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ERBIL, Kurdistan Region — Iraq's Council of Ministers voted to approve the Federal Budget Bill for 2021 in a meeting led by Iraqi prime minister Mustafa al-Kadhimi on Monday night, Kadhimi's office has announced. Controversy was sparked when a draft version of the bill leaked last week said that there would be a cut in the salaries of Iraqi civil sector employees, but Iraqi state media reported that Kadhimi had rejected that section of the bill on Sunday. "The budget bill does not affect the salaries of employees that make up the majority of Iraqi people," Kadhimi said at a press conference soon after the vote. "The targets of this bill are people in higher positions." "The budget bill includes taxes on senior employees, and protection of employees with low or medium wages," he said. "The bill includes reforms in many fields, and supports industries and agriculture." "People with a wage of less than 500,000 dinars have not received any cuts, and people with one million dinar wages will only receive a symbolic cut," he said. "The three presidencies will receive a 40 percent cut in their salaries, and all MPs and ministers will receive a 30 percent cut," labor minister Adel al-Rikabi told press conference attendees. The bill has received the approval of "the different political parties," Kadhimi added. Iraq has had an economically woeful 2020, thanks in part to a global crash in the price of oil and the coronavirus pandemic. The country will have a 58 trillion dinar (approximately $48.7 billion) deficit in 2021, according to the leaked draft of the bill. The bill's approval comes amid the devaluation of the Iraqi dinar by the government on Saturday in a bid to ease the country's liquidity crisis. On Monday protesters took to Tahrir Square, an epicenter for anti-government protests since October 2019, to voice their disapproval of the devaluation. Kadhimi told the press conference that Turkey will be providing Iraq with financial assistance to further ease the country's economic woes. Kadhimi and foreign minister Fuad Hussein visited Turkey last week, but no reference to financial assistance from Ankara was made in the joint press conference between the Iraqi premier and Turkish president Recep Tayyip Erdogan. "The Turkish government is willing to help Iraq with $5 billion," Kadhimi said. On the continuing budget dispute between Erbil and Baghdad, Kadhimi said "we are working on resolving our issue with the [Kurdistan] Region soon, God willing," adding that Kurds are also people of Iraq. "We will reach a deal." Within minutes of the bill's approval by the Council of Ministers, Iraqi Twitter users had the hashtag "Reject_Kadhimi's_BudgetBill" trending. Updated at 12:01 am on December 22, 2020

ERBIL - The Budget Bill for the year 2021 enjoys the support of all political parties in the country, Iraqi Prime Minister Mustafa al-Kadhimi said on Monday. Kadhimi, during a press conference held after the Council of Ministers approved the 2021 budget bill, pointing out that the bill will not affect the salaries of public employees who make up the majority of Iraqi people. He noted that those who will be affected by the budget bill are people in higher positions. Labor Minister Adil al-Rikabi explained in a statement that, based on the 2021 budget bill, there will be a 40% cut in the salaries of the three presidencies while ministers and lawmakers will receive a 30% cut in their salaries.

Economy News • Iraq News Now Adel Abdul-Mahdi comments on changing the exchange rate of the dollar and makes several proposals Posted 4 hours ago Add a comment https://iraqakhbar.com/2817390News source / Iraqi Media News Agency "INA" News source / Iraqi Media News Agency Former Prime Minister Adel Abdul-Mahdi commented, on Monday, regarding the change of the dollar exchange rate that the current government recently made, while he presented several proposals to get out of the economic crisis afflicting the country. Abdul Mahdi said in a post on his Facebook page, followed by (Iraqi Media News Agency ) , which included the following: The exchange rate, treasury and budget crisis 1- The asset is historically in currency, it is a commodity. People exchanged their goods and services for the goods and services of others. 2- Markets expanded, goods and services increased, and it is no longer practically possible to deal as commodity for commodity. So people turned to commodities that are easy to carry, preserve and fragmentation, so they were metal goods. A coin was born of gold, silver, copper, etc., which bears its value with its value. 3- Transactions increased, so people began to keep their gold or minerals in houses, and issue a document or certificate of the value of their mineral assets of gold and silver. Banks and banknotes covered with storage, reserves or metal cover were born, and they became the “equivalent” in which the values of goods, services, business, etc. are balanced. . 4- Financial houses or banks noticed that people who deposit gold or silver with them do not withdraw their money at once, but rather that the bulk of it saves it, which allowed it to issue banknotes without having a real cover. That is, it invests the money of others, and achieves profits for itself that far exceed the profits of the commissions that it collects from depositing money with it. 5- Economic life has evolved further as the understanding and experience has developed among households, banks, governments and states, that is, everyone who represents the monetary authority is that the lesson is not with the metal but in the transactions of goods and services produced and traded by people. And that the currency is only an "equivalent" that has become acceptable to people, for what is equivalent to the value of these transactions. And the duty of the monetary authority is to issue papers equivalent to the need for streamlining and good circulation of goods and services. If you issue more, there will be inflation, and if you issue less, there will be deflation. Or what “Al-Maqrizi”, son of the fifteenth century, called “money boom” for the first, and “money depletion” for the second, with the large number of sultans at that time blocking the deficit of their coffers by using “Al-Kaghad” as a pledge to pay, or what we today call securities. 6- Commodity or metal currency carries its value with it, so people are reassured about it. As for paper money, confidence in it must be generated in order for it to stabilize and become an essential tool for trading. People will be happy if they wake up one day and find that the value of their currency has risen, and this is a small matter, but they are often shocked and sad when they wake up one day and find that the value of their currency has decreased, and consequently their assets and real purchasing power have declined. In addition to that, the markets and economic activities, especially the medium and long term, need to stabilize the value of the currency in order for people to offer to deal with it and not with others. 7- In sum, the currency reserve or its cover which was in the past a “previous” condition for the issuance of paper currency has developed in recent decades - especially after the abandonment of the gold standard according to “Bretton Woods” after World War II and also at the beginning of the seventies after the dollar departed from gold. To the possibility of it becoming a true "subsequent" for the issuance or offer of the currency. The reserve or the cover has been gradually transformed in most of it into a hypothetical state and into ratios and equations to determine the size of the currency supply, which should meet the need for the movement of production and circulation of goods and services. Not every issued monetary unit necessarily has its equivalent in real reserves. Numerous theories and practices emerged that go to abstraction and assumptions rather than to remain automatically committed to reserves and their values. Banks and monetary authorities began issuing currency in its various forms and granting banking and credit facilities without cover or corresponding reserves. Some of these issues are justified and legitimate, and some are unjustified and unlawful. 8- Justified and legitimate because it brings benefits if he goes to the world of transactions and produces more goods and services that will bridge the gap between the reserve or default cover with the monetary mass and the currency supply, then the balance that was disturbed will return after a period of time. It is like deferred and urgent payment, which are the focus of the value of the work presented. 9- It is unjustified and unlawful, so it brings harm if it goes to speculation, enrichment, usurious tendencies, collecting money and excessive unbridled inflation, without all of this being matched by real work and production of goods and services, so the gap between the size of goods and services and the supply of currency increases, so crises occur and the currency’s value collapses as it collapsed before 2003. Rather, people lost confidence in them and dealt with foreign currencies that they trusted more. So we have a "Rank Xerox" dinar, the Swiss dinar, the dollar, the Turkish lira, the Iranian riyal, and so on, which cost us a lot before we restore confidence to the dinar and unify all transactions and national accounts accordingly. 10- In Iraq, despite the claims of the entirety of our systems that we went through during the current and previous century, that we have liberated and liberated our national currency, but we are still working with old practices when the dinar was linked to the pound sterling, that is, our currency is not linked to the production of all the goods and services that we produce, but rather is linked to a cover, Today, the dollar basically, which the Central Bank has reserves estimated at the beginning of 2020, is approximately $ 67 billion, which puts Iraq in third place in the Arab world, and gold bullion (we have 96.3 tons of it and are ranked 35 globally and fifth in the Arab world). The reason for this is that we are an oil rentier country, and oil is sold in dollars. Therefore, our reserves, which are the main indicator of our cash issuances, depend on what we have mainly dollars or foreign coins, or what we buy and store of gold, must be sufficient for at least half a year of necessary imports for the country according to International Monetary Fund Equations. 11- The budget depends on that, and the economy depends on that, and the salaries, rights, and entitlements of farmers and contractors all depend on that. In short, the markets as a whole depend on that. When the blockade was imposed and oil exports stopped, the dinar fell from 0.333 dinars per dollar to 3,000 dinars per dollar. And when oil prices decrease or our exports decrease, everything retreats and an equivalent national economy does not stand in front of it that can overcome the crisis and avoid its repercussions, and protect the national currency, which is a basic address of sovereignty and independence. 12- That is why we structured the International Monetary Fund or structured ourselves in front of the Monetary Fund according to this fatal equation, which has no way out if we do not address the monetary reality with the economic reality. The monetary truth became absolutely stifling and a barrier to economic reality. While the correct view is that the economy is the basis, not currency or cash. And that the currency should be serving the economy and not vice versa. 13- That is why our economy continued to adopt the cash economy, with great wealth standing outside the banks, afraid of arbitrary measures to make these funds closer to the spread of corruption and to hoarding them for investment, launching expanded production cycles and achieving progress and sustainable growth. That is why the so-called Narrow Money or paper currency remained the basis, so bills of exchange and digital and electronic currency disappeared, rather the use of instruments decreased, savings retreated, and most of the currency became outside the banking cycle, so the real mechanisms of saving and investment were absent with it, and the credit role of the banks as financiers of projects disappeared, and not Her only concern is currency speculation to achieve profits. 14- In recent years, oil resources are 40-60 billion dollars annually, and the gross national product is 5-6 times this number, meaning there is an important part of the gross national product, or national income, or the total production of goods and services produced nationally, whether based on oil resources Or non-oil. 15- Here we can make a breakthrough to move the economy and support the national currency and reduce the risks of absolute dependence on foreign currency, by encouraging the state, and with its direct and indirect guarantees, for means of payment in the so-called Broad Money (M2, M3, M4) that is currently almost frozen And practically uninvested. When activating these trends and granting them confidence and protection, we will provide large liquidity needed by the economy, treasury and budget, which will be covered and paid off by the expansion of economic activities. 16- We say frozen because part of the liquidity that will be provided by increased facilities in the "broad currency" will come from the goods and services produced outside the oil resources, which will later bridge the gap between the currency supply and its cover or reserves. 17- But for success in that, there are conditions that seem possible and the economic authority can adopt them with relative ease, provided the minds accept them. In Iraq, there is an important "effective demand" caused by the large number of spending, which is now being met through imports and the increasing need for foreign exchange. In Iraq, there is experience and productive capabilities that have been disrupted by wars, blockades, and erroneous rentier and non-rentier economic trends. Especially in the needs of which the "marginal tendency to consume" (the predominance of essential consumer spending) is an essential element. This "effective demand", most of which is for people with limited income, can be financed initially by "broad currency" and by direct and indirect sovereign guarantees, even if they do not have cover or initial reserves corresponding to them. Under certain conditions, the demand here can move the subsequent national production that will bridge the gap, restore the balance, and make the "broad" national currency in exchange for or equivalent additional goods and services.Thus, activities, production, markets and employment move, and a new expanded production cycle is created that feeds the economy and helps to increase reserves, finance the treasury and the budget with more national currency and fulfill what the guarantees sought to achieve, thus reducing dependence on foreign exchange (mainly the dollar) and increasing the proportion of the non-oil sector output in output National gross. 18- As for the conditions, they are to make the establishment of small, medium and large enterprises, individual and collective, national and foreign, and to grant permits and facilities a priority in front of which all unjustified anomalous obstacles will recede, so that philosophy is the priority of starting and not restraining. There are many legal, bureaucratic, societal, political, intellectual and formal obstacles, both internal and external, that only serve to increase extortion, holidays and corruption. And attention to outputs as a priority and criterion for success in contracts and business, and to provide the necessary inputs, whether in government contracts or private projects. And the protection of production and producers, whether through protection measures whenever possible, or by encouraging and promoting the product, providing financial assistance, allowances, exemptions and support, and all that is required to succeed in that

The government reveals important details about the 2021 budget and large deductions in higher salaries Time: 12/21/2020 21:36:01 https://alforatnews.com/news/وزير-المالية-اجرينا-تغييرا-بسعر-صرف-الدولار-لحماية-الاقتصاد Read: 21,060 times {Baghdad: Al Furat News} The government revealed important details of the 2021 budget and large deductions in higher salaries Finance Minister Ali Allawi said in a press conference after the extraordinary cabinet session and the vote on the fiscal budget bill for 2021: We made a change in the dollar exchange rate to protect the economy, pointing out that "the revenue difference by changing the exchange rate will be allocated to support vulnerable groups in society. " The budget is the first step in the path of economic reform. " For his part, Minister of Planning Khaled Al-Battal said at the conference that the volume of investment spending would be around 8 trillion dinars, and that the budget included the suspended train project, the Faw port and a number of projects. While Minister of Labor, Adel Al-Rikabi announced during the conference, "40% of the salaries of the three presidencies will be deducted from the budget, and 30% of the total salaries of MPs and ministers have been deducted." Raghad Daham

Al-Kazemi: The budget was presented to the political blocs, and all of them were supportive of the government's measures 21:30 - 21/12/2020 https://www.almaalomah.com/2020/12/21/511352/ Information / Baghdad Prime Minister Mustafa Al-Kazemi confirmed, on Monday, that the budget was presented to the political blocs, and all of them were supportive of the government's actions. "The budget was presented to the political blocs, and all of them were supportive of the government's actions," Al-Kazemi said in a press conference followed by the "information", indicating that "the budget only affected the salaries of special and higher degrees." The Cabinet voted this evening on the 2021 budget, at a time when the Minister of Finance confirmed that the measures taken to raise the exchange rate of the dollar against the dinar will be supportive of the Iraqi economy . 25 n

Parliamentary Finance: The 2021 budget does not address any crisis, and there is an inflation of presidential allocations Editing date: 12/21/2020 18:45 •http://www.alliraqnews.com/modules/news/article.php?storyid=105427 [Baghdad-Where] The Parliamentary Finance Committee confirmed, on Monday, that the draft 2021 budget prepared by the government does not indicate that it addresses any financial crisis, indicating that it contains sums and allocations for presidencies and ministries, exaggerated, large inflation and extravagance. A member of the Finance Committee, Mahasin Hamdoun, said, "The country under the Al-Kazemi government goes from bad to worse and is moving towards an abyss without planning." She added that "the Al-Kazemi government talks about a major financial crisis and requested loans and raised the exchange rates of the dollar, which is supposed to be matched by the 2021 draft budget with high austerity and prevention of extravagance." . Hamdoun explained that "the draft budget for 2021 is devoid of any strategic financial plan, and it appears that Prime Minister Mustafa Al-Kazemi encourages corruption and the corrupt."

Failed decision .. Representative economy member: Parliament is not satisfied with raising the price of the dollar Monday, 21-12-2020, PM 6:15 Karrar Al-Asadi http://non14.net/public/131633 Text size Member of the Parliamentary Economic Committee, Falah Al-Khafaji, confirmed, on Monday, that the House of Representatives is not satisfied with the government's decision to raise the exchange rate of the dollar, describing it as a "failed decision," while indicating that Parliament will host Prime Minister Mustafa Al-Kazemi and Minister of Finance Ali Allawi regarding this. Al-Khafaji said in a televised interview, that "the parliament is not satisfied with the performance of the government and the committee for evaluating the government's work gave only 17% success and 83% failure," indicating that "Parliament will host ministers one after the other to hold them accountable." He added, "The raising of the dollar exchange rate is a failed decision, and we will host the Minister of Finance and the Prime Minister to hold them accountable, because the decision will harm the poor, winning citizen, and only he will bear the high prices." Al-Khafaji pointed out that "the decision to raise the price of the dollar also hurt the contractors and demanded compensation, and if they stop working, unemployment will rise in Iraq." The exchange rate of the dollar against the dinar recorded a decline by four o'clock this evening in all cities of Iraq. The exchange rate for sale on the Kifah Stock Exchange in Baghdad, the capital, was 1,400 dinars to one dollar and 1,380 for purchase. The exchange rate in Erbil was 1375 for sale and 1360 for purchase. In most southern cities, the dollar’s exchange rate also recorded a decline, by 1390 for sale and 1370 for purchase. The dollar exchange rate closed in most governorates of Iraq at a price ranging between 1450-1470 per dinar yesterday. Citizens were surprised about how the exchange rate decreased today, despite the Central Bank’s announcement that the dollar was sold to citizens at a value of 1470 to citizens and 1460 to banks. The prices of goods and foodstuffs rose in the Iraqi market, in conjunction with the decision of the Ministry of Finance and the Central Bank to raise the exchange rate of the dollar against the dinar

Finance: The 2021 budget is the first step in the path of economic reform Finance Minister Ali Abdul Amir Allawi "Internet" money and business Economy News - Baghdad The Minister of Finance, Ali Allawi, announced that the 2021 budget is the first step in the path of economic reform. On the other hand, Minister of Planning Khaled Battal said that the volume of investment spending will be around 8 trillion dinars, indicating that the budget included the suspended train project, the port of Faw and a number of projects. The number of observations: 8 Date added: 12/21/2020

Al-Furat News publishes the most important things in the 2021 budget Time: 12/21/2020 21:58:50 https://alforatnews.com/news/الفرات-نيوز-تنش-ابرز-ما-جاء-في-قانون-موازنة-2021 Read: 38,740 times {Baghdad: Al Furat News} Our agency publishes the highlights of the draft fiscal budget law for 2021, which the Council of Ministers voted on Monday after an exceptional marathon session that lasted for three days. An informed source told {Al-Furat News} that "the fiscal deficit in the budget amounts to 63 trillion dinars, and a 40% tax has been imposed on the salaries of presidents, ministers, deputies, general managers and special ranks." He added, "The non-inclusion of employees who earn less than a million in taxes, and the full deduction of income tax on salaries of more than one million dinars." Prime Minister Mustafa Al-Kazemi said in a press conference after the cabinet meeting and the vote on the draft law that "the budget will not affect the salaries of the employees of the two classes that make up the majority of the people," indicating that "the target party in this budget is the upper classes." He stressed that "the budget only affected the salaries of special and higher grades, for his part, Finance Minister Ali Allawi said at the conference:" We made a change in the dollar exchange rate to protect the economy, "pointing out that" " He added, "The budget is the first step in the path of economic reform." As for Planning Minister Khaled Al-Battal, he stated that "the volume of investment spending will be around 8 trillion dinars, and that the budget included the suspension train project, the Faw port, and a number of projects." While the Minister of Labor, Adel Al-Rikabi announced during the conference, "40% of the salaries of the three presidencies will be deducted from the budget, and 30% of the total salaries of MPs and ministers will be deducted." A leaked document indicating that the government imposed new taxes on the salaries of senior state officials was revealed in a copy of the draft budget law. According to information from the transcript, "the government imposed taxes of 40% on the salaries of presidents, ministers, deputies, general managers and special ranks without prejudice to the salaries of junior employees who will not be included in taxes, down to the recipients of one million dinars." The tax deduction will be "symbolic" on salaries above one million dinars , "according to preliminary information briefed a government official made a copy of the budget. Raghad Daham

Finance Minister: We made a change in the dollar exchange rate to protect the economy Time: 12/21/2020 21:14:01 https://alforatnews.com/news/وزير-المالية-اجرينا-تغييرا-بسعر-صرف-الدولار-لحماية-الاقتصاد Finance Minister Ali Allawi: We made a change in the exchange rate of the dollar to protect the economy. The revenue difference by changing the exchange rate will be allocated to support vulnerable groups in society. The budget is the first step in the path of economic reform. Minister of Planning Khaled Al-Battal: The volume of investment spending will be around 8 trillion dinars. The budget included the suspension train project, the Faw port and a number of projects

2021 budget imposes 40% taxes on senior officials Time: 12/21/2020 21:09:58 https://alforatnews.com/news/موازنة-2021-تفرض-ضرئب-على-كبار-المسؤولين-بنسبة-40 Read: 5,824 times {Baghdad: Al-Furat News} The Iraqi government imposed new taxes on the salaries of senior officials in the Iraqi state, in the budget copy voted by the Council of Ministers today. The preliminary information from the budget copy voted on by the Council of Ministers today indicated that "the government imposed taxes of 40% on the salaries of presidents, ministers, deputies, general managers, and special ranks, without prejudice to the salaries of junior employees." And it indicated that "those who will not be included in taxes, down to the recipients of one million dinars, while a" symbolic "tax will be deducted on salaries over a million dinars," according to preliminary information made by a government official who has seen the budget copy. " Raghad Daham

The Cabinet votes on the federal general budget for the fiscal year 2021 20:25 - 12/21/2020https://www.almaalomah.com/2020/12/21/511341/ Information / Baghdad On Monday, the Council of Ministers voted on the federal budget for 2021. The Media Office of the Prime Minister said in a statement received by / the information /, that "the Council of Ministers voted on the federal budget for the fiscal year 2021." He added, "The vote was decided in the extraordinary session held today, Monday, headed by Prime Minister Mustafa Al-Kazemi." It was hoped that the Council of Ministers would vote on the budget on the day before yesterday, while that was postponed to yesterday, amid discussions within the council regarding some decisions, which delayed the vote until today, amid popular and parliamentary rejection of what some of the budget paragraphs endured, especially with regard to raising the dollar exchange rate In front of the dinar. 25 n

Rikabi: The government has no control and raising the dollar represents a blow to the markets 20:41 - 12/21/2020https://www.almaalomah.com/2020/12/21/511343/ Information / Baghdad On Monday, MP Kata Al-Rikabi described the decision of the Ministry of Finance and the Central Bank to raise the exchange rate of the dollar, a hasty step that dealt a heavy blow to the Iraqi markets. Al-Rikabi said in an interview with Al-Maalouma, “The raising of the US dollar’s exchange rate surprised everyone, whether politicians or even observers of economic activity. "Unprecedented for prices and for foodstuffs." He added that "any government approval to raise the exchange rate must be matched by alternatives that secure immunity to the poor and the simple from the flame of prices in the markets, which unfortunately the government does not have any control frameworks over if prices are on a continuous rise in a manner that constitutes another burden on the shoulders of the poor and the simple." Reconsidering the financial and central bank decisions and looking for economic solutions that contribute to overcoming the financial crisis without any impacts on the markets, especially basic foodstuffs. The Iraqi market witnessed a steady increase in prices after the day of raising the exchange rate of the US dollar at high rates. ”25 P

12/21/2020 19:28 The Cabinet votes on the 2021 federal budget https://almasalah.com/ar/news/202774/مجلس-الوزراء-يصوت-على-الموازنة-الاتحادية-لعام-2021 Baghdad / Al-Masala: The Council of Ministers voted on the federal budget for the fiscal year 2021, in the extraordinary session held on Monday, December 21, 2020, chaired by Prime Minister Mustafa Al-Kazemi. Obelisk publishes the text of the statement: The Cabinet votes on the 2021 federal budget -------------- The Council of Ministers voted on the federal general budget for the fiscal year 2021, in the extraordinary session held today, Monday, under the chairmanship of the Prime Minister, Mr. Mustafa Al-Kazemi. Media Office of the Prime Minister December 21-2020 Follow the obelisk

ERBIL, Kurdistan Region – Iraq's Council of Ministers voted to approve the Federal Budget Bill for 2021 in a meeting led by Iraqi prime minister Mustafa al-Kadhimi on Monday night, Kadhimi's office has announced. This is a developing story...

MP calls for emergency session after the collapse of the Dinar exchange rates Iraq News emergency https://shafaq.com/en/Iraq-News/MP-calls-for-emergency-session-after-the-collapse-of-the-Dinar-exchange-rates 2020-12-21 03:01 Shafaq News / Hassan Karim Al-Kaabi, First Deputy Speaker of Parliament, called for an "emergency" session of the Council of Representatives in the presence of the Prime Minister, Minister of Finance and the Governor of the Central Bank to discuss the repercussions of the "sudden" rise in the dollar exchange rate against the Iraqi Dinar. In a statement, Al-Kaabi demanded providing the necessary guarantees to protect the vulnerable and low-income classes. Yesterday, Sunday, 28 members of the Iraqi Council of Representatives called for an "urgent" parliamentary session. They announced that they would collect signatures to host Prime Minister Mustafa Al-Kadhimi, the Minister of Finance, and the Central Bank Governor. The Iraqi Council of Ministers adjourned its emergency session to discuss the draft federal budget law for 2021, to be resumed on Monday afternoon. A government source told Shafaq News Agency that the Parliament decided to complete the discussion on the draft budget law on Monday afternoon after passing most of its paragraphs and making amendments to the draft submitted by the Ministry of Finance. An informed source revealed, on Sunday, that the Council of Ministers had made amendments to the draft Budget Law 2021 during a session held on Sunday morning.

Iraq devalues currency by 22 per cent December 21, 2020 at 1:39 pm | Published in: Iraq, Middle East, News An Iraqi counts his dinar banknotes on 22 June 2017 [Ali Choukeir/AFP/Getty Images] December 21, 2020 at 1:39 pm https://www.middleeastmonitor.com/20201221-iraq-devalues-currency-by-22-per-cent/ Iraq has seen the biggest devaluation of its currency since the 2003 US led invasion with the Central Bank announcing on Saturday that it was devaluing the dinar by 22 per cent. The desperate measure, undertaken in response to a severe liquidity crisis brought on by low oil prices, has sparked public outrage. According to the AP, riot police were dispatched outside the central bank headquarters in central Baghdad prior to the announcement in the event news of the devaluation sparked protests. A leaked draft of the state budget law for 2021 caused furore on the Iraqi street last week as it confirmed plans to devalue the dinar. The new rates represent a dramatic reduction from the previous official rate of 1,182 IQD (Iraqi dinar). It is the first reduction in exchange rates that the Iraqi government has made in decades. In a statement, the Central Bank set the new rate for the dinar, which is pegged to the US dollar, at 1,450 IQD when selling to the Iraqi Finance Ministry. The dinar will be sold to the public at 1,470 IQD and to other banks at 1,460 IQD. Since an oil price crash earlier this year, Iraq has been grappling with an unprecedented liquidity crisis. The crude-exporting country has had to borrow from the bank's dollar reserves to pay the nearly $5 billion in monthly fees for public salaries and pensions. Oil revenues, which account for 90 per cent of the budget, have brought in an average of $3.5 billion. Iraq: Foreign exchange reserves down 12.5% in Q1 of 2020 Iraq's public sector has trebled in size since the 2003 invasion, and the government is easily the country's biggest employer. The World Bank is expecting poverty to rise sharply as its oil-dependent economy shrinks, said a report in the Financial Times. War-fatigued Iraq's financial situation is said to be so grave that Baghdad is in talks with the IMF for support. Devaluation "sends a signal to the IMF and others about how desperate the situation has become and Iraq is ready to take some of these painful steps" towards more fiscal austerity, Sajad Jiyad, a Baghdad-based fellow with the Century Foundation, is reported saying in the FT. With Iraq relying on imports, Jiyad warned of the pain the potential inflation would cause. "For the general population there's a worry that food prices will increase, we still import most of our foodstuff," said Jiyad. Iraq's Finance Minister Ali Allawi has warned of the wider corruption fuelling the financial crises saying that Iraq must take serious measures to reform its spending, which has ballooned as politicians used public hiring to buy votes and loyalty.

The government is waging a war against the Iraqi citizen and there is great anger in Mesopotamia https://alahadnews.net/145866/خاص-بوكالة-العهد-نيوز/ MP Nada Shaker Jawdat said today, Monday, that the Iraqi government is waging a war against the citizen through the financial policy it announced. In an interview with Al Ahed News, Jawdat said, "There is great anger in the Iraqi street at the government's move to raise the price of the dollar, and that these measures affect the livelihood of simple people." "Why is the simple citizen always the one who pays the price?" Shaker asked. Indicating that this is due to their mismanagement and corruption

A Kurdish parliamentarian reveals a problem hindering the agreement between Baghdad and Erbil 17:36 - 12/21/2020https://www.almaalomah.com/2020/12/21/511304/ Information / Special ... Osman Karim, a member of the Kurdistan Regional Parliament for the Patriotic Union of Kurdistan, revealed that there is a problem impeding the agreement between Baghdad and Erbil. "The federal government wants the Kurdistan region to deliver the oil completely to SOMO, while the regional government wants to hand over the financial value of the exported oil," Karim told Al-Maaloumah. He added that "the region has contracted with specialized companies that extract and export oil and cannot cancel these agreements because it will have legal and financial problems." He pointed out that "there are signs of reaching an agreement regarding the region in the 2021 budget, but the problem of oil delivery is the major obstacle." The Minister of Finance, Ali Allawi, had confirmed that the federal government had reached an agreement with the Kurdistan Regional Government regarding the region's share of the 2021 budget.

Minister of Finance are far from the citizen and reality 14:38 - 12/21/2020 https://www.almaalomah.com/2020/12/21/511272/ Information / Special ... On Monday, the Parliamentary Economic and Investment Committee considered the government’s policy and Finance Minister Ali Abdul Amir Allawi, regarding the economic crisis, as far from the citizen and reality. Committee member Nada Shaker said in a statement to "the information", that "raising the price of the dollar against the Iraqi dinar is a matter that greatly affects the livelihood of people with limited income and poor groups of society." “. She added that "the Minister of Finance, Ali Abdul Amir Allawi, is acting far from the citizen and all the revolutions he took to solve the crisis negatively affect the citizens," indicating that "government reform is an economically wrong approach." The Parliamentary Economic Committee confirmed, yesterday, Sunday, that the government of Prime Minister Mustafa Al-Kazemi is unable to address the current financial crisis. The Minister of Finance announced, earlier on the day before yesterday, Saturday, to raise the exchange rate of the dollar against the Iraqi dinar, confirming that all appointments will be stopped in the budget for next year

INA documents a decline in commercial centers and stock trading Monday 21st December 2020 - 16:56 https://www.ina.iq/eng/10310/ina-documents-a-decline-in-commercial-centers-and-stock-trading INA – Baghdad Photography - Safaa Alwan Iraqi News Agency (INA) documented the decline effects in commercial centers as well as in the stock exchange markets in Baghdad. It seems that the decision of the Ministry of Finance and the Central Bank to raise the exchange rate of US dollar to 1.450 IQD, reflected on the shopping movement. INA camera observed a noticeable stagnation in the shopping movement in Shorja market and the surrounding commercial areas. Iraqi Stock Exchange also stagnated in a session today, amid anticipation and warnings of speculators in the stock market.

Iraq faces unprecedented economic shock following currency devaluation As politicians debate sharp austerity proposals, ordinary Iraqis once again fear for the future https://www.thenationalnews.com/world/iraq-faces-unprecedented-economic-shock-following-currency-devaluation-1.1132732 News of Iraq’s currency devaluation spread quickly last week when a copy of next year’s draft budget was leaked to local media. The news sent the unofficial rate at exchange houses skyrocketing, disturbing local businesses and panicking Iraqis. “We are finished,” Tayieb Sabah told The National on Sunday as he walked nervously through the aisles of his supermarket, instructing workers to take down goods from the shelves and upwardly adjust prices. “We have been accumulating losses since last week due to the fluctuation in the exchange rate after the devaluation news spread. We pay the suppliers in dollars and sell in dinars,” the 40-year-old Mr Sabah said. Before the recent news, the unofficial exchange rate was ranging from 1,200 to 1,240 dinars against one dollar. That rate soon hit as much as 1,400. “Suppliers have been calling us all day to change prices and we don’t know what to do,” he added. As a salesman entered the supermarket to offer goods, Mr Sabah yelled at him. “No, thanks. I will not order anything today!” “Sir, we sell according to the old prices,” the salesman told the supermarket owner, who turned his face away. “Let’s wait and see to where this chaos will take us,” added Mr Sabah. “I want to save myself and my business first.” Iraqi PM Mustafa Al Kadhimi has said he would be the “first hurt” by the devaluation and austerity proposals in the 2021 budget, because of the inevitable public backlash. But Iraq is also draining its currency reserves and faces a record breaking $40 bn deficit next year, according to Finance Minister Ali Allawi. As a result, Iraq’s policy makers are now grappling with what promises to be the most controversial budget since 2005, when Iraq drafted its first budget following the 2003 fall of Saddam Hussein. Economic nosedive Mr Sabah is now applying a 25 per cent increase on the total amount of each invoice, something grudgingly accepted by clients. “The grave consequences of this move will not appear now. But we’ll see them two to three months from now when the market enters into recession,” he said.On Sunday, wholesale and retail markets in Baghdad and other cities were almost deserted as sellers applied the higher exchange rate as protection, while buyers preferred to wait until things calm down. “I will wait and see how things go. There are rumours that the government might retreat and apply the previous exchange rate,” said one currency exchanger. Some exchange houses prefer to keep working but are playing it safe. “Since the price is unstable, I buy the dollar at the 1,400-dinar rate and sell at 1,460,” Emad Salman, 63 said. Demand for dollars has increased by nearly 50 per cent since last week, Mr Salman added. Surging poverty “All prices have increased by at least 20 per cent,” said Balkis Abbas, while shopping at one of Baghdad’s markets. Mrs Abbas is a doctor employed by the Defence Ministry and before the recent crisis, could have counted herself lucky to have a coveted government job. Like many Iraqis, the mother of two says her family has been reduced to buying essentials, and the list of what they can afford is steadily shrinking. A man walks through a market in the southern Iraqi city of Nasiriyah in Dhi Qar province, on December 20, 2020. AFP Photo Among things omitted from her shopping list are preparations for Christmas, cancelling perfumes and household goods she’d ordered previously. “To be honest, I will not take a risk and pay for these unessential things now because the situation is unstable,” she said, loading her car with a few bags of essential winter clothing for her daughters. “Now, whoever has children pays only for food and drinks,” she added. If the planned 50 per cent deduction on allowances is applied – a cut suggested in the current draft budget — she will end up with about 1.5 million Iraqi dinars a month, around half of which goes to pay rent. “I will quit my job and leave to the country,” she adds. An uncertain year ahead The devaluation has severely hit the pockets of public servants, raising fears that a burgeoning youth protest movement, until now largely confined to the unemployed, will expand to the public sector. Such a development is becoming likelier: According to Finance Minister Allawi, without urgent austerity measures Iraq’s foreign currency reserves could be depleted in as little as six months. In other words, currency devaluation is a necessary but bitter medicine. A man talks to a fruit vendor at a market in the southern Iraqi city of Nasiriyah in Dhi Qar province, on December 20, 2020. AFP Photo "The devaluation was done in full cooperation with all the major political parties and Ali Allawi explained the reasons behind this and they all agreed," said Sarkwat Shams, a Kurdish MP for the Future Party, in remarks to The National. "There may be some noise on the streets and some members of parliament may make some noise, but when the budget bill will come to parliament they may increase or decrease some of the cuts proposed by government. But it will pass, there is no other way to help the government to fund itself." Other Iraqi political leaders disagree. Ayad Allawi, former Prime Minister and secretary general of the Iraqi National Movement said that he warned the government five years ago about the situation. Mr Allawi called for the formation of an international body to oversee the dollar auctions held by the Central Bank, long suspected of being a major source of corruption involving shell companies. "The decision to lower the prices of the dinar is wrong, and shows the government's inability to deal with the economic crisis, especially as it seriously hurts Iraqi families," he said. Security salaries on the line Many MPs in parliament have said they would oppose salary cuts, calling them a “red line.” In addition to re-energising Iraq’s protest movement, Iraq’s sharp economic decline could give rise to the worrying spectre of security turbulence next year, if the situation is not reversed. Iraqi authorities recently deployed anti-riot troops around the Central Bank in Baghdad as activists were called for demonstrations on Monday afternoon. Much worse could lie ahead. At the height of the war against ISIS, a public row erupted between members of Iraq’s Popular Mobilisation Forces (PMF), a group of militias who are mainly loyal to Iran. At issue was the question of fighters’ salaries and whether the cash-strapped Iraqi government could raise them as oil prices tumbled below $30, or expand the number of fighters on the payroll. Some groups, including a powerful militia controlled by the unpredictable cleric Moqtada Al Sadr, accused Iran-backed groups of stealing funds. But now the situation is much worse, with little sign of recovering oil prices, at least not to the level the Iraqi government requires to pay salaries. The risk now is that groups in the PMF, which have clashed in the past, could again come into conflict. According to Sajad Jiyad, an Iraqi analyst and fellow at The Century Foundation, this won’t be a concern as long as funds are available. "The devaluation will not have an impact on salaries being delayed for security forces, because the government has prioritised payment of salaries for security forces for many years, even during a crisis,” he says. But that could change next year, especially if Finance Minister Allawi’s warning about available currency reserves rapidly diminishing holds true. “Going forward, if there was a salary reduction and taxes, that’s when it will begin to hurt people, especially in the security sector." Iraqi policy makers now face an impossible dilemma, risking the creation of a new, nationwide protest movement next year, whether sharp austerity measures are implemented or not.

ERBIL, Kurdistan Region — Iraqi demonstrators took to protest epicenter Tahrir Square on Monday to air their discontent after a government decision to devalue the country's currency. Hundreds of protesters returned to Tahrir Square, the point of origin for anti-government protests that spread across central and southern Iraq in October 2019, this time demanding that the government reverse its decision to decrease the value of the Iraqi dinar against the US dollar. “We are here to get rid of corruption,” one protestor in Tahrir Square told Rudaw’s Halkawt Aziz. “The increase in the value of the dollar is a colonial plan against the people of Iraq, we want the price to return to normal," the protester said. "They bring us crisis after crisis without letting us breathe.” “Look at the street and look at these people," another protester said. "These militias have taken all the money for themselves.” The Tahrir Square protesters were met with a heavier than usual security force presence, Aziz told Rudaw English from the scene. "Even though the protesters are planning to stay the night, it is highly unlikely that the security forces will allow them to do so," Aziz added. The Central Bank of Iraq announced on Saturday that it would be devaluing the country’s currency in an effort to combat a liquidity crisis and bring in much-needed cash. According to a statement published by state media outlet Iraqi News Agency (INA), the Central Bank will sell the dinar to the country’s finance ministry at 1,450 Iraqi dinars per US dollar. The public will be able to purchase the dinar at 1,470 Iraqi dinars, and other banks at 1,460 Iraqi dinars. Influential Shiite cleric Muqtada al-Sadr voiced his skepticism of the measure’s ability to alleviate public suffering. “The Central Bank and all other banks are prisoners of corruption and corruptors. The government and parliament must seek specialized methods to end this and liberalize it immediately. It is not sufficient (to float the currency),” Sadr tweeted. In alignment with the widespread backlash to the devaluation decision, the Iraqi parliament’s Economy and Investment committee announced the need for dollar prices to be returned to their previous level. “We, as members of the parliament believe that the exchange rate of dinar for dollar should be returned to 120,000 dinars per 100 dollars. or slightly more,” committee member Falah Khafaji told Iraqi state media on Monday. “This devaluation will effect the poor in the country, and they will be the people hurt by it the most.” On Monday evening, $100 cost approximately 136,000 dinars at money exchange offices in Erbil

Parliamentary Finance: It was more appropriate for the government to fight corruption instead of reducing the value of the dinar Political | 11:38 - 12/21/2020 https://www.mawazin.net/Details.aspx?jimare=135069 BAGHDAD - Mawazine News The Parliamentary Finance Committee confirmed, on Monday, that the weakness of the government is what pushed it to the recent measures, by reducing the value of the dinar and the negative effects that accompanied it. Committee member Jamal Cougar, in a statement to local agencies, said, "The weakness of the government is what pushed it to these options towards the weakest link, namely the employees and the private sector, instead of fighting corruption and corrupt people, returning smuggled money and restricting state resources to the government." "The downside of raising the dollar's price is the impact of the simple employee, who will lose more than 40 percent of his purchasing power and 22 percent of his salary allocations," Cougar said. Cougar explained, "When the price of the dinar falls against the dollar, the value of the employee's salary will differ from what it was when the $ 100 note was equivalent to 1119 dinars, and this matter leads to harm to the private sector that relies on the public sector indirectly, as well as confusing the market." Is happening now. " He added that, on the other hand, "one of the positives of raising the dollar exchange rate is to reduce the budget deficit from approximately 100 trillion to 60 trillion dinars, and this matter comes after increasing the dollar exchange rate, deducting employees, imposing benefits and collecting taxes." A member of the Parliamentary Finance Committee added that, "If the government did not go with these options, where would it come up with 100 trillion dinars," noting that, "the central bank’s reserve, excluding sovereign and other bonds, does not exceed $ 35 billion." He pointed out that "the government is seriously considering reducing the negative effects, by offering 3 billion dollars to the market in order to satisfy the market and not accumulating dollars in homes, and initiatives to support the vulnerable classes, and building nearly 1,000 schools with the support of the Central Bank." Ended 29 / p4