He described it as a "stupid step".. British report: The Iraqi government created a cash crisis by paying its debts to Iran in dinars
[You must be registered and logged in to see this image.]
2023-03-04 10:59
Share
Font
Shafaq News/ The British "Middle East Eye" website quoted, on Saturday, Iraqi officials as saying that Iraq exacerbated its financial crisis and contributed to the depreciation of its national currency, by paying its debts to Iran in the Iraqi dinar, which has been suffering for months against the dollar after imposing the Reserve Board The US Federal Reserve, the new restrictions on how the Central Bank of Iraq deals with oil revenue dollars.
The British report, translated by Shafaq News Agency, stated that a liquidity crisis appeared later, as the government failed to pay the salaries of millions of public sector employees, retirement benefits and benefits to beneficiaries of social welfare programs.
The report indicated that Iraq was one of the largest importers of Iranian goods during the past two decades, especially gas, electricity, foodstuffs and building materials, as the volume of trade exchange between the two countries amounted to about $14 billion.
US sanctions
And the report continued, because of the US sanctions imposed on Iran in 2018, Iraq faced difficulties in paying the financial dues owed to Iran between the years 2019-2021.
The report pointed out that Iran sometimes cut off electricity and gas supplies in the middle of the summer, to pressure Iraq to pay these debts, which amounted to more than $1.6 billion from gas and energy purchases alone between 2019 and 2021.
The report quoted informed sources as saying that most or all of this debt has been settled, with the final payment due in October 2022.
Iraqi dinar instead of the dollar
And the report continued that instead of the payments in dollars that Iran was receiving before the sanctions were imposed on it, Baghdad paid its debts in Iraqi dinars.
The report quoted Iraqi officials as saying that the new payment system was put in place in order to avoid anti-government demonstrations that would have erupted inevitably due to the reduction of electricity service in Iraq.
The report indicated that Iran was able to convert these dinars into dollars, through the use of the currency auction, which is supervised by the Central Bank of Iraq.
The report added that since last November, the US Federal Reserve, which retains the money Iraq earns from oil sales and transfers it to Baghdad, imposed new restrictions aimed at preventing Iran from accessing these dollars and combating money laundering.
The British website mentioned that it had previously indicated that parties, including sanctioned countries and criminals, had discovered new ways to obtain dollars, such as the black market and smuggling dollars through the Kurdistan Region.
Additional pressure on the dinar
Now, the report says that with Iran and others avoiding the exchange of dinars through the auction, Iraq has become unable to exchange its dollars for the dinars it needs to meet its needs, which put additional pressure on the dinar.
And after the report indicated that the price of the dinar on the black market rose last January, from 1480 dinars to 1700 dinars per dollar in October 2022, money changers were quoted as saying that these fluctuations are “terrifying,” explaining that there is great competition for The dollar with speculators willing to pay "any price."
At the same time, consumer prices continued to rise, the report added.
Reducing the price of the dollar
The report pointed out that the Iraqi government has taken a set of measures in order to control the exchange rate, including reducing the official rate to 1,300 dinars, and that despite the decrease in the price on the black market to about 1,500 dinars, it is still fluctuating sharply.
The report considered that the effects of Iran's handing over large sums of dinars while it - i.e. Tehran - is not able to trade in dollars, its effects are still felt.
The report quoted a senior Iraqi official as saying, "Paying the Iraqi debt to Iran in Iraqi dinars was not a calculated step. The financial crisis that we are suffering from at the present time is caused by this stupid step."
The Iraqi official wondered, "What do the decision-makers think about what Iran will do with these huge quantities of the Iraqi currency when it is in dire need of the US dollar? Would it have distributed them as gifts to the Iraqis, or would it have invested them in the Iraqi market?"
He added, "Their thinking was limited to achieving quick imaginary successes to prove that they are the most capable of dealing with the intractable problems of Iraq, and for this, they took us out of the well and threw us into the sea."
Money for food and medicine
In addition, the report indicated that Iraq officially spends about $900 million a month on importing Iranian goods, according to Iranian officials, and that 50% of that is in return for imports related to electricity and gas from Iran.
He added that Washington was aware of the unstable situation in Iraq, and that is why it exempted Iraq from its sanctions on Iran, but that from the first day, problems arose related to how to pay the purchase price.
He pointed out that the United States agreed to waive the sanctions only if Iraq deposited money in the Iraqi Trade Bank on the grounds that Iran would later use it to pay for food and medicine.
According to an Iraqi official, "This was not enough for Iran, as the account's movement is under American control."
And the report added that instead, Iran demanded another way to receive its money, and used threats to energy supplies as a means of pressure on Baghdad in order to obtain what it wanted.
After referring to the demonstrations of October 2019, and how the energy shortage turned into an existential crisis for the Iraqi authorities, and then the advent of Mustafa Al-Kazemi to head the government, the report said that Al-Kazemi sought to find quick solutions to the intractable problems that Iraq suffers from, including the debt issue. Iranian.
The report added that in April 2022, when the political vacuum prevailed after the October elections, the Sadrists proposed the emergency law to serve as a mini-budget, noting that the debts owed to Iran, which had accumulated since 2019, were one of the most pressing issues for the Al-Kazemi government in that. the time.
The report quoted one of Al-Kazemi's former advisors as saying that "Al-Sadr had to find a way out for his Al-Kazemi ally."
He continued, saying that at the same time, al-Sadr wanted to present "a gesture of goodwill to the Iranians to prove that his project does not target them and does not threaten their interests," noting that the emergency law allocated 4 trillion Iraqi dinars (about $3 billion) in order to pay off the external debt of the Ministry of Electricity. And debts for the purchase of gas and energy.
The report added that in June Parliament approved the law and the government began paying what it owes directly to the Iranians in dinars, and that the last payment was in October, according to what officials said. However, the exact amounts paid by the Al-Kazemi government to Iran in dinars were not disclosed, but it was not the first time that this happened.
Euro instead of dollars
The report indicated that in February 2019, the Central Bank of Iraq reached an agreement with the Central Bank of Iran, allowing customers of the two banks to open accounts in the two countries and conduct their banking transactions in dinars and euros, as the Central Bank of Iraq stated at the time that this was done in order to "remove Obstacles to paying Iraq's debts related to gas and electricity exports.
The report quoted an Iraqi politician close to Tehran as saying that Washington was expecting pressure on the Iraqi currency when it allowed Baghdad to pay dinars to Iran.
He continued, saying, "The Iranians are very smart and invest in every detail that serves their goals. They were clear from the beginning, and they said if you cannot pay in dollars, pay in dinars."
"It is not their problem if their American opponent is arrogant and treats others as helpless, and they will follow their own path," he added.
Translation: Shafak News Agency
[You must be registered and logged in to see this link.]
[You must be registered and logged in to see this image.]
2023-03-04 10:59
Share
Font
Shafaq News/ The British "Middle East Eye" website quoted, on Saturday, Iraqi officials as saying that Iraq exacerbated its financial crisis and contributed to the depreciation of its national currency, by paying its debts to Iran in the Iraqi dinar, which has been suffering for months against the dollar after imposing the Reserve Board The US Federal Reserve, the new restrictions on how the Central Bank of Iraq deals with oil revenue dollars.
The British report, translated by Shafaq News Agency, stated that a liquidity crisis appeared later, as the government failed to pay the salaries of millions of public sector employees, retirement benefits and benefits to beneficiaries of social welfare programs.
The report indicated that Iraq was one of the largest importers of Iranian goods during the past two decades, especially gas, electricity, foodstuffs and building materials, as the volume of trade exchange between the two countries amounted to about $14 billion.
US sanctions
And the report continued, because of the US sanctions imposed on Iran in 2018, Iraq faced difficulties in paying the financial dues owed to Iran between the years 2019-2021.
The report pointed out that Iran sometimes cut off electricity and gas supplies in the middle of the summer, to pressure Iraq to pay these debts, which amounted to more than $1.6 billion from gas and energy purchases alone between 2019 and 2021.
The report quoted informed sources as saying that most or all of this debt has been settled, with the final payment due in October 2022.
Iraqi dinar instead of the dollar
And the report continued that instead of the payments in dollars that Iran was receiving before the sanctions were imposed on it, Baghdad paid its debts in Iraqi dinars.
The report quoted Iraqi officials as saying that the new payment system was put in place in order to avoid anti-government demonstrations that would have erupted inevitably due to the reduction of electricity service in Iraq.
The report indicated that Iran was able to convert these dinars into dollars, through the use of the currency auction, which is supervised by the Central Bank of Iraq.
The report added that since last November, the US Federal Reserve, which retains the money Iraq earns from oil sales and transfers it to Baghdad, imposed new restrictions aimed at preventing Iran from accessing these dollars and combating money laundering.
The British website mentioned that it had previously indicated that parties, including sanctioned countries and criminals, had discovered new ways to obtain dollars, such as the black market and smuggling dollars through the Kurdistan Region.
Additional pressure on the dinar
Now, the report says that with Iran and others avoiding the exchange of dinars through the auction, Iraq has become unable to exchange its dollars for the dinars it needs to meet its needs, which put additional pressure on the dinar.
And after the report indicated that the price of the dinar on the black market rose last January, from 1480 dinars to 1700 dinars per dollar in October 2022, money changers were quoted as saying that these fluctuations are “terrifying,” explaining that there is great competition for The dollar with speculators willing to pay "any price."
At the same time, consumer prices continued to rise, the report added.
Reducing the price of the dollar
The report pointed out that the Iraqi government has taken a set of measures in order to control the exchange rate, including reducing the official rate to 1,300 dinars, and that despite the decrease in the price on the black market to about 1,500 dinars, it is still fluctuating sharply.
The report considered that the effects of Iran's handing over large sums of dinars while it - i.e. Tehran - is not able to trade in dollars, its effects are still felt.
The report quoted a senior Iraqi official as saying, "Paying the Iraqi debt to Iran in Iraqi dinars was not a calculated step. The financial crisis that we are suffering from at the present time is caused by this stupid step."
The Iraqi official wondered, "What do the decision-makers think about what Iran will do with these huge quantities of the Iraqi currency when it is in dire need of the US dollar? Would it have distributed them as gifts to the Iraqis, or would it have invested them in the Iraqi market?"
He added, "Their thinking was limited to achieving quick imaginary successes to prove that they are the most capable of dealing with the intractable problems of Iraq, and for this, they took us out of the well and threw us into the sea."
Money for food and medicine
In addition, the report indicated that Iraq officially spends about $900 million a month on importing Iranian goods, according to Iranian officials, and that 50% of that is in return for imports related to electricity and gas from Iran.
He added that Washington was aware of the unstable situation in Iraq, and that is why it exempted Iraq from its sanctions on Iran, but that from the first day, problems arose related to how to pay the purchase price.
He pointed out that the United States agreed to waive the sanctions only if Iraq deposited money in the Iraqi Trade Bank on the grounds that Iran would later use it to pay for food and medicine.
According to an Iraqi official, "This was not enough for Iran, as the account's movement is under American control."
And the report added that instead, Iran demanded another way to receive its money, and used threats to energy supplies as a means of pressure on Baghdad in order to obtain what it wanted.
After referring to the demonstrations of October 2019, and how the energy shortage turned into an existential crisis for the Iraqi authorities, and then the advent of Mustafa Al-Kazemi to head the government, the report said that Al-Kazemi sought to find quick solutions to the intractable problems that Iraq suffers from, including the debt issue. Iranian.
The report added that in April 2022, when the political vacuum prevailed after the October elections, the Sadrists proposed the emergency law to serve as a mini-budget, noting that the debts owed to Iran, which had accumulated since 2019, were one of the most pressing issues for the Al-Kazemi government in that. the time.
The report quoted one of Al-Kazemi's former advisors as saying that "Al-Sadr had to find a way out for his Al-Kazemi ally."
He continued, saying that at the same time, al-Sadr wanted to present "a gesture of goodwill to the Iranians to prove that his project does not target them and does not threaten their interests," noting that the emergency law allocated 4 trillion Iraqi dinars (about $3 billion) in order to pay off the external debt of the Ministry of Electricity. And debts for the purchase of gas and energy.
The report added that in June Parliament approved the law and the government began paying what it owes directly to the Iranians in dinars, and that the last payment was in October, according to what officials said. However, the exact amounts paid by the Al-Kazemi government to Iran in dinars were not disclosed, but it was not the first time that this happened.
Euro instead of dollars
The report indicated that in February 2019, the Central Bank of Iraq reached an agreement with the Central Bank of Iran, allowing customers of the two banks to open accounts in the two countries and conduct their banking transactions in dinars and euros, as the Central Bank of Iraq stated at the time that this was done in order to "remove Obstacles to paying Iraq's debts related to gas and electricity exports.
The report quoted an Iraqi politician close to Tehran as saying that Washington was expecting pressure on the Iraqi currency when it allowed Baghdad to pay dinars to Iran.
He continued, saying, "The Iranians are very smart and invest in every detail that serves their goals. They were clear from the beginning, and they said if you cannot pay in dollars, pay in dinars."
"It is not their problem if their American opponent is arrogant and treats others as helpless, and they will follow their own path," he added.
Translation: Shafak News Agency
[You must be registered and logged in to see this link.]
» utube 7/2/24 MM&C part 1 Iraqi DinarPart 1 - IQD Update - Progession of Intergr
» Iraq's Economy Under the Bullets: How Violence Affects Investment
» Behind the Shadow: Lobbies in America Want to Control Iraq... and Representative Arab: Attempts to Q
» The dollar in the parallel market.. Al-Sudani’s advisor presents a different vision and economic exp
» More than one billion dollars is the volume of trade exchange between Iraq and Brazil
» Two years to complete the project.. Japan continues $ 4.5 billion to build an oil refinery in Iraq
» Bloomberg Survey: OPEC Oil Production in June Stabilizes for Third Month, Here's Iraq's Position
» Chairman of the Securities Commission: The value of traded shares during the first half of 2024 amou
» After decades of neglect.. A government plan to revive Maysan factories
» Law: Maliki’s call for early elections “still stands”
» MP: Washington failed in 5 Iraqi files
» Oil clarifies regarding the employment of national workers in licensing round projects
» Interior Ministry gives citizens 6 months to register and sell their weapons: Life imprisonment awai
» US Ambassador visits Chief Justice
» The National Approach Parliamentary Party calls for the enactment of the Marshlands Law
» Electricity pledges to improve supplies by mid-month
» Prime Minister: We will not deviate from the mission of completing sovereignty
» Joint meeting to unify border crossing procedures
» "Strategic projects" between Iraq and Turkey in the water file
» Transportation: Five platforms nearing completion
» 3.5 million fiber optic lines to homes completed
» Oil companies.. global environmental standards and an absent law
» Rafidain Bank announces the implementation of the comprehensive banking system in the pharmacists’ b
» Iraqi-Pakistani agreement to develop agricultural cooperation in various fields
» "Under Strict Surveillance" Organized Crime Tracks Weapons Buying and Selling on Social Media
» "Public money" returns to the forefront and warnings against its exploitation for election propagand
» Massoud Barzani in Baghdad on Wednesday for the first time in 6 years.. What does he bring?
» 20 products in the first phase.. A three-year plan to revive Maysan factories
» Basra-Aqaba Pipeline.. American orders, Iraqi implementation, and Zionist benefit
» MP: We are waiting for the Foreign Ministry’s response to “Woltz’s” transgression, otherwise we will
» Parliamentary Integrity Commission reveals “routine procedures” that hinder the recovery of smuggled
» State Administration Coalition receives government program report: 68% implemented (video)
» An expert identifies three reasons for the return of the dollar’s rise and confirms: The solution
» Agriculture obliges livestock importers and butchers to set fixed meat prices
» London.. Mohammed Shukri represents the Prime Minister of the Kurdistan Regional Government at the (
» Health announces deduction rates for those covered by health insurance services
» Parliamentary Finance reveals the effects of the increase in oil prices and its difference in the 20
» Increase in sales of foreign remittances in the Central Bank of Iraq auction
» Barzani to visit Baghdad tomorrow, Wednesday
» Al-Sudani to Palestinian official: Iraq continues efforts to alleviate the suffering of civilians be
» Implementation of the comprehensive banking system of Rafidain Bank in 31 branches
» For the third month in a row, OPEC oil production remains stable
» MPs' opinions differ on the possibility of holding an extraordinary session to decide the position o
» What are the most important files that Massoud Barzani is scheduled to discuss in Baghdad tomorrow?
» Circumstances of “attacking the director of Al-Sha’la Municipality”: Brokers are outlaws, not citize
» The "exceptional" Turkish activity in the north is aided by Iraqi hands.. What is the story of the s
» Difficulty of amending employee salary scales.. What are the obstacles?
» "Baghdad Municipality is watching"... Merchants are violating the laws and taking over the sidewalks
» utube 6/26/24 MM&C IQD Update-Iraqi Dinar-2024 Budget Deficit is Hypothetical-
» MM&C 6/29/24 Dinar Explainer 1: Why Iraq has Two Exchange Rates
» MM&C 6/30/24 RK completes the first phase of the automation project and reveals its revenues within
» Minister of Labor directs preparation of a study on digital transformation within the ministry
» Minister of Labor directs review of controls for granting loans
» A government agreement to activate electronic payment in pharmacies and stores
» Parliamentary Finance reveals the effects of the oil price increase and its differences in the 2023
» The Service Council begins distributing holders of advanced and top diplomas
» Al-Emaar announces investment opportunities for residential cities soon in these governorates
» The Wasit government is discussing the Chinese Oasis Company's oil projects in the governorate
» Telecommunications announces the completion of 3.5 million FTTH fiber optic lines
» The truth about the "Syrian-Turkish" meeting in Baghdad.. What do the three parties benefit from?
» A deputy reveals the reasons for the increase in the number of “blacklisted wanted persons”
» Kurdistan delivers more than 70 billion dinars to the federal government in non-oil revenues for the
» Parliamentary Legal: Laws stalled in Parliament need political consensus
» A joint meeting between the governments of Baghdad and Erbil to unify border crossing procedures
» Al-Sudani: If it weren't for the strong ties, the different clans and figures wouldn't have joined t
» A new decision from the Central Bank regarding granting dollars to travelers
» Parliament is awaiting consensus to approve a package of laws
» Oil Exploration signs a contract to implement seismic surveys for the Khana oil patch with the Chine
» Al-Bajari: The government’s policies towards stopping local factories and laboratories are “shy”
» Joint meeting between the federal government and the region on mechanisms for unifying procedures at
» Al-Rasheed Bank announces raising the salaries of civilian and military retirees for the month of Ju
» Non-oil revenues... Kurdistan Region Finance deposits more than 70 billion dinars in the federal tre
» Minister of Environment: Infrastructure for environmental improvement is considered one of the gover
» The President of the Republic denounces the infringement on the independence of the Iraqi judiciary.
» Parliament considers the control of economic committees the reason for the failure of some ministrie
» Al-Sudani directs to settle expropriations along the development road path
» US Congressional Lobby: Kurdish alliances and the Iraqi opposition against Baghdad
» Al-Sudani emphasizes fortifying the state with the constitution and the law
» Popular Movement: The American Embassy obstructs Iraq’s accession to the Belt and Road Initiative
» Suleiman: There are no government solutions to stop Turkish violations
» State of law: There is no lawsuit against Al-Halbousi despite his conviction for forgery
» Basra Council intends to vote on the 2024 projects plan
» Deputy demands that public opinion be revealed about the importance of the Aqaba pipeline
» Al-Sudani emphasizes fortifying the state and its institutions and enhancing their effectiveness thr
» Economist: The Aqaba pipeline will cost Iraq $28 billion
» Türkiye: We have a strategic agreement on the water file with Iraq
» Iraq hosts a “Turkish-Syrian” meeting with Chinese and Iranian support
» Postponing the distribution of retirees’ salaries until tomorrow due to the bank holiday
» Good news for Iraqi retirees
» Iraqi citizens are surprised by the refusal of government banks to sell dollars to pilgrims
» Baghdad-Erbil dispute delays opening of Yazidi mass grave in Sinjar for 9 years
» A significant increase in foreign remittance sales at the Iraqi Central Auction
» The head of the Media Commission confirms Iraq's commitment to bridging the digital gap
» The Prime Minister's Advisor announces that Iraq has completed its integration steps by providing sa
» Minister of Interior inaugurates advanced color printing factory for national cards
» Most notably, "owning a sufficient number of cars".. Transport clarifies the controls for the work o
» "Joint Projects" Minister of Resources Explains Details of Water Talks with Turkish Side
» The service effort completes its work and opens the Al-Shumukh area in Baghdad