attracting savings, stimulating development financing, and reducing the phenomenon of hoarding, which negatively affects the Iraqi economy, with 73% of the money supply remaining outside banks.
" He explained that "these products provide banking solutions that are compatible with Sharia controls, which enhances customer confidence in Islamic banks, and pushes towards expanding financial inclusion and raising the credit rating of Iraqi Islamic banks. It will also allow a large segment of society to return to banking transactions, after having been deprived of them due to the absence of products compatible with Islamic Sharia."
Al-Anbaki called on "the Central Bank to support these products and integrate them into monetary policies, to ensure their positive impact in enhancing financial stability, stimulating the supply of money and demand for it, and increasing the doubling of credit," stressing that "this step will enable Iraq to benefit from global experiences in Islamic banking systems, which will contribute to achieving comprehensive economic development."
Chapter Summary: Fluctuations in the Iraqi Dinar Exchange Rate (2005-2024)
Introduction
In recent years, the Iraqi dinar has experienced significant volatility against the US dollar, particularly in the parallel market. A comprehensive report released by the Future Iraq Institute for Economic Studies and Consultations analyzes this fluctuation over a span of nearly two decades, from 2005 to 2024.
The report emphasizes the interplay of internal and external factors that have shaped the dinar’s exchange rate, pointing out that understanding these dynamics is crucial for economic stability in Iraq. Key concepts such as supply and demand, national budget releases, and geopolitical conditions are fundamental to grasping the fluctuations of the dinar. This summary will dissect the report’s findings, presenting the critical elements influencing the exchange rate and their implications for the broader economic landscape.
Key Factors Influencing Exchange Rate Volatility
Supply and Demand Dynamics
Supply and demand are identified as primary drivers of the dinar’s value fluctuations.
The exchange rate is significantly affected by varying levels of demand for foreign currency, particularly the US dollar.
The report notes that changes in the exchange rate have been inconsistent, varying from month to month due to a combination of both internal economic conditions and external market influences.
Timing of National Budget Releases
The timing of the national budget release plays a pivotal role in influencing the exchange rate.
Periods surrounding the budget release often correlate with shifts in the dinar’s value, as government spending and fiscal policies impact the overall economy.
Seasonal Patterns
The report highlights distinct seasonal patterns in exchange rate movements:
December: The dinar appreciates in value in 13 out of 21 years analyzed.
August and June: Each month shows significant gains in 11 years.
April: The dinar appreciates in 10 instances.
October and November: Notable improvements in 9 years.
March: Increased value noted 8 times.
May: The month with the least depreciation, showcasing a rise in only 4 years.
The consistent pattern reveals that early months of the year, particularly February, March, and April, tend to witness appreciation of the dinar, while May often sees a decline due to heightened demand.
Political and Financial Factors
Central Bank Dollar Sales
The Iraqi Central Bank’s dollar sales are crucial in managing the money supply within the market.
These sales directly influence the availability of the US dollar, thereby affecting the dinar’s exchange rate.
Geopolitical Conditions
The report underscores that geopolitical conditions significantly impact currency demand and supply.
Unexpected disruptions in demand for foreign currency can lead to heightened volatility in the exchange rate.
Legislative and Economic Conditions
Political developments and legislative changes also play a role in shaping the economic environment, which subsequently influences the exchange rate.
The report emphasizes the importance of monitoring these factors to understand their impact on the parallel market.
Case Studies and Real-World Examples
Historical Data Analysis
The report includes a thorough analysis of exchange rate data from 2015 to 2024, identifying recurring trends and patterns.
This longitudinal study allows for a clearer
understanding of how specific months historically influence the dinar’s value.
Implications of Seasonal Trends
The consistent seasonal trends suggest that economic stakeholders, including policymakers and investors, should anticipate fluctuations based on historical data.
For instance, the appreciation of the dinar in December could signal a favorable period for investments or economic activities.
Conclusion
The analysis presented by the Future Iraq Institute reveals that while seasonal patterns play a significant role in the fluctuations of the Iraqi dinar, there are multifaceted factors such as monetary policy, political developments, and economic conditions that also contribute to its volatility.
Understanding these dynamics is essential for stakeholders looking to navigate the complexities of the Iraqi economy. The report’s findings underscore the necessity of continuous monitoring of internal and external variables to achieve a more nuanced comprehension of exchange rate movements.
The implications of these fluctuations extend beyond mere currency values, affecting trade, investment, and economic stability in Iraq. Thus, a comprehensive approach to analyzing the dinar’s exchange rate is crucial for fostering a more resilient and predictable economic environment.
Shafaq News / The American energy-based oil press website published on Friday a report on the resumption of oil pumping from the Kurdistan Region, stressing that Washington pressured Baghdad for this, to reduce Iranian oil exports.
According to the report translated by Shafaq News, “despite the Iraqi federal government’s assurances that the resumption of oil exports from Kurdistan is imminent, foreign oil companies operating in the region said they will not resume oil exports today.”
The report noted that “oil exports from Kurdistan have now been suspended for nearly two years, after being stopped since March 2023 due to the dispute over who should allow Kurdish exports.”
He explained that “the companies that are members of APIKUR for the export of oil from the region are ready to resume exports immediately once formal agreements are reached to provide guarantee of payment for previous and future exports in accordance with the current legal and contractual terms.”
The report said that “foreign oil producers in Kurdistan want agreements and firm guarantees before resuming exports, while Baghdad is under pressure from the United
States to allow the supply of Kurdish supplies to the market, as the Trump administration is looking to impose a significant reduction in Iranian oil exports as part of the “maximum pressure” campaign.
Eight international oil companies operating in the Kurdistan Region announced on Friday that they would not resume oil exports through the Turkish port of Ceyhan despite Baghdad’s announcement of the imminent export resumption.
The Kurdistan Petroleum Industry Association (Abecor), which represents 60% of the region’s production, said that “no official contacts have been made to clarify trade agreements and guarantees of payment for past and future exports.”
Earlier on Friday, Deputy Prime Minister for Energy Affairs and Minister of Oil, Eng. Hayyan Abdul Ghani, announced the start resumption of Kurdistan Region oil exports through the Turkish port
of Ceyhan in the coming hours, in a statement he made on the sidelines of his visit to the port of Khor Al-Zubair to see the operations of connecting the gas pipe, and quoted by the Ministry of Oil in a statement.
They decided to meet on Tuesday to sign the agreement for payment
Resuming oil export is ready to go once the agreement is signed on Tuesday
Which requires releasing the budget
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APIKUR spokesperson Myles Caggins told Zoom News the group’s eight member companies are ready to resume oil exports in the Kurdistan Region once they receive guarantees for payment and a plan to settle outstanding debts.
