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The Ministry of Finance plans to issue treasury bonds to meet the 2017 budget deficit


yota691
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Iraq plans to issue treasury bonds and approached the World Bank for soft loans

 
 
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Economy News / Baghdad ...
 
 
 
Parliamentary Finance Committee revealed on Sunday, for the determination of the Ministry of Finance issued domestic and foreign treasury bonds to meet the current year's budget deficit, noting the government's intention to approach the World Bank to obtain long-term soft loans.
 
The committee member said Sarhan Ahmed Sarhan in a press statement, "The Ministry of Finance will resort to the issuance of local financing bonds by selling shares to citizens or foreign treasury bonds to meet the current year's budget deficit," adding that "the government also will resort to approach the World Bank to obtain soft loans to pay long-term".
 
He explained that "the shortfall in the budget totaled about 21 trillion dinars and can not fill the deficit only through those steps," and urged a "comprehensive political and national decision to eliminate the financial and administrative corruption and strictly apply the policy of austerity."
 
Sarhan and pointed out that "the move will boost foreign and domestic investor confidence in the market to put his money in a profit-generating projects for factories, residential, tourism and other vital sectors." 
 
 
 
 
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Views 16   Date Added 15/01/2017 - 10:50   Last updated 01/15/2017 - 11:50   No. Content 6454
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The Ministry of Finance plans to issue domestic and foreign treasury bonds to meet the current year 's budget deficit in 2017, revealing the government 's intention to approach the World Bank to obtain long - term soft loans. 

He said the parliamentary finance committee member Ahmed Sarhan Sarhan told I followed NOAA "The Ministry of Finance will resort to the issuance of local bonds financing through the sale of shares to citizens or foreign treasury bonds to meet the current year 's budget deficit." 

He added that " the government also will resort to approach the World Bank to obtain long - term soft loans to pay."

Sarhan said that "the shortfall in the budget totaled about 21 trillion dinars and can not fill the deficit only through those steps, calling for a" comprehensive political and national decision to eliminate administrative and financial corruption and implement austerity entirety.

He pointed out that the move will boost foreign and domestic investor confidence in the market to put his money in a profit-generating projects for factories, residential, tourism and other vital sectors

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29 minutes ago, yota691 said:

will boost foreign and domestic investor confidence in the market to put his money in a profit-generating projects for factories, residential, tourism and other vital sectors

but will not boost  the currency values ?  borrow  , borrow , borrow !  <_<  what is bad  is  ,  they give  ,give , and give ! :huh:

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1 hour ago, yota691 said:

the shortfall in the budget totaled about 21 trillion dinars and can not fill the deficit only through those steps,"

Allaibi: we have reduced the export of oil to 170 thousand barrels per day and hope the arrival of its price for 65 dollars   { a post  by  yota   }     thanks  for all the work  buddy ! ---------------Synopsis    3,491

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The article states, "He said the latest report of the International Energy Agency, in declining investment in the oil and gas sector to the lowest level in 60 years, is a threat of a crisis in supply with the second half of next year and lead to skyrocketing oil prices is greater than any rise was followed by falling prices in the previous crisis."

 

And

 

"According to the International Energy Agency, an adviser in the field of energy states Development Organization for Economic Cooperation report, the global demand continues to decline against the increased supply, but the production capacity reserve in the world also strongly back down, and now more than 1.7 million barrels per day, with the arrival of the production of senior Exporters to full capacity."

 

And

 

"And any natural cycle of oil prices that prices rise sharply after the landing, but the continued fall in prices since the summer of 2014 led to a dramatic decline in investment in the sector and the failure to reach a new oil discoveries to meet demand in the event of increase it.

 

According to the IAEA report, annual investment in the global energy sector in the last two years of $ 780 billion, fell to $ 450 billion, it does not seem that they will recover in the near future."

 

And

 

"But the benefits of declining prices and investment that the cost of production is declining, making reasonable margin of profit even with lower prices, in most producers of OPEC countries do not exceed the cost of production of $ 10 a barrel."

 

This article says a quite a bit.  Having worked in the oil and gas related industry, I have heard the major oil companies have, for the most part, have shelved a significant portion of their capital projects and laid off people who could execute those projects.  As a result, a lot of people in the manufacturing industries supplying the equipment and materials for supporting the capital projects have also had drastic cut backs in their labor force, too.   The declining investment (in relative terms) is the lowest in 60 years.

As could be anticipated, the ripple effect of the lower oil prices does have an impact on crude oil demand by lowering the demand so temporarily, this has a tendency to exaserbate the glut.  However, without drilling new wells and reworking existing wells (requiring capital projects), the oil supply will go down over time.  Older wells deplete and are no longer economically viable.  Also, "senior Exporters to fully capacity" could be another reason Iran was brought back?  With Iran back to trading their oil internationally potentially removes any black market crude oil trading effects so that crude oil prices are controlled directly.

The capital reinvestment is now nominally 60% of what it had been.

I had heard that Middle East land based oil only cost $9 - $20/barrel to produce.  Anything a Middle East country gets for crude oil above that is profit and they can spend on their government funding and citizen subsidies.  So countries like Saudi Arabia suddenly find themselves in a financial deficit with the low oil prices because of the cost of government and citizen subsidies.

There are a couple encouraging conclusions.  Looks like the oil and gas industry will likely boom like no other time in history as crude oil prices go back up.  As a result, the oil and gas industry (and supporting manufacturing industry) will be pulling people back in like no other time in history potentially the later half of 2017 and could be a really good area to be employed in.

The other encouraging conclusion is Iraq basing their budget on $43/barrel and will have no problem paying their bills - and maybe even us will a revalued IQD!

:o       :D       :twothumbs:       :backflip:

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this article  has a lot of good  ideas on the value of 65 dollar barrel  of oil , and  if they get this loan should be no problem about paying it back ,  the problem I have  , is  if they  did increase the value of dinar too , SAY   2 to 1   would this  not be a  problem at all ...  would they not  have double  the cash  ?    

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Thank You, JeepGuy!

Go Moola Nova!

:o       :D       :twothumbs:       :backflip:

The last article states, "He said the parliamentary finance committee member Ahmed Sarhan Sarhan told I followed NOAA "The Ministry of Finance will resort to the issuance of local bonds financing through the sale of shares to citizens or foreign treasury bonds to meet the current year 's budget deficit." 

I am trying to figure out if these bonds are denominated in USD, IQD, or SDR.  If in IQD, I suspect this is really, really good news for us.

Any thoughts or perspectives?

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6 hours ago, Synopsis said:

Thank You, JeepGuy!

Go Moola Nova!

:o       :D       :twothumbs:       :backflip:

The last article states, "He said the parliamentary finance committee member Ahmed Sarhan Sarhan told I followed NOAA "The Ministry of Finance will resort to the issuance of local bonds financing through the sale of shares to citizens or foreign treasury bonds to meet the current year 's budget deficit." 

I am trying to figure out if these bonds are denominated in USD, IQD, or SDR.  If in IQD, I suspect this is really, really good news for us.

Any thoughts or perspectives?

didn`t  the Iraq trade commerce guys  have a big bond sale , just right around the time the  stock market of Iraq opened up for commodities trading ?  I for get if  that was tied too the stock market or was it  linked in with just boosting the economy ,  might be a clue as where the  billions seemed too just show up at the last month of last year ....

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3 hours ago, jeepguy said:

didn`t  the Iraq trade commerce guys  have a big bond sale , just right around the time the  stock market of Iraq opened up for commodities trading ?  I for get if  that was tied too the stock market or was it  linked in with just boosting the economy ,  might be a clue as where the  billions seemed too just show up at the last month of last year ....

You are likely more keen on the bond subject. If I remember right, there were some bonds sold some time ago (several years) and I forget the reason.  About a year ago, the bond sale attempt flopped because Iraq was viewed as a significant investment risk and would have to pay high interest on the bonds - which Iraq was unwilling or unable to do.

Once ISIS, the Iranian militias and leaders, and Turkey gets the boot from Iraq then the GOI gets seated, the necessary laws are passed and are in the appropriate stage of implementation, and a significant amount of criminal prosecution (Maliki and associates) is underway, then I think Iraq will get a significant boost in it's credit rating from Moody's, Fitch, and Standard and Poors. I think there is likely a minimum credit rating that is needed, or will signal, a lower risk and profitable environment for the flood of international investment to Iraq.

I suspect the announcement that Mosul is fully taken will indicate the further initiatives Iraq is taking to ride the wave of the positive sentiment of the citizens to take the necessary steps to further National Reconciliation and gain support for the other social and economic reforms the citizens will benefit from.

Just my opinion and :twocents:

Go Moola Nova!

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http://www.iraqinews.com/business-iraqi-dinar/opec-production-cut-spare-iraqi-budget-us14-bn/

Business
OPEC production cut to spare Iraqi budget US$14 bn: PM adviser

by Mohamed Mostafa
Dec 7, 2016, 10:45 am

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OPEC organization. File photo.

 

Baghdad (IraqiNews.com) A recent decision by OPEC to cut oil production to drive up oil prices will cut Iraq’s 2017 budget deficit by US$14 billion (65%), according to a financial adviser to Prime Minister Haider al-Abadi.
The decision by the Organization of the Petroleum Exporting Countries to cut production from January by nearly 1.2 million barrels per day (3%) to 32.5 million barrels will nourish Iraq’s local economy and reduce the need for domestic and foreign loans, according to Mazhar Mohamed Saleh.
After initial reluctance citing impact from war against terrorism on its economy, Iraq agreed with OPEC last week to reduce its oil production by 200.000 bpd.
Saleh told Almada Press that the decision will have a positive effect on the Iraqi economy through reducing the budget deficit. “One dollar added to oil prices yields an additional annual revenue worth one billion dollars, besides,” he said. “That’s beside halting spending on investments in new oil wells in light of commitment to the OPEC-prescribed production share, which means saving at least 3-4 billion dollars from the investment plan in the 2017 budget.”
The deficit in the proposed Iraq’s 100-trillion-dinar budget for 2017 stands at more than 21 trillion dinars.
The OPEC deal, the first since 2008, goes into force starting January and lasts for six months. OPEC will meet with non-member producers this week in Vienna to reach a final deal on production cut.
World petroleum rates had fallen down by more than 60 percent since 2014, to the dismay of oil-reliant economies, including Iraq, OPEC’s second biggest producer

Shouldn't have a deficit if all goes as planned.

Edited by Lorre
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Example of the same subject....IMO and GM all of DV

A new round of bonds raises warnings from the rush of Cairo to borrow

From the above article......And he warned security Hilmi, Head of Economic Studies at the Faculty of Economics and Political Science at Cairo University, the high borrowing rates from the outside and the burden placed on future generations.

She told "Arabs," "The Egyptian government justify it now, as in the past major national projects will further attract investments in the coming period, which is expanding to fill the huge financing gap until reap the benefits of these projects."

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