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After it was officially set at 1450 dinars to the dollar ... the Minister of Finance expects the exchange rate in the market


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https://shafaq.com/en/Economy/The-Iraqi-Central-bank-announces-the-adjustment-of-the-foreign-currency-exchange-rate

The Iraqi Central bank announces the adjustment of the foreign currency exchange rate

  •  
2020-12-19 08:38
 

Shafaq News / The Central Bank of Iraq announced that the foreign currency exchange rate will be adjusted to 145 thousand dinars for every 100 dollars.

 

The bank said in a statement, "during the last months of this year, intensive discussions took place with the Prime Minister, the Minister of Finance and the Legislative Authority, regarding the economic situation in general and the financial crisis that the public finances are going through due to the decline in oil prices and production, economic and health challenges."

 

 

The statement added, "The structural distortions in the Iraqi economy impoverished the public finances and restricted the ability of reform sought by the government and the Ministry of Finance. It is not a coincidence that the financial situation is this bad, nor is it the result of the current year or the previous year. However, unfortunately, rooted for more than a decade and a half because of Leading politics to the economy and prioritizing politicians' priorities over economic thinking and development, the rules of the relationship between economic policy on one hand and fiscal monetary policy on the other hand; Fiscal policy lagged in performing its roles."

 

 

The bank pointed out, "the subordination of the economic and financial policy to the aspirations and concerns of politicians, resulted in the last acceptable models of financial management in Iraq, and the role of that administration was limited to the distribution of oil resources to life-sustaining requirements such as salaries and operational requirements. The Ministry of Finance did not address its roles and leading position in economic affairs, because it lacked much economical and financial information. This calls for an effective approach to building economic and financial databases that facilitate decision-making and serve forecasts."

 

 

He continued, "Because of all these conditions, the central bank had no choice but to intervene on more than one occasion to support public finances and save critical public spending requirements. However, this does not mean that these interventions remain open without restrictions or endings."

 

 

"The Central Bank understands the difficulties facing the government's reform intentions, but this does not prevent it from mortgaging any steps that the monetary authority can take with effective steps to carry out reforms that affect the institutions of the financial authority, especially the effective collection institutions, customs and taxes, other public taxation institutions, and for spending to be leaned and rationalized, all of which depends on the political will of the supreme state institutions that support the direction of the financial authority to achieve this, and the government needs to support vulnerable groups that will inevitably be directly affected."

 

 

As by the statement, this change in the value of the Iraqi dinar will be one-time only and will not be repeated, and the Central Bank will defend this price and its stability with the support of its foreign reserves, which are still at solid levels, adding that the financial crisis that Iraq was exposed to due to the COVID-19 and the deterioration in oil prices and the decline in oil revenues, which led to a large deficit in the general budget and forcing the Ministry of Finance to borrow from banks and re-deduct them with the Central Bank in large sums, in order to pay Salaries and meeting other spending needs related to services provided to citizens Thee continuation of the current exchange rate has become a major obstacle to conducting real development and enhancing competitiveness for local production, which prompted the Central Bank to think about responding to the requirements of Funding the budget at an exchange rate that allows the provision of adequate resources to cover these needs and ensure the payment of salaries and critical requirements for government spending.

 

 

Based on the preceding, the Central Bank of Iraq decided to amend the foreign currency exchange rate to reach:

 

 

1450 dinars per dollar/ the purchase price of foreign currency from the Ministry of Finance

 

 

1460 dinars per dollar / selling price of foreign currency to banks

 

 

1470  dinars per dollar / the selling price of foreign currency to the public

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Speculators should learn how to do the math on these exchanges. Please let me help. The value of IQD was 1 USD = 1190 IQD, or 1 IQD was worth (1/1190)USD or $0.00084. As of today, the value of the din

The people will lynch every member of government if they don't reverse this move quickly.  They won't have to wait until June to vote them out.   Politicians, by nature, frown on this.  Ther

All I can say let it play out and see what happens. More to this then what ink on paper .. and Good Morning DV

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The head of the Parliamentary Economic and Investment Committee, Ahmed Al-Kinani, considered, on Saturday, that the Central Bank has nothing to do with changing the exchange rate, stressing that the Ministry of Finance owns the dollar and sets the price.

Al-Kinani said in an interview with Alsumaria News, "The Central Bank has nothing to do with changing the exchange rate, and the Ministry of Finance is the one who owns the commodity (the dollar) and it sets the price."
 
He added that "Article 3 of the Central Bank Law No. 56 of 2004 clearly indicates that the Central Bank is one of its duties to maintain the exchange rate after determining the sale value of the party that owns the dollar (the Ministry of Finance)."
 
 
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Central Bank Governor: We will double the sale of the dollar to exchange firms

22:05 - 12/19/2020
 
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Information / Baghdad

Central Bank Governor Mustafa Ghaleb Makheif confirmed, Saturday, that the bank will double the sale of dollars to exchange companies.

Mekhaif said in a televised statement that "the discreet precautions enable us to stabilize prices," noting that "exchange houses buy 50 thousand dollars, and we will double it to 100 thousand dollars."

He added, "The abundance of the dollar will make it stable in the market."

The central bank had decided earlier in the day, Saturday, to amend the foreign currency exchange rate, as follows:

1450 dinars per dollar is the purchase price of foreign currency from the Ministry of Finance.

1460 dinars per dollar the selling price of foreign currency to banks.

1470 dinars per dollar is the selling price of foreign currency to the public. 25 n

 
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In detail ... a previous Central Bank report warned of "devastating consequences" of the decision to lower the exchange rate

 
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The information / Baghdad ..

A report prepared by the Governor of the Central Bank of the former, on the Keywords, the large size of the damage it will suffer the Iraqi economy and Iraq in general , the impact of the decision to reduce the value of the Iraqi currency.

The report concludes, that the decision to reduce the value of the national currency will lead to a further reduction in the unstable conditions that Iraq is going through , which confuses market conditions and increases the demand for foreign currency.

And he warned of "inflationary pressures that the Iraqi citizen bear most of the negative effects, as a result of the decline in the citizens' purchasing power."

 

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Deputy: The decision to raise the price of the dollar took place because the government did not have a real economic policy

 
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Information / Special ...

The deputy of the Al-Fateh Alliance, Hamid Abbas, considered, on Saturday, the increase in the price of selling the dollar in the Iraqi market as a result of the absence of a real economic policy to save

Abbas said in a statement to "the information", that "the government's new financial policy will lead to major economic problems and will lead the country to an abyss."

He added that "the government is trying to find quick solutions to the economic crisis by raising the price of the dollar because it does not have a real economic policy," noting that "the central bank has pumped more than 240 million dollars into the market during the past two days."

And the Minister of Finance, Ali Allawi, announced today, Saturday. Raise the exchange rate of the dollar against the Iraqi dinar, stressing, "Stop all appointments in the next year’s budget.

The Minister of Finance announced, earlier Saturday. Raising the exchange rate of the dollar against the Iraqi dinar, confirming that all appointments will be stopped in the next year's budget

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Allawi: There is stability in the market after changing the dollar exchange rate
 
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Finance Minister Ali Abdul Amir Allawi "Internet"
 
 
arrow.gifhttps://economy-news.net/content.php?id=23206
 
 

Economy News - Baghdad

Finance Minister Ali Allawi said that Kurdistan's oil is sold on the global market for less than 7 dollars of oil exported from SOMO.

Allawi added, in an interview with local media, that we have reached an agreement with Kurdistan on the 2021 budget, and the delegation currently in attendance is discussing its allocations for 2020.

Allawi noted that there is stability in the market after changing the dollar's exchange rate, indicating that the demand for the dollar will not be high.

He indicated that people who travel to countries will not be affected, except for people who travel to Europe.

He stressed that he spoke with the heads of political blocs and the speaker of parliament about the 2021 budget, and there is no significant objection to the budget, indicating that the 2021 budget is reformist and fit to face economic challenges.

 
Number of bronzes 125   Date of addendum 12/19/2020
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Iraq's central bank devalues dinar by 22% amid public anger

Iraq's central bank says it will devalue the national currency, the Iraqi dinar, by over 20 percent in response to a severe liquidity crisis brought on by low oil prices

By
 SAMYA KULLAB Associated Press
December 19, 2020, 1:17 PM ET
4 min read
 

 

 

BAGHDAD -- Iraq's Central Bank on Saturday announced it will devalue the Iraqi dinar by over 20 percent in response to a severe liquidity crisis brought on by low oil prices, a measure that has sparked public outrage as the government struggles to cover its expenses.

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. 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 U.S. 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.

The devaluation raised the prospects of the dinar weakening further on the street. The rate has already risen to 1,400 IQD per U.S. dollar on Saturday, up from 1,300 IQD last week, at currency exchange agents.

“I stopped exchanging currency,” said Abo Abed, who works at a currency exchange in the Karrada neighborhood of the capital. He turned away a customer with a $100 bill, saying he could only sell at the old rate of 1,300 IQD. “Who knows, tomorrow it could be 1,800 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% of the budget, have brought in an average of $3.5 billion.

Efforts to introduce reforms have been met with opposition and to date, the government has been borrowing internally to foot state bills.

A devaluation would give oil-rich Iraq, which imports nearly all of its goods, more dinars in hand to make urgent payments. But setting a new rate has been a delicate balancing act to satisfy the government's needs for liquidity without impacting the average Iraqi.

The Finance Ministry is responsible to allocate salary payments to public workers, the largest working force in Iraq and among the most disgruntled by the new currency measures.

The bank justified the devaluation saying it was the product of “intense deliberations” with the prime minister, finance minister and lawmakers, and stressing the reduction in the dinar's value would be a one-time occurrence.

“It must be emphasized here that this change (reduction) in the value of the Iraqi dinar will be one-time only and will not be repeated,” the statement said. “The Central Bank will defend this price and its stability with the support of its foreign reserves,” which it maintained are still at stable levels.

The bank blamed poor economic policies over the last decade. It said it had “no choice but to intervene” as poor economic planning and fiscal policies from Iraqi politicians have reduced Iraq to a crude-exporting state with the bulk of state expenditures going toward paying a bloated public sector.

The devaluation drew the ire of public sector workers. Many fear a weakened dinar, as well as plans proposed in the budget to cut salaries and impose taxes, will amount to pay cuts.

While taking a step toward austerity, the proposed state budget for 2021 also calls for record spending projecting a deficit of nearly $40 billion. A Cabinet session to vote on the law was postponed to Sunday.

From there, it will be voted on by lawmakers, a challenging task as the cuts are considered wildly unpopular ahead of next year's nationwide elections.

“It will be very difficult (to pass),” said lawmaker Sarkawt Shamseddine. “In order to to convince MPs to vote for this big bill the government has to show it has other plans ... to increase revenues. That's the strategy.”

Prime Minister Mustafa al-Kadhimi called for early elections to take place one year earlier than scheduled on June 2021, in line with demands of anti-government protesters.

 

https://abcnews.go.com/amp/International/wireStory/iraqs-central-bank-devalues-dinar-22-amid-public-74819699

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9 minutes ago, WheresmyRV? said:

I think its time the people storm the green zone and take their country back, enough is enough. 

It’s already surrounded by military , they are well aware the citizens are going to go crazy , I’m figuring they can’t leave it devalued to long .... how long that is I don’t know 

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1 hour ago, rvmydinar said:

Actually i got number " 145 " was based on the article that i read. I don't make up number. Therefore, if the number " 145 " really means " 1450 ",  then it isn't my fault.

 

WOW!   How sensitive you are.  Nobody's blaming you for anything.

 

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34 minutes ago, keylime said:

I'm not too happy with it either

Why are you not happy with it?? You should be ecstatic with the news especially if you have read the many posts and threads on this today! HUGE HUGE HUGE NEWS!!!  Again the only reason possible for them to do this is to bring in as much dinar mattress money as they can right before the RV!! The CBI has never been able to get the citizens to do this before no matter what they have done. This move is meant to absolutely scare the citizens into exchanging their dinar for dollars before they do this, I bet the banks have been packed their the past couple of days!! You should also know that by dropping the rate by 22% will lead to increased inflation which will make it even worse for all the citizens that have been protesting and rioting! So do you think they will keep this rate very long?? The answer is No, they may only keep this rate for a few days up until I say On or before Jan 6th but preferably on Jan 1st! Everyone knows at 1190 that is grossly undervalued period for the wealth of this country so now they are going to make it even worse I say no way this is a play to get as much dinar off the streets right before they RV!!

Edited by Dinarrock
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1 hour ago, rvmydinar said:

If tomorrow, the rate is 1450 , then 1 iqd=0.69 us. Do you think , Is 0.69 us just a fixed one time rv rate? Or will 0.69 us be a first time rate  and then there will be a second rate that is higher than the first rate, like a month later?

 

My guess is that the rate will be fixed at whatever it comes out at.  

 

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22 minutes ago, Dinarrock said:

Why are you not happy with it?? You should be ecstatic with the news especially if you have read the many posts and threads on this today! HUGE HUGE HUGE NEWS!!!  Again the only reason possible for them to do this is to bring in as much dinar mattress money as they can right before the RV!! The CBI has never been able to get the citizens to do this before no matter what they have done. This move is meant to absolutely scare the citizens into exchanging their dinar for dollars before they do this, I bet the banks have been packed their the past couple of days!! You should also know that by dropping the rate by 22% will lead to increased inflation which will make it even worse for all the citizens that have been protesting and rioting! So do you think they will keep this rate very long?? The answer is No, they may only keep this rate for a few days up until I say On or before Jan 6th but preferably on Jan 1st! Everyone knows at 1190 that is grossly undervalued period for the wealth of this country so now they are going to make it even worse I say no way this is a play to get as much dinar off the streets right before they RV!!

 

There ya go! 

You said it better than I ever could.  

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49 minutes ago, WheresmyRV? said:

I think its time the people storm the green zone and take their country back, enough is enough. 

I agree.  We should do that here in America as well, storm DC and take it back from China.

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A stifling crisis looming in Baghdad ... Deployment of forces and a session to reduce the value of the dinar

Posted 5 hours ago
iraqakhbar
News source / Mawazine News
1219122020_101494.jpg
Mawazine News
News source / Mawazine News


Political
|  
03:55 - 12/19/2020

Baghdad - Mawazine
News
The
Iraqi Ministry of Interior published , on Saturday, the policing forces in the center of the capital, Baghdad, coinciding with the government holding a session to discuss the
proposal to reduce the value of the dinar against the US dollar.
The
media office of the Order of the Preservation Forces (affiliated with the Ministry of the Interior) did not clarify, in a brief statement, the reasons for the
security mobilization , but the captain in the Iraqi police in Baghdad, Ahmed Khalaf, told Anadolu Agency that the matter is
related to measures to prevent any attacks that affect the Central Bank following a possible decline in the exchange rate of the
Iraqi dinar in front of Dollar.
Khalaf added that
riot police were deployed this morning in front of important institutions in Baghdad, especially the
Iraqi Central Bank building in central Baghdad, for fear of protests against the devaluation of the Iraqi dinar
against the dollar.
After the Iraqis faced a
year full of economic challenges, fears are increasing that things will get worse, after the presentation of a draft
budget for 2021 that focuses on austerity, which could expose Iraqis to greater pressure next year. Iraqi
officials
who worked on preparing the bill say that their goal is to "withstand" after
an unprecedented financial crisis resulting from the emerging Corona virus pandemic and the collapse of oil prices, which Iraq relies
on sales to finance 90% of its budget. Baghdad
is expected to
end this turbulent year, with GDP growth shrinking by 11% and
the poverty rate rising to 40% of the country's 40 million people.
Coinciding with the
security alert , the Iraqi Council of Ministers will hold, on Saturday, an emergency session to discuss the draft budget law
Federal for 2021, according to a brief statement issued by the media office of Prime Minister Mustafa
Al-Kazemi.
The holding of the
special session comes hours after the Ministry of Finance announced the proposal to reduce the value of the dinar against the dollar
by 23%, in the 2021 budget.
The Central Bank of
Iraq sells one dollar through the currency sale window for 1182 dinars.

Finance Minister
Ali Allawi said, in a statement on Friday, that the 2021 budget (prepared by the Finance) adopted an exchange rate of
1450 dinars per dollar, because the previously approved exchange rate of 1182 dinars per dollar is
distorted and does not reflect the actual reality.
He explained that the
previous exchange rate hurt the Iraqi economy, because the high price of the dinar compared to the dollar "contributed
to the flow of goods from neighboring countries, which negatively affected the local product."
Allawi added that the
best solution to the difficult economic situation at present is the proposed exchange rate for the dollar,
because it allows Iraq to rebalance its economy against the background of a more competitive rate.
The Ministry of Finance prepared the
2021 budget and sent it to the government, which is currently studying it before adopting it and sending it to
Parliament for approval in the coming days.
Iraq suffers
from a major financial crisis that affected the overall economic situation in the country, which resulted from the decline
in oil prices in global markets due to the repercussions of the emerging Corona virus.
As a result of the
financial crisis , the Iraqi government was unable to pay the salaries of employees within the specified timings,
which caused popular protests. "We are trying to relieve pressure on the public sector wage bill, which is our biggest expense,"
an Iraqi official said
.
The
public sector embraces the largest number of employees in Iraq with about 4 million employees, in addition to 3 million
retirees and one million people receiving social care salaries.
The official said ,
"if we pay salaries to our employees in dinars , which is now worth less than about 25%, we can
undermine the fiscal deficit and the distribution of these funds more."

Public sector employees are outraged by the measure.
"Our salaries will be without any value," says Mohammed - a doctor in a ward designated for "Covid-19" patients in Baghdad, who refused to give his full name. State
employees were delayed in receiving
their salaries in October and November for a long time,
which led to a negative impact on their purchasing power and impatience.

The
Iraqi economic expert , Ali Al-Mawlawi, says that the devaluation of the currency - at a stage witnessing a recession in the global economy
- "may harm more than good."
“Yes, the
government is desperate and has no other options. But what worries me is that it will harm the poor more,

by reducing their purchasing power. ”Ended 29 / h

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Maliki's party comments on the devaluation of the dinar

  •  
 2020-12-19 14:44
 

Shafaq News / The Islamic Dawa Party led by Nuri al-Maliki said, on Saturday, that the Ministry of Finance and the Central Bank of Iraq had reduced the value of the Iraqi dinar that it would negatively affect employees, at a time when the Sairun Alliance bloc, which is close to the leader of the Sadrist movement, Muqtada al-Sadr, announced its intention to question the governor of the Central Bank.

 

The political office of the Islamic Dawa Party said in a statement received by Shafaq News, that "the procedures of the Ministry of Finance and the Central Bank to change the exchange rate of the Iraqi dinar against the dollar negatively affect employees, the poor and others," explaining that "this economic policy will not lead the country to safety, or The suffocating economic crisis that is now crushing several segments of society will be dissolved. "

 

He added, "It will result in imbalances at all levels, and the government should search for other means that are more effective and less harmful in dealing with the lack of revenues, reducing the budget deficit and resorting to continuous borrowing, and that experimenting with prosthetic solutions and adhering to a sterile approach is not feasible in approaching crises that threaten popular reactions. Angry. "

 

The office continued, "Emptying the pockets of citizens will not move the wheel of economic reform, and we realize that the country is going through difficult economic conditions for many reasons, but the correct way to deal with this crisis should be far from the economic impact on citizens."

 

The Dawa Party called on the ministers concerned with the economic and financial file to "assume their responsibilities and deal clearly with the crises facing the country, especially as the government's tasks are to provide a decent life for citizens and not prejudice the salaries of employees so that they are not a victim of bad management of economic files."

 

And he called for searching for "realistic exits to the current crisis commensurate with the situation of Iraq and the conditions of its people. From a position of responsibility, we call on the government and national political forces to cooperate and intensify their serious dialogue in order to support new paths to encircle the economic crisis and to cross this critical stage with minimal losses."

 

For his part, the head of the Sairun Alliance bloc, Sabah Al-Saadi, called in a statement by the Presidency of the Council to "continue the sessions of the House of Representatives and not raise them until after the New Year holidays, because this disrupts the parliament from performing its oversight role, especially with regard to the issue of the central bank and the collapse of the Iraqi currency."

 

Al-Saadi stressed, "The need for the sessions to continue and be devoted exclusively to the issue of the central bank, starting with the topic of (interrogating a governor of the central bank) and conducting a high-level and expanded investigation of a joint (investigative team) between the government and the House of Representatives to investigate the corruption of the currency auction in the Central Bank and corruption in other government banks such as al-Rasheed. Al-Rafidain, Iraqi Trade (TPI), the Agricultural, Industrial and Housing Bank, and Al-Saadi expressed his full readiness to be in this (investigation team).

 

Al-Saadi was surprised by the "procedures and prosthetic solutions that the government is undertaking to address the economic crisis and the accompanying collapse in the foreign currency exchange rate in the central bank since (the appointment of the new governor) and the inability to find exceptional solutions and suffice with slogans and media discourses from the government (so the jealousy is great) and the results are missing. ".

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Economists and MPs warn of "catastrophic" damage from the devaluation of the Iraqi dinar

 

 2020-12-19 06:54
 

Shafaq News / Economists and MPs warned, on Saturday, that raising the price of the dollar against the Iraqi dinar will increase poverty rates among Iraqis, indicating that it will cause "catastrophic" damage to the poor and low-income people.

A professor of political economy at the Iraqi University, Abdul Rahman al-Mashhadani, said in an interview with Shafaq News, that "raising the exchange rate to 1450 Iraqi dinars per dollar, while reducing salaries by 30% and raising the tax on the remaining salaries, would raise prices up to 20% if We knew that imported goods account for 85 to 90 percent. "

He adds that "the central bank will raise the price of selling the dollar more than the price it will buy, which is 1450 dinars, by ten to twenty points, and therefore the price in the markets will rise again and may reach 60%," stressing that "neither employees nor citizens can have the purchasing power." Keeping up with these market rises. "

Al-Mashhadani points out that "this rise would increase poverty to eight million people, according to the latest statistics of the Ministry of Planning, to more than 15 million people."

Al-Mashhadani pointed out that "raising the government to exchange the dollar will add nearly 16 trillion dinars to the budget, while the government can raise the price of oil in the budget by four dollars to add 4 trillion dinars, especially if we know that oil prices have now risen to more than 50 dollars with Reducing unnecessary expenditures instead of raising the dollar in this way. "

For his part, the head of the Iraqi Economic Center, Dergham Muhammad Ali, told Shafaq News, “Reducing salaries and the exchange rate of the dinar will raise prices and lead to a decrease in purchasing power, and thus will lead to higher rates of inflation, poverty and inflationary deflation that harms the market and seriously reduces job opportunities and thus leads to To the devastating depression of the Iraqi economy. "

He explained that "government banks will also be greatly affected by the demand for the withdrawal of dinar deposits, which will empty their coffers after the lack of confidence in the dinar."

Shafaq News Agency published, earlier today, the draft budget law for 2021, which included the exchange rate of the Iraqi dinar at 145 thousand dinars against 100 dollars. After that, the Kifah Stock Exchange recorded a rise in the dollar’s price, reaching 136,000 dinars, compared to $ 100.

Yesterday, Friday, the Parliamentary Finance Committee revealed a decision taken by the Central Bank to officially reduce the value of the Iraqi dinar against the dollar, starting next Sunday.

For his part, the deputy from Salah al-Din Governorate, Jasim Hussein al-Jabara, considered that the policy of the government and the Central Bank of Iraq is a "living blow" to the people and service projects in general.

Al-Jabara said in an interview with Shafaq News, that "the leaks of budget items to public opinion have generated great public anger and frustration that cannot be contained unless the financial policy that the government, the Ministry of Finance and the Central Bank intend to adopt, which includes raising the price of the dollar, which will cause damage and living disasters. "By the poor and the low-income bracket, in light of the large segments below and at the poverty line."

Al-Jabara asked, "What is the fate of previously transferred and unimplemented projects under implementation that the state contracted when the exchange rate was 120,000 Iraqis for $ 100, and how will it be dealt with in the event of raising the exchange rate to 145,000 Iraqis?"

The deputy warned of "major negative consequences that affect the Iraqi economy and the local market, and what will result from the rise in the prices of goods and foodstuffs after successive governments failed to provide the ration card items 17 years ago."

And Jabara added, "How will the fate of the segments covered by low-income social protection be, and what will happen to the earning classes who subsist on daily business to secure the subsistence of their families?"

He stressed that the government should "secure decent living and work opportunities for all of the people and not apply arbitrary laws," criticizing "holding the citizen responsible for failure to manage resources by exerting pressure on him again for a continuous 17 years of punishment."

In addition, the head of the National Approach bloc, Ammar Tohme, expressed "severe shock" from the circulated and leaked figures on the 2021 budget, which indicated an estimate of expenditures at 150 trillion dinars.

In a statement received by Shafaq News Agency, Tohme said, "If these leaks are true, they portend a real economic and social catastrophe, and we believe that such a number represents an exaggerated estimate to a large extent for several reasons."

And Tohme, "In light of the previous circumstances that witnessed explosive budgets, they depended on the price of oil, which reached nearly $ 100, and those budgets did not reach 75% of the estimates of this leaked budget."

He added, "The 2021 budget must rely on actual numbers as a basis for it, which is the actual spending of 2020 and the total spending for the first eight months was 46 trillion dinars, and we add to it what was allocated by the borrowing law 26 trillion dinars, so the total is 72 trillion dinars, and there may be a surplus of it as well."

"And according to estimates of revenues for the year 2021, the oil from them, depending on the price announced by the government, is 42 dollars," Tohme said.

He pointed out that, "with the addition of the outlets revenues, according to the statement of the Minister of Finance, to the (Guardian) newspaper, estimated at 5.9 trillion dinars, so the total is approximately more than 73 trillion dinars, excluding the rest of the non-oil revenues, and more than the region’s oil produced for the number fixed in the budget is 250 thousand barrels per day. And its other non-oil revenues, and this estimated amount alone covers the same spending that was actually spent for the past year without the budget incurring a deficit.

Tohme warned that "the adoption of the leaked budget, the exchange rate of 1450 dinars to the dollar, means actually reducing the salaries of employees by 18%, which means reducing part of the operational expenditures of what was spent in the year 2020."

And that "the leaked budget included a reduction of all the allocations granted to the employees of the central and self-financed departments of the state, at rates ranging from 20% to 60% of the varieties of those allocations, and this measure also means that it reduces operational expenditures from what they were in the 2020 budget."

Tohme added, "The leaked budget also included imposing new taxes, including a 20% tax on the sale of fuel."

The head of the Al-Nahj bloc said, "We affirm our position rejecting these very exaggerated estimates, and we reject measures that reduce the salaries of public employees or that burden low-income people. We believe that realistic solutions are the following measures."

He stressed the necessity of "squeezing expenditures, eliminating unnecessary ones, including petty cash, closing embassies in countries whose existence has no clear benefit, and reducing salaries of special ranks."

And he called for "collecting the revenues of oil derivatives for the local refineries that the government supplies with crude oil, which estimate the value of the product from one barrel at $ 150."

He stressed "the full collection of taxes and fees on mobile phones and banks benefiting from the currency auction, collecting customs revenues and subjecting all their transactions to electronic scrutiny (automation)."

Tohme called for "handing over all of the region's oil produced and all of its other imports to the federal authority, completing the biometric check on employees and eliminating hundreds of thousands of fake jobs."

He urged "the adoption of precise and resolute mechanisms for collecting fees and levies that reach the ministries, scheduling foreign debts, and postponing the payment of domestic debts and compensation for Kuwait."

He pointed out the importance of "canceling the licensing round contracts and the region's partnership contracts with foreign companies and finding an alternative formula to achieve the highest economic benefit for Iraq."

He added, "Government banks' interest should be raised to 10% to encourage citizens to deposit with the state and provide liquidity instead of paying interest to foreign companies and banks at a higher rate than this, and citizens are more likely to pay this interest."

Tohme stressed "the encouragement of the private sector, especially in building residential complexes to solve the housing crisis, employ the unemployed, move the economy wheel, and print one trillion dinars a month from the Iraqi currency."

Tohme concluded by stressing the need to "control the inflation caused by the currency auction by opening windows for sale to real imported citizens."

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A legal expert explains the constitutionality of the decision to change the currency and the right of Parliament to challenge it
 Time: 12/19/2020 23:33:04  Read: 5,795 times

A legal expert explains the constitutionality of the decision to change the currency and the right of Parliament to challenge it
 
{Baghdad: Al Furat News} The legal expert, Tariq Harb, explained that changing the exchange rate of the dollar against the Iraqi dinar in the Federal Budget Law for the next year 2021 is correct and does not violate the Federal Constitution.

Harb said in a press statement, "The Federal Constitution did not address this issue, and that the Central Bank Law dealt with the issue of cash, its value, and determining it according to its Law No. 56 of 2004, which was issued during the time of the civil governor Paul Bremer, which gave him his authority to set prices."
He pointed out that "raising the exchange rates of the dollar against the Iraqi dinar is not considered a legal or constitutional violation."
 Harb also stressed, "The Central Bank is an independent body, and the House of Representatives has no authority to challenge or intervene in determining the exchange rate of the dollar against the Iraqi dinar."
 And the Minister of Finance, Ali Abdul Amir Allawi, announced on Saturday that the exchange rate of the dollar would be raised to 1,450 dinars per dollar.
And the exchange rate markets recorded 1400 dinars per dollar, after the Minister of Finance’s statements regarding the government's and Parliament’s approach to raise the dollar’s exchange rate to 1450.
The Central Bank of Iraq officially announced the adjustment of the foreign currency exchange rate as follows:
1450 dinars per dollar The price of buying foreign currency from the Ministry of Finance
1460 dinars per dollar The selling price of foreign currency to banks
1470 dinars per dollar The price of selling foreign currency to the public.
Wafa Al-Fatlawi

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Allawi: The economy of Iraq will increase its effectiveness after the change in the price of the dollar
 
23374.jpg
Minister of Finance Ali Abdul Amir Allawi
  

 money and business


Economy News - Baghdad

The Minister of Finance, Ali Allawi, announced that the decision to change the exchange rate of the dollar against the dinar will be a one-time.

Allawi said in a press statement received by "Al-Eqtisad News", "It is no secret to the sons of our honorable people the size of the global economic crisis that resulted from the repercussions of the Corona pandemic and shook the economies of most countries of the world, and in our dear country Iraq, the financial crisis resulting from the sharp decline in oil revenues has also been linked. In the presence of structural imbalances in the Iraqi economy that were not seriously addressed and carried over from one stage to another. "

He added that on this basis it became clear to the eye the importance of urgent reforms in various economic fields and axes, including the currency exchange rate, although this decision is one of the difficult decisions, but we are obliged to take it because it addresses a large part of the crisis and to avoid similar situations that other countries have been exposed to, and to ensure protection The Iraqi economy, activating its activity, achieving a courageous reform leap and making real development with the aid and participation of all government, political forces, and economic and social actors.

He indicated that the decision to adjust the exchange rate will be one-time only and will not be repeated in the future, and the government, in addition to the Central Bank, will work to fix the new price that is in line with the reform requirements, while the government will work immediately to support the affected sectors and the poor segments through measures that include increasing social welfare allocations in the general budget. In order to compensate for the possible increase in the prices of some imported goods, we have also directed government banks to increase interest rates to encourage citizens to keep their savings in these banks and to benefit from the high interest provided to them.

He pointed out that adjusting the exchange rate is a political decision of the Iraqi leadership, and it is a decision that enjoys the support of political and parliamentary forces and economic actors that have participated with the government in lengthy discussions to reach it, in addition to the competent international bodies for this measure, including the International Monetary Fund, which promised to allocate large sums to face the repercussions of the pandemic on Vulnerable groups, which are an important part of the government reform program regarding aspects of reforms and economic development. The Ministry of Finance has also prepared a detailed paper on questions that may be asked about changing the exchange rate in the country.

He noted that the Iraqi economy will increase in effectiveness with the entry into force of economic reforms, and that the pessimistic false interpretations, some of which carry a political background to impede the reform movement and prevent a qualitative leap in the fields of industry, agriculture and development, are correct.

 

 

Number of observations 431   Date of addendum 12/19/2020
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The decision to raise the dollar begins to reap the parliamentary and legal objections .. The opportunity is a "ripe" to cancel the step: Will the project of raising the exchange be aborted?

2020-12-19
1603827641_1599381131_59de6c8f-fa3d-4ef1

Yes Iraq: Baghdad

Member of the Parliamentary Finance Committee, Ahmed Mazhar, confirmed that the Ministry of Finance is the one who owns the dollar and determines its price, not the Central Bank, and the leakage of the dollar’s price in the draft budget exposes the national currency to collapse.

Mazhar said in a statement, "It is the duty of the bank to maintain the exchange rate and not determine the price. Article 3 of the Central Bank Law No. 56 of 2004, as amended, clearly indicated its role in maintaining the exchange rate, not setting it."

Mazhar explained that “the price setting equation is governed by several rules, including that whoever owns the commodity determines its price,” in addition to other rules, in addition to the laws in effect, and because the Ministry of Finance is the party to which hard currency flows through its imports from the export of oil, it is its owner and it is "Whoever sells it to the bank to finance the budget."

 

Parliament is aiming at the government

For his part, a member of the Saeron Alliance, MP Salam al-Shammari, bore the government the repercussions of raising the dollar’s exchange rate on Iraqi markets.

Al-Shammari said in press statements, that raising the exchange rate of the dollar, the government bears its burden, given its negative repercussions on the file of high food prices and others, which means that Iraqis are affected, especially since unemployment and poverty rates are very high.

Al-Shammari added, "Members of Parliament are against raising the exchange rate of the US dollar, given the great burden it causes on citizens, and that they will have a position under the council’s dome in terms of returning the exchange rate to what it was during the past five years."

Al-Shammari pointed out that "the Ministry of Finance would not have made this step without the presence of a green light from the government, which should have been calculated because the country's situation is exceptional due to the financial and economic crises."

For his part, the legal expert, Ali Al-Tamimi, said that the rise in the dollar exchange rate to 1450 in the budget law violates the Iraqi constitution and the Charter of the International Covenant, and can be challenged.

 

 

Can the decision be appealed?

Al-Tamimi stated in an explanation given to “Yis Iraq”, that “raising the dollar exchange rate to 1450 violates articles 30 and 31 of the Iraqi constitution that require the state to provide a free and decent life and suitable income, and also this procedure violates Articles 23 and 26 of the International Covenant on Civil Rights. And political, which all countries of the world that are members of the United Nations Organization must abide by. ”

He added: “Also, the Central Bank Law, according to its Law No. 56 of 2004, is an independent body under Article 3 of this law and also the Central Bank’s instructions for the year 2017, and therefore it is the one that determines the exchange rate. Poverty read ”.

 

He pointed out that "this law can be challenged if it is legislated by Parliament before the Federal Court, and Parliament can not agree to legislate this law and return it to the government for an amendment because Parliament can do so constitutionally as it represents society

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Iraq Devalues Dinar to Push Economy Forward Ahead of Deficit

 

https://www.bnnbloomberg.ca/iraq-devalues-dinar-to-push-economy-forward-ahead-of-deficit-1.1538883

 

Khalid Al-Ansary, Bloomberg News

(Bloomberg) -- Iraq, which devalued its currency by about 20% against the dollar, said one main reason for the move was to push the economic cycle forward and activate private sector and local production to avoid a severe budget deficit, according to Finance Minister Ali Allawi.

The finance ministry, which controls the reserves from oil sales, will sell its dollars to the country’s central bank at an exchange rate of 1,450 dinar per dollar, which will in turn resell to local banks at 1,460 with a marginal benefit, Allawi said in a televised interview on the state-run Iraqiya channel.

Iraq devalued its currency by the most on record as the cash-strapped government faces an economic crisis brought about by low oil prices and crude-production cuts. The official rate was cut from about 1,190 previously, the first devaluation since 2003.

“What has been done is a preemptive step,” he said. Without the move, “a huge inflation will take place. We will hit the wall,” he added.

The country’s foreign reserves could be depleted in six to seven months if government expenditure stayed on the current trajectory without moving its exchange rate, the minister said. The budget deficit in 2021 could reach to 100 trillion dinars ($84 billion) without this step.Allawi stressed on the importance of the devaluation as a so-called reformative step, as Iraq’s domestic producers can’t compete with lower-cost imports, which have flooded the local market.

The world’s third-largest oil exporter is taking the steps to avoid depleting its foreign-currency reserves after the coronavirus sapped demand for energy and caused prices to collapse. The government last month sought upfront payments in exchange for a long-term crude-supply contract to help mitigate its dire financial situation.

The International Monetary Fund expects Iraq’s economy to shrink 12% this year, more than that of any other OPEC member under a production quota, and that its budget deficit will reach 22% of gross domestic product.

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Iraq devalues dinar as oil prices squeeze revenues

BAGHDAD (Reuters) - Iraq’s central bank increased the sale price of U.S. dollars to banks and currency exchanges to 1,460 dinars, from 1,182 dinars, seeking to compensate for a decline in oil revenue due to low crude prices, the bank said on Saturday.

 

The central bank of Iraq said the key reason behind the dinar’s devaluation was to close the gap of widened 2021 budget inflation after a collapse in global oil prices, a major source of Iraq’s financial resources.

“The financial crisis which Iraq suffered due to the coronavirus pandemic caused a decline in oil prices that caused decreasing oil revenues, altogether have caused a large deficit in the federal budget,” the central bank said in a statement.

The devaluation decision came as a preemptive move to prevent “draining Iraq’s foreign reserves” and help government to secure public servants’ salaries, the bank said.

 

Iraq depends on oil revenue for 95 percent of its income. The last devaluation was in December 2015 when it raised the sale price of U.S. dollars to 1,182 dinars from 1,166.

But in Iraq’s largely dollar-denominated economy, lowering the value of its dinar by a significant rate, which was the highest devaluation rate since 2003, would immediately raise the price of goods, hitting living standards.

Combined with other pending painful economic reforms by the government of Prime Minister Mustafa al-Kadhimi, this could lead to further unrest in a country where protests broke out on Oct. 1 last year and continued for several months, with hundreds of thousands of Iraqis demanding jobs, services and the removal of the ruling elite, which they said was corrupt.

 

Iraqi security forces and anti-riot police were deployed on Saturday near central bank headquarters, state banks and other financial offices in Baghdad in anticipation that protests could erupt after the central bank decision, said two security officials.

The OPEC member’s economy has only a small manufacturing base and almost all goods are dollar-priced imports, so a cheaper dinar would instantly make normal Iraqis feel poorer without providing any benefit to the wider economy via cheaper exports.

“Devaluation of the currency would self-inflict destructive repercussions on economy. It would be catastrophic,” said Qais Jawhar, a Baghdad-based economic professor.

Reporting by Hesham Abdul Khalek and Ahmed Rasheed; Writing by Ahmed Rasheed; Editing by William Maclean and David Evans

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