Iraq News Highlights and Points to Ponder Monday Evening 12-30-24

Observers: The Central Bank Claims The Success Of Its Monetary Policy Without Any Effect On Reality

Written by: social Baghdad  12-30-2024  The Central Bank claimed the success of its monetary policy in 2024, claiming that the four percent increase in deposits in operating banks is an indicator of the success of the monetary policy.

Observers believe that the Central Bank, which claims the success of its financial policy, must find a new outlet to feed the demand for the dollar without going through the foreign currency auction to eliminate the whales of corruption and preserve the bank’s foreign currency reserves,

stressing that developing the Iraqi stock market increases the absorption of individual savings and hoards and re-injecting them into development and investment projects,

pointing out that the lack of banking awareness and lack of interest in developing the sector contributed to creating a random monetary policy, pointing out that the Central Bank’s claims of the successes it has achieved have no effect on reality.  LINK

A “suspicious” scenario that needs answers: Iraq pays two million dollars a day to Turkmenistan for gas Consumed By Iran?

Posted on 2024-12-29 by sotaliraq  In late 2023, Iraq signed a memorandum of understanding with Turkmenistan to supply gas to Iraq, and in the middle of this year 2024, Iran and Turkmenistan signed a contract to supply Turkmen gas through a “bilateral barter” method for the benefit of Iraq, before Iraq returned after about 3 months to sign the official agreement with Turkmenistan to supply gas via Iran.

The “bilateral swap” is known as Turkmenistan exporting about 25 million cubic meters per day to the northern Iranian territories, which Iran is unable to deliver gas to, then giving Iraq equal quantities of its gas from nearby territories via pipelines, meaning that Iraq buys Turkmenistan’s gas and pays money to Turkmenistan in the amount of 20 to 25 million cubic meters per day and bypasses the issue of sanctions first, then Iran consumes this gas that Iraq paid money to Turkmenistan, in its northern provinces, in return giving Iraq equal quantities of gas from its fields close to Iraq via pipelines.

However, Iran’s continued cutting off of gas to Iraq under the pretext of maintenance and other reasons, without adhering to the contract signed with Iraq, has opened the door to questions and fears that Iraq has fallen victim to a “fraud.” Iraq is obligated to pay money to Turkmenistan for 25 million cubic meters per day, at a value of $2.5 million per day, or nearly $1 billion annually, but in return, Iraq does not impose conditions on Iran, as it seems, in the contract.

This is what economic researcher Ziad Al-Hashemi says, who pointed out that Iran has not only cut off gas to Iraq, but it is also consuming Turkmen gas, which Iraq pays for, and burning and consuming it in its northern provinces.

A dangerous scenario reveals the extent of the negotiating gap, with Iraq not announcing or disclosing the official terms of the contract with Iran or even Turkmenistan, while Alsumaria had previously prepared a report that raised a number of questions about this contract. (You can read it here)

The Al-Sumaria report at the time, which was published in July 2024, described this agreement as carrying many paradoxes, question marks and inquiries.

The first is that Iraq will buy Turkmen gas for Iran, meaning that it will pay its money to Turkmenistan but will never receive this gas. Rather, this gas will go to northern Iran. In return, Iran will give gas in the same quantities, perhaps to Iraq from its local gas at the same time.

Here, Iraq will pay the price of Iranian gas, but without handing over the money to Iran, but rather handing it over to Turkmenistan, which will bypass the issue of sanctions.

Other questions relate to the price of Turkmen gas. Will Iraq buy Turkmen gas at the same price as Iranian gas, or will it pay more money to Turkmenistan in exchange for the same Iranian gas it previously imported?

The third question is whether Iraq will bear the cost of the pipeline extending from Turkmenistan to Iran, considering that Iran does not need to establish this network and import Turkmen gas, but rather it took this step for the benefit of Iraq only, as it can suffice with its local gas and stop it from Iraq and use it for domestic consumption.

Iraq will buy gas that “will never enter its stations”.. Two benefits and 3 suspicious paradoxes of the Iran-Turkmenistan agreement

The third and serious question at the same time is: Will Iran deal with the gas coming from Turkmenistan, which Iraq pays for, as not being gas for exchange that Iran takes in exchange for giving Iraq part of its gas?

In other words, will Iran consider itself a “transit land” for Turkmen gas to Iraq, and thus take additional transit fees? Although this is not what will happen, as Turkmen gas will never reach Iraq, but will be exchanged, meaning that Iran will take it and give Iraq part of its local gas that it has been supplying to Iraq for years.  LINK

Economist: The Decrease In The Actual Value Of The Dinar Will Lead To Inflation

12/28/2024 - Economic expert, Munar Al-Abidi, confirmed that “the value of any currency is determined based on two basic factors: the amount of currency issued, which is the total cash pumped by the central bank, and the size of reserves, which includes foreign currencies, investments, and gold held by the central bank.”

Al-Obaidi said in a tweet seen by (Al-Masry - Today, Saturday), that “at the end of 2023, the amount of currency issued reached 101 trillion dinars, and the value of official reserves reached 145 trillion Iraqi dinars.”

He added, "As for the situation at the end of 2024, the amount of currency issued remained at the same level of 101 trillion Iraqi dinars, and the value of official reserves decreased to 139.7 trillion Iraqi dinars."

He pointed out that "the continued decline in the actual value of the dinar will lead at some point to an increase in inflation as a result of the decline in the strength of the dinar compared to reserves alone. All this while the average price of Iraqi oil was high, so how will things turn out in the event of a decline in oil prices?"

He continued, "The impact on the value of the Iraqi dinar, despite the stability of the issued monetary mass, the decrease in the value of official reserves by 5.3 trillion Iraqi dinars led to a decline in the purchasing power of the dinar, and as a result of this decrease in reserves, the actual value of the Iraqi dinar decreased by 5.3%."  https://almasra.iq/113717/