Weekend Coffee with MarkZ. 05/31/2025

 Weekend Coffee with MarkZ. 05/31/2025

Some highlights by PDK-Not verbatim

MarkZ Disclaimer: Please consider everything on this call as my opinion. People who take notes do not catch everything and its best to watch the video so that you get everything in context.  Be sure to consult a professional for any financial decisions

MZ: Good Morning- The first 45 minutes is with CBD Gurus…then the news. 

Member: Good morning everyone… happy Saturday to you

Member: Its odd that there is so much quiet and so little RV news lately. I sure hope its still moving forward and not stopped. 

Member: Hope Mark has some really good news today. We certainly need it.

MZ: We will talk about the conflicts and back and forth in the Kurdish region when should force the resolution on gas and oil laws and revenue sharing (HCL Law) . 

MZ: I have been told for many years now that this is the final roadblock before Iraq is ready to pull the trigger. 

MZ: “An expanded meeting of Kurdish parties begins in Erbil to discuss stopping funding the salaries of the regions employees”  There are “all hands on deck” meetings in Erbil right now 

MZ: And Saleh chimes in on the progress in the banking world “Iraq is third in the Arab world in the number of bank cards” They are embracing the digital world. 

Member: Supposedly when Barzani met with Rubio- Rubio told Barzani to get oil flowing. Supposedly budget went to com (council of ministers)  on Wednesday and Sudani was supposed to get it through

Member: Militia man highlighted an article last night out of the UN stating that in the coming days, Iraq would be a global banking powerhouse.

Member: re forex holding spot with imf anticipated starting rate 4.81 then float! Really hope that is real

Member: I read a rumor that Trump and Company gave them -Iraq a back wall date of June 15th to get it done , or be left behind !! He reminded them how far they have come and now it was time to go -hope that is real. !

Member: Was hearing a go for this weekend but got halted. Let’s hope we stop getting delays. I know there is a lot of T’s to get crossed and I’s to get dotted

Member: We are into June now.. any idea when we might get notified?

Member: anything new form the Vietnam dong. 

MZ: Nothing new….still hearing it is going at the same time as the dinar. 

Member: Any Bond or bank news ??

MZ: On the bond side and banking side still quiet- but I did have a bond contact send me a message yesterday saying that the dinar now had an official spot on forex. I don’t know what that means , but he seemed excited. Hopefully that means they are preparing for an international rate and international trade. I am waiting for more clarification

MZ: My redemption center/wealth management folks are not working this weekend. 

​​Member: if some banks are accepting for forex amount..does that mean it is definitely extremely close ??????

Member: BANK STORY: Mom went to a Chase bank in Florida this AM. She asked the bank teller if he had seen the new money yet. To her surprise he said “YES” WooHoo

MZ: I do love that. 

Member: July 1st is supposedly the deadline that banks worldwide have to be Basel 3 complient. 

Member: June 14 is flag day. Supposed to be a big July 4th celebration coming. 

Member: 14 days to June 14 ... it's going to be a big day ... Maybe; the Victory Flag will be waved at the Finish Line ...

Member: Any day the RV happens will be my new favorite holiday 

Member: Juneteenth is a holiday for the ending of slavery and hopefully  it’ll get us out of financial slavery

Member: Once the RV happens we all can start new lives. Thanks Mark for all the encouragement.

Member:  I think we are in better shape than we think..closer than we think

Member: Everyone enjoy your weekend. Hopefully this is the last one where we are broke. 

TIDBIT FROM MNT GOAT

 Mnt Goat  

 I strongly believe that the CBI has broken the proverbial back of the camel, yes, the back of the parallel market...

it is evidenced in an article titled “THE DOLLAR’S DECLINE IS IN THE INTEREST OF CITIZENS AND STRENGTHENS THE PURCHASING POWER OF THE DINAR.” ...

Hamid Abu Firas, owner of a money exchange company, explained...that “this fluctuation in the exchange rate cannot be called a fall in the dollar price, but rather an increase in the value of the Iraqi dinar against other currencies."

 Folks this statement by Firas is a “WOW!” statement. We are hearing this from a money exchanger. These are the people who want the dollar to rise not decline and so this is a very important truth he had to now admit. 

WALKINGSTICK :This [Forex] memo confirms the IIQD is fully armed for public rate visibility at $4.81

 

Foreign reserves between inflation targeting and external rent shocks

 Foreign reserves between inflation targeting and external rent shocks

5/29/2025

Dr. Haitham Hamid Mutlaq Al-Mansour

Monetary policy relies on a fixed exchange rate system to guide the real exchange rate towards the short-term target inflation rate.

This system is appropriate for the Iraqi economy, as real output values ​​are linked to global prices due to the unilateral structure of the economy and the sharp decline in the contribution of non-oil exports to fixed capital formation.

Therefore, the fixed exchange rate system was a realistic option to avoid the erosion of the value of the dinar.

Due to the impact of external rent shocks, controlling foreign reserves (dollars, gold, and securities included on the asset side of the Central Bank’s balance sheet as Iraq’s external debt) has become an instrumental approach to managing the Central Bank’s responses to the aforementioned shocks.

This involves regulating exchange rate fluctuations, targeting inflation rates. Inflation can rise and fall due to external rent shocks, leading to fluctuations.

Therefore, the Central Bank uses its reserves to sterilize the dinar’s expansion through dollar purchases and sales, and cash transactions in the stock market, both buying and selling, to achieve the target exchange rate.

The movement of foreign reserves is linked to public spending on oil revenues in dollars after the Central Bank exchanges them for dinars to meet demand from the private and public sectors, as well as government and household purchases. Depending on the surplus and deficit in the balance of payments, reserves grow or shrink. When oil revenues rise, the central bank refrains from financing the budget deficit, and the government reduces its spending, aiming to raise foreign reserves to be used to finance the budget deficit when oil revenues decline again.

Foreign reserves witnessed a significant increase due to the positive shock in the second half of 2021, reaching 3.244 million barrels per day at an average price of $110 per barrel.

This increased Iraq’s surplus in public finances and overall external balances, as reserves exceeded $90 billion, helping to stabilize the stabilization system and inflation targeting. However, with global oil prices heading towards a negative shock this year (2025) to less than $60 per barrel, and the Central Bank continuing its sterilization policies and measures towards international compliance, this led to a decline in reserves to less than $97 billion in March 2025, after having been around $105 billion in December 2024. Due to the recent shock, the Central Bank resorted to compensating by increasing its foreign exchange sales.

Therefore, in light of external rent shocks, we see the need for coordination between government policy and the Central Bank. From the government policy side, spending must be restricted to purely technical limits, thus deepening the reduction of the government deficit and strengthening the strategic role of reserves. Monetary policy must sustain its goal of achieving a stable inflation rate by managing the movement of the dollar exchange rate and demand for it in the interest of price stability and reducing costs in favor of rational spending policies.

Achieving low and stable inflation is an important factor in enhancing the local and foreign investment climate, which is linked to related economic policies, including commercial, agricultural, and industrial policies.

In short, the dependence of foreign reserve volatility on external shocks will remain a limiting factor in the national economy’s ability to combat inflation and support the investment climate. Therefore, two levels of optimal solutions can be identified.

The first, at the strategic level, involves sustained coordination between fiscal and monetary policies. The second, at the macro and structural level of the Iraqi economy, lies in addressing the rentier nature of the economy by gradually increasing the contribution of non-oil GDP to meet aggregate domestic demand, while supporting export diversification policies.   LINK

TIDBIT FROM WALKINGSTICK

 Walkingstick  

This [Forex] memo confirms the Iraqi dinar is fully armed for public rate visibility at $4.81 with active infrastructure integration, live suppression staging and institutional level confirmation...

We believe this to be true. What that paragraph means is the IQD is now convertible...

[and] has absolutely no restrictions on the currency at all -  Article VIII.

EXCERPTS FROM MARKZ: I heard the September date was when they wanted it completed #iqd #iraqidinar

 

PRIME MINISTER’S ADVISOR: THERE IS NO FINANCIAL CRISIS IN IRAQ AND THE ECONOMIC SITUATION IS UNDER CONTROL

PRIME MINISTER’S ADVISOR: THERE IS NO FINANCIAL CRISIS IN IRAQ AND THE ECONOMIC SITUATION IS UNDER CONTROL.

The Prime Minister’s financial advisor, Mazhar Mohammed Saleh, confirmed on Wednesday that the circulating talk of a financial crisis in the country is “nothing more than rumors,” emphasizing the importance of hedging economic policies in light of the current international circumstances.

Saleh explained that the Iraqi economy relies on oil revenues to finance public expenditures by up to 90%, while government spending constitutes approximately 50% of GDP, which accounts for approximately 85% of total demand and economic activity.

He added, “Current indicators do not point to a financial crisis, thanks to prudent fiscal policies. However, global challenges, such as trade wars and faltering energy markets, require vigilance and caution to maintain the country’s prosperity.”

He pointed out that the oil market is entering the early stages of a price decline cycle, emphasizing that there is close coordination between fiscal and monetary policies to address these challenges through fiscal discipline and controlling revenues and expenditures, in parallel with financing measures that do not negatively impact public spending.

Saleh explained that Iraq has accumulated experience in dealing with oil cycles since 2014, and has succeeded in ensuring economic stability by providing salaries, pensions, and social welfare, supporting agriculture, and strengthening partnerships with the private sector within the government’s reform program.

He concluded by saying, “Securing liquidity to meet the country’s needs is a top priority. There is successful central financial management of this issue, and there are no current concerns in this regard.”