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Publishes a preliminary version of the 2021 budget: a change in the exchange rate and its revenues more than 91 trillion


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Baghdad Today publishes a preliminary version of the 2021 budget: a change in the exchange rate and its revenues more than 91 trillion

 

 

2,591 Policy 12/17/2020 10:55 Baghdad today -

Baghdad (Baghdad Today) is publishing a preliminary version of the Federal Budget Law for 2021, which it obtained from banking and economic circles. The expected revenues, according to the initial version, are more than 91 trillion dinars, while the deficit is more than 58 trillion dinars. According to the initial version, the government may raise the price of the dollar in the central bank to 145 thousand dinars per 100 dollars. (Baghdad Today) confirms, citing the sources from which I obtained the initial copy, that this copy is subject to modification and is not final. To view the link, click here

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This is how I see it.   If a have 5 million dinars stashed at home and I see in the news, radio, newspapers that the CBI is planning to devalue the dinar from 1190 to 1450, I will looking li

Yeah this is all a setup to scare the citizens into bringing ALL their dinar into the banks before a 25-30% devaluation period!! It’s actually pretty smart to do it this way even though it screws the

I have come to the conclusion that everyone who runs the country of Iraq, including the independent Central Bank, are a bunch of booger eating Morons. The dollar has hit its lowest price point in two

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Iraq to base 2021 budget on $42/bl oil price: Update

Adds detail on gas projects

Iraq expects to base its 2021 budget on an oil price of $42/bl, oil minister Ihsan Ismael said at today's Iraq Oil and Gas Show in Baghdad.

The council of ministers has yet to send the draft budget to parliament. But the price assumption is already more conservative than the $56/bl used for the 2019 budget, which was also based on exports of 3.88mn b/d. The 2019 budget also ramped up public spending.

Iraq has not approved a new budget for 2020. But it has suffered from production restrictions under the Opec+ agreement and low oil prices, with oil revenues so far this year proving insufficient to cover the cost of salaries and pensions. Last month, Iraq had to pass an emergency borrowing bill to cover deficit spending for the rest of 2020. It is also looking to reduce its reliance on oil revenues in the longer term.

Regarding Iraq's oil projects, Iraq's overlapping ministerial bureaucracy continues to delay the launch of the fifth licensing round, Ismael said. In April 2018, Baghdad awarded six oil and gas blocks with an aim of boosting gas supply.

There are also "workflow" delays at the 5.6 trillion ft³ (157bn m³) Akkas gas field near the Syrian border, Ismael said, but ministry aims to conclude a contract within the next six months. The field was awarded to South Korea's Kogas in 2011, but was seized by Islamist militants Isis during its occupation of northwestern Iraq. Investment interest in the field has been muted since 2017 when Iraqi forces regained control from Isis. The draw down of US troops in Iraq has increased concerns that Isis could regroup.

In May, finance minister Ali Allawi announced that an agreement had been reached with Saudi Arabia to allow Saudi companies to invest in the field.

And Basrah Gas Company (BGC), a joint venture between Shell, state-owned South Gas and Japan's Mitsubishi, plans to start up the first of two 200mn ft³/d (2.1bn m³/yr) natural gas liquids (NGL) plants by the end of 2022, Ismael said. The facilities will process associated gas the Rumaila, Zubair and West Qurna 1 oil fields.

In October, Ismael said BGC had reviewed a business plan to bring forward the construction date to 2023, from 2027 previously.

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2021 Draft Budget ... Surprises in the price of the dollar, fuel, and employee allocations
  
{Baghdad: Al Furat News} Our agency publishes a draft of the federal fiscal budget bill for 2021.

The budget included a surprising price in the dollar exchange, as the government suggested fixing it at 1450 dinars to one dollar.
It also included reducing the allocations granted to state employees.
According to the draft, the estimated revenues from exporting crude oil will be calculated on the basis of the rate of (42) dollars per barrel.
The draft budget for the year 2021 includes imposing a tax on gasoline and aviation fuel at a rate of 20%, and the price of a liter of gasoline will be 540 dinars instead of 450 dinars, and the price of kerosene increased by 15%.
A 10% sales tax will also be imposed on all commercial stores, cigarettes, cars, alcoholic beverages, and barber shops for men and women.
To view the text of the draft budget ... click here

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17 Dec 2020

Baghdad-Al-Sharqiya December 17: A leaked draft of the general Iraqi budget for the year 2021 showed an increase in the value of the financial deficit to 58 trillion and 260 billion and 763 million Iraqi dinars, with a financing gap of more than 35 trillion Iraqi dinars.

According to the draft of the project, the federal budget revenues are estimated at 91 trillion, 790 billion, 155 million and 429 thousand dinars, calculated on the basis of the average oil price of 42 dollars per barrel, at an export rate of 3 million and 250 thousand barrels per day, including 250 thousand barrels of oil from the Kurdistan region. According to the leaked draft, the dollar exchange rate against the Iraqi dinar has been fixed on the basis of 1450, which is two hundred and sixty dinars higher than the exchange rate established in the previous budget, as its price was 1190 dinars in previous budgets.

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57 minutes ago, GreedyDinar07 said:

Fixed at 1450? That is not an RV when it is at 1190 that is a devaluation if I am correct? I hope I am wrong! What in the hell is going on here?

Yep you are definitely right, that isn't an rv but that is just a profit taking for dollars speculators. the dinars devalue from 1190 to 1450. And this is a good news for dollars speculator, not dinar investor. Because dollar speculators will sell their dollars for dinars and take a profit from the spread ( 1450-1190=260 dinars/us dollars ). And when the rate rise from 1450 to 1190, then the dollar speculators will buy up as much dollars as possible, and then hide them under their mattress until the rate devalue again, let's say from 1190 to 1450, then the dollar speculators will sell their dollars for dinars for a profit taking. And this cycle goes on and on and on and never ends because when there is a supply , there is a demand. When The dinars devalue the rate today and increase the rate tomorrow or the next day, this is a good news for the dollar speculators/the big whales who hold a lot of dollars ( million or billion or even trillion dollars ) under their mattress , will get a huge profit in just one day. 

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I have come to the conclusion that everyone who runs the country of Iraq, including the independent Central Bank, are a bunch of booger eating Morons. The dollar has hit its lowest price point in two years and is sinking like a stone. Now The CBI wants to devalue their currency against a depreciating dollar? Thats a 18% decrease from where its at now.  When the dollar falls more, increase that loss of value.

Glad I bought a ton of XRP at .22, I wont be looking for any windfall from this venture anytime soon.

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10 minutes ago, kwg said:

People will be running to the bank to cash in their dinar into USD BRILLIANT!! Go RV!!!

When dinar devalue the rate and then increase the rate from 1450 to 1190, this is just a small increase=260 dinars/usd and i just call it a profit taking, not rv. When the rate increase to 1190 and the speculators buy up as much dollars as possible and they don't make a profit yet. But when the dinars devalue to 1450 and the speculators will sell their dollars for dinars and they take a huge profit. That's why only the dollar speculators who hold a lot if dollars will make a profit. And for the dinars investors who have hold dinars for almost 17 years don't make a profit at all at this moment in time, unless the iqd suddenly rv at least 1:1, then they definitely make a profit for sure. If the dinar rate increase from 1450 iqd to 1 iqd, and then the rate become us1:1iqd, then it is called rv and this is what we all have been waiting for almost 17 years.

 

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10 minutes ago, Laid Back said:

This is how I see it.

 

If a have 5 million dinars stashed at home and I see in the news, radio, newspapers that the CBI is planning to devalue the dinar from 1190 to 1450, I will looking like crazy to buy dollars to protect my saving from devaluation.

 

Fear of a devaluation will make people buy dollars

 

I’m starting to believe this could be a CBI strategy to increase financial inclusion and collect more 000 notes and reduce monetary mass

 

 

Dollarization.... RV...... Dedollarization

 

Go RV

Go $1:1

Go 2021

Didn’t Kuwait do the exact same thing and then the next day RV’d their currency?? Correct me if I am wrong please! 

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9 minutes ago, Jaygo said:

Didn’t Kuwait do the exact same thing and then the next day RV’d their currency?? Correct me if I am wrong please! 

May i ask you, did you buy kuwait before? How long did you hold your kuwait until it revalued? And how many times did kuwait revalue? At what was the first rate when the kuwait revalue?

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32 minutes ago, Laid Back said:

This is how I see it.

 

If a have 5 million dinars stashed at home and I see in the news, radio, newspapers that the CBI is planning to devalue the dinar from 1190 to 1450, I will looking like crazy to buy dollars to protect my saving from devaluation.

 

Fear of a devaluation will make people buy dollars

 

I’m starting to believe this could be a CBI strategy to increase financial inclusion and collect more 000 notes and reduce monetary mass

 

 

Dollarization.... RV...... Dedollarization

 

Go RV

Go $1:1

Go 2021

Exactly correct IMO

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Iraq is spreading misinformation again.  I guess they have a lack of daytime Soap Opera's to watch, so they create their own drama....Nothing to see here!!  :drunk:

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30 minutes ago, rvmydinar said:

May i ask you, did you buy kuwait before? How long did you hold your kuwait until it revalued? And how many times did kuwait revalue? At what was the first rate when the kuwait revalue?

Never had Kuwait. Just a question. 

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Governmental resentment” at the “2021 budget leakage”: it will be subject to amendment within two days!

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Yes Iraq - Baghdad

 

Today, Thursday, December 17, 2020, the Ministry of Finance expressed its resentment and deep regret over the unauthorized publication of the draft budget for 2021.

A statement by the ministry stated: The preparation of the budget is a complex technical process that includes many ministries, government institutions and international agencies concerned with the budget over a long period of time and cannot be fully understood without referring to the data, policies and strategies on which it is based, including the government white paper.

He added: Releasing it prematurely to the media is an irresponsible act to a large extent, and this may precede the possibility of ministers in commenting neutrally on the draft budget and amending it in a special budget session scheduled to be held next Saturday.

He continued: Therefore, we ask everyone not to pay heed to the exciting statements related to the budget that may arise during the next two days.

The ministry stated in a statement that the Council of Ministers will discuss the budget in detail, which is the appropriate place to present its recommendations regarding it. Then, after approval, the budget is sent by the Council of Ministers, to the House of Representatives. This is the correct approach and framework for discussion and deliberation regarding the budget, not social media, which may be full of inaccurate news.

On Thursday (December 17, 2020), the Yes Iraq platform obtained a “preliminary copy” of the draft federal budget bill for the year 2021, which included setting the dollar exchange rate at 1450, and reducing employee allocations.

The bill included setting the exchange rate of the dollar on the basis of 1450, equivalent to 145,000 dollars per 100 dollars, and restricting all actually generated revenues as final revenues for the account of the state treasury.

The budget stated that the number of state employees is 3.25 million, including (682 thousand employees in the Kurdistan region), salaries 41.5 trillion dinars, other salaries 6 trillion, retirement 20 trillion, social security 9.6 trillion, interest on debt loans 4,6 Trillions, offshore loan payments: 6.8 trillion.

The project also included the reduction of all allocations granted to employees of all government departments financed centrally and independently, according to the percentages specified against each of them and granted to them by virtue of laws in force and decisions of the Council of Ministers and came as follows:

(Risk allowances 50%, hospitality 20%, exceptional 20%, sustenance 33%, certificate 50%, lump sum, 40%, special 60%, university service 60%).

The bill also stipulated raising the price of fuel (gasoline) from 450 dinars per liter to 540 dinars per liter.

The budget authorizes the Minister of Finance to fill the actual deficit in the budget according to the amounts indicated in the sources mentioned below:

1- Issuing treasury transfers, 2- Issuing national bonds to the public, 3- Issuing bonds and treasury transfers to government banks, to be debited with the Central Bank of Iraq, 4- Loans from commercial banks, 5- Issuing foreign bonds, 6- Borrowing from international financial institutions, 7- Borrowing with the guarantee of international export guarantee institutions.

The budget indicates that all loans, bonds, transfers and project contracts financed by loans will be exempt from taxes and customs fees for ongoing and new projects, including the loan granted by the World Bank to the Ministry of Finance for the PFM contract project for the years 2016, 2017, 2018 and 2019.

The 2021 budget obliged federal ministries and entities not associated with a ministry and all governorates to cover their needs of local products, including private sector products that have an added value of more than (20%).

The draft budget concluded that the Council of Ministers may not issue any decisions that include granting an advance to any ministry or entity not linked to a ministry without having allocations for it in the general budget approved during the fiscal year.

The project included the suspension of all cabinet decisions and laws in force that allow the centralized state departments to dispose of the revenues collected through them for the purposes of operating expenses, and their revenues are transferred as final revenues for the account of the state's public treasury, including the state's public treasury's share of the profits of public companies and self-financed bodies and departments.

The fiscal deficit in the budget reached (58260763114) one thousand dinars (fifty-eight trillion two hundred sixty billion seven hundred and sixty-three million one hundred and fourteen thousand dinars), and in the case of excluding all arrears, indebtedness, and foreign and domestic loans that will finance investment projects amounting to (23229017817) one thousand dinars (three Twenty trillion two hundred twenty-nine billion and seventeen million eight hundred and seventeen thousand dinars).

The indebtedness represented by the internal and external debt installments reached (14761959590) one thousand dinars (fourteen trillion seven hundred and sixty-one billion nine hundred and fifty-nine million five hundred and ninety thousand dinars)

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2 hours ago, Longtimelurker said:

I believe Kuwait said they were not going to reinstate their currency and then did the next day. Not sure if the devalued the day before.

possibly never read anything to cofirm, only know people that made money on it as they were in country in Ops and those that didnt because, and trust me they regret it

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Iraqis panic as leaked budget draft signals devaluation

By SAMYA KULLAB 32 minutes ago
 
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BAGHDAD (AP) — A leaked draft of Iraq’s state budget sent Iraqis into a panic on Thursday as it confirmed the government’s intentions to devalue the national currency, the Iraqi dinar, and cut salaries to cope with the impacts of a severe economic crisis.

Discussions about devaluating the Iraqi dinar, which has been pegged to the dollar for decades, have been going on for weeks as the government worked to finalized the 2021 budget. The draft law, which has to go through a parliament vote first, gives an anticipated exchange rate of 1,450 Iraqi dinars for the dollar — a significant drop from the central bank’s current official rate of around 1,182 dinars for $1.

 
As the draft made rounds on social media, the Finance Ministry expressed “resentment and deep regret over the unauthorized publication” of the proposed law, saying public hysteria would impact the neutrality of the lawmakers. The parliament is to discuss — and introduce possible amendments — to the draft in a session scheduled for Saturday.

Multiple officials said the leaked draft was authentic but stressed it might undergo changes in parliament. Sharp public reactions indicate the challenges the country will face implementing needed economic reforms in an election year, and in particular to the budget-draining public sector. Nationwide parliamentary elections, a year earlier than expected, are due in June.

“Budget preparation is a complex technical process ... over a long period of time,” the ministry said. “Releasing it prematurely to the media is a largely irresponsible act.”

Already, the value of the dinar is falling on the street, with exchange houses in Baghdad selling the dollar for 1,300 Iraqi dinars.

Public discussion over the government’s reform policy — dubbed the “white paper” — focused sharply on ways to bring the wage bill down from 25% of the GDP to 12%. The draft budget took a step in this direction by looking to cut salary benefits, which sometimes exceeds the base pay of many in Iraq’s bloated public sector. Benefits can include incidentals such as danger pay, higher education degrees and hospitality expenses for high-level officials.

The news prompted an outcry from government workers fearing serious cutbacks with the devaluation compounded with benefit reductions.

“The majority of Iraq’s work force are government employees. We are the middle class, but (the government’s latest) decisions are going to make us the poorest class,” said Ali Kadhim, 50, a teacher. “I am paying off two loans that take up a third of my salary. After these decisions I don’t know how much I am going to earn.”

 
Several public workers echoed his fears, including physicians, dentists, school teachers and administrators in various ministries.

Reformists in the government consider public wages unsustainable.

Facing a severe liquidity crisis brought on by spiraling oil prices, the crude-exporting Iraq has had to borrow from the central bank’s dollar reserves to pay the nearly $5 billion in monthly fees for public salaries and pensions. Oil revenues, which account for 90% of the budget, have brought in an average of $3.5 billion since the oil price crash earlier this year.

In an October interview, Finance Minister Ali Allawi said devaluation was being considered seriously in talks with the International Monetary Fund. The IMF has proposed a rate of 1,600 dinars to the dollar, which the Iraqi government deemed “politically difficult” according to a senior-level official, speaking on condition of anonymity to discuss the IMF talks.

The anticipated rate in the draft of 1,450 dinars against the dollar “will help cover the financial deficit, but, of course, if they don’t manage to make some supportive steps for poor people, then the impact of inflation will be very severe,” said Mohammed al-Daraji, a lawmaker in the finance committee.

Parliament must still approve the law, expected to be deeply unpopular. This month protesters in the northern province of Sulimaniya burned down government buildings over delayed salary payments.

But there is little choice, said the senior government official. Without these steps, Iraq’s foreign currency reserves would dip below $20 billion by next year, he said. They currently stand at $50 billion.

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