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[size=30]KTFA Members "News and Views" Wednesday Afternoon 6-29-2022[/size]
KTFA:Samson: "In a quiet fire" .. a surprising and important statement by the Prime Minister's advisor about changing the dollar exchange
{Economic: Al Furat News} The financial advisor to the Prime Minister, Mazhar Muhammad Salih, surprised the Iraqis about the possibility of changing and reducing the exchange rate of the dollar against the dinar.
Saleh said on the program “Al-Mastra” broadcast by Al-Furat satellite channel this evening: “We need to cook on a quiet fire and monitor prices until the end of 2022, oil prices and foreign reserves,” stressing that “a change in the exchange rate is possible, but it requires patience and careful study.”
He pointed out that “there are fixed facts on the ground.
The exchange rate of the dinar to the dollar follows stability, and it is not arbitrary, but rather a contract between the Central Bank of Iraq and the Ministry of Finance, because the foreign currency offer comes from the Ministry of Finance 100%, which is the only source for it in the country.”
Saleh added, “But the Central Bank deals in dollars to maintain cash reserves and prevent inflation, and the modern Iraqi financial history is witnessing cooperation in determining the dollar exchange rate between the Central Bank and the Ministry of Finance.”
He stressed that “the agreement with the Ministry of Finance to set the dollar exchange rate for a period of three years, but changing it became a surprise, and it is within the shock policy, and there are limits to the change in the dollar exchange rate, and it is not a political or populist issue.”
He noted that “the first limit according to commodity prices and the market, and at that time the central bank will defend the stability of prices according to the reserve, which is the highest in its history now, and we have an encouraging surplus for the end of the year from 8 to 10 percent.”
He stressed, “If prices and financial policies fail to defend the livelihood of the poor and social protection salaries, the Central Bank will intervene by raising the purchasing power of the Central Bank through its foreign reserves.”
“It is logical that the fiscal policy has a package to defend the livelihood, relieve the poor classes and social welfare, and compensate farmers for the differentials in grain prices, and the government maintains fuel prices and government services fixed, and this stability is a kind of support that rose to 15% of GDP.”
And regarding changing the dollar exchange rate, the Prime Minister’s advisor said: “Everything is possible, but we need patience in changing the dollar exchange rate in the event of high prices and the fiscal policy is unable and monetary policy is able to cover the dinar,” noting that “the Food Security Law if it cannot secure the requirements.” In the event of an increase in prices, the central bank will intervene to preserve the strength of the dinar against the dollar.”
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PhotoMan57: Could it be "just maybe" they come out at whatever rate (float) and monitor it and adjust as needed over a period of time.Just my train of thought
Tivon: Legally they can not come out at a "whatever price,. .86 is the lowest they can come out at according to Article 8 of the IMF Policy.
Again, Mazhar Muhammad shares his professional opinion as an advisor. It's not like he's campaigning against what Al-Kazemi has already requested of those 100 Deputies.
Think about they can easily come out an outright denounce or report that they will not change the rate until next year. Keep in mind Al-Kazemi just said today he wants the full force of the EFSL implemented.
The EFSL is only designed to serve as a placeholder for the budget for the remainder of 2022. They can still approve the budget even on the last week of December if they want while the the EFSL takes care the remaining five months of 2022.
They already said the 2022 budget (If Approved) will be exclusively for new projects. Everything that is in the EFSL was things that the 2021 Budget was supposed to take care of. One of them being raising the value of the Dinar.
Why would they go through all the trouble of approving the EFSL only to wait until the end of the year to utilize it when it's created to address urgent issues affecting the citizens now?
You should have paid more attention to the last line by Mazhar Muhammad. He said if the EFSL can not fulfill certain requirements the CBI will step in. So he is not against the law being implemented if push comes to shove. He was presenting a cautionary avenue they can take if they want to be 100% sure by just monitoring the markets to guage how it will behave to ensure a spike in prices doesn't damage all the planning that went into the reinstatement becoming a reality.
But guess what? You can't be 100% sure about something you haven't done in decades and are finally presented the opportunity to engage even if you have prepared meticulously.
Again, the EFSL is not created to go beyond 2022. So on a legal basis there is no wait and see pertaining to that law. And Al-Kazemi knows the law will or can not be entered into full force without reducing the USD exchange rate.
That's why he suggested at the earliest session to address the reduction. Also coming out at 1:1 is not a reduction in the USD. Its a parity price by bringing the IQD up from a program rate to match the USD.
I think Mazhar is referring to raising the IQD up from 1:1 to 3:1 is what he means by monitoring to see how the market behaves while the IQD/USD are of equal value. Then waiting until the end of 2022 to raise it beyond that is the precautionary measure he would rather take.
Think about it. He's not telling Al-Kazemi not to raise the IQD. He was only advising not to reduce the USD to much where the hard currency reserves can't cover the rate for the remainder of 2022.
So we have to ask ourselves. Are they concerned from the onset of 1:1 or 3:1 when it comes to the reduction of the USD? Can they raise the IQD at the expense of the value of the USD?
And regarding changing the dollar exchange rate, the Prime Minister’s advisor said: “Everything is possible, but we need patience in changing the dollar exchange rate in the event of high prices and the fiscal policy is unable and monetary policy is able to cover the dinar,” noting that “the Food Security Law if it cannot secure the requirements.” In the event of an increase in prices, the central bank will intervene to preserve the strength of the dinar against the dollar
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Lexi: You do a great job explaining things and I really appreciate your posts! -Wanted to speak up and thank you -You have made posts that I wanted to respond to, but I just smile and just think to myself...good job Tivon- IMO
Tivon: Thanks Lexi, I appreciate your feedback. I just share what makes sense to me. If it doesn't I wouldn't post anything. I started off just as clueless as the people who still are but continue to learn along the way from people who share information on pertinent issues. I have been doing this for a while so over the years I've come to know the much larger picture. Especially when you think about The BRICS Alliance. I remember Donald Trump stating at the UN General Assembly that the future is not globalism. And from what has been going since then I definitely see a return to a Constitutional Republic for most countries. IMO
Samson: A large sum of money was seized in the possession of a foreign passenger at Najaf Airport
06/29/2022 16:51:44
The fifth region border guards seized a large amount of money in the possession of a foreign passenger at Najaf International Airport.
A statement of the Ministry of the Interior, which the agency {Euphrates News} received a copy of, stated: "The detachments of the Komark police station at Najaf International Airport were able to seize a sum of money of 32 million and 500 thousand dinars that was in the possession of a foreign traveler."
He added, "The investigative papers and the accused were referred to the judiciary for violating the law of the Central Bank of Iraq." LINK
Ourcoin: Someone heading to Iraq getting ready to exchange? This is hilarious IMO
Tivon: There is no way he wasn't privy to the announcement made by Al-Kazemi in regards to changing the USD exchange rate some days ago. That would be the only reason I could think of as to the timing of his scheme. IMO
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Samson: A government advisor sets the date for sending the 2022-2023 budgets from the government to Parliament
29th June, 2022
The financial advisor to the Prime Minister, Mazhar Muhammad Salih, set, on Wednesday, the date for the government to send the general budget law for the year 2022 to Parliament.
Saleh told the official news agency, "If the legal situation is adapted to allow the executive authority to pass bills, it is very possible to present the 2022 budget, sequentially with the 2023 budget draft next October, provided that the first is approved before the fiscal year ends at the end of December 2022."
He added, "Next October, the draft budget law from the year 2022 will be submitted by the government to Parliament to the year 2023 according to the amended Federal Financial Management Law No. 6 of 2019". LINK
Tivon: Keep in mind what they need the 2022 Budget for. They don't need it for money. Simply because they are only willing to put an extra 25 trillion in the 2022 Budget.
More than Half of what is in the EFSL. So that should tell you they only want to approve the Budget for the Final Accounts. And the 2022/2023 Budget will be for new projects.
The EFSL is currently being used to pick up on stalled projects from the previous 2021 Budget. Why? Because that particular budget was supposed to raise the value of the IQD. But since they never formed a government last year they couldn't open it. IMO
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Clare: FROM WS & FRANK ON MONDAY'S CC:
WS WANTS YOU TO UNDERSTAND ... AS FAR AS THE BUDGET COMING OUT MAYBE IN OCT ... WS WANTS YOU TO REMEMBER THE RATE IS NOT WAITING ON THE BUDGET. THE BUDGET IS WAITING ON THE RATE. ......FRANK26
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