“Tidbits From TNT” Wednesday Morning 9-18-2024

EconomicsNews

Sep 18

TNT:

Tishwash: Is the decline in oil prices related to the rise in exchange rates? An "important" clarification from Al-Alaq

The Governor of the Central Bank of Iraq, Ali Al-Alaq, announced today, Wednesday, that all transfers are subject to auditing processes, while he indicated that the decline in oil prices has nothing to do with the rise in the exchange rate.

Al-Alaq told the official agency, which was followed by "Al-Eqtisad News", that "the Central Bank provides the dollar at the official price to all commercial and personal channels, travelers, and all types of operations that represent legitimate activities, operations, and requests."

He pointed out that "any price outside the country is a price that only indicates the existence of abnormal operations that attempt to deviate from the official and legal system and the correct fundamental channels," stressing the need to "focus on the amount of sales carried out by the Central Bank at the official price and those seeking the dollar, whether they are traders, importers, individuals or travelers."

He pointed out that "methods have been put in place for each channel to secure the provision of dollars on the one hand, and a very large degree of oversight to verify the integrity of the pre-operations before they are implemented," noting that "this is a major shift in foreign transfer operations, as they were previously audited at a later stage, and today all transfer operations are not carried out or implemented except after they are subject to the auditing process."

He explained that "the decline in the price of oil has nothing to do with the rise in the exchange rate because Iraq has foreign currency reserves that enable it to defend the exchange rate link

Tishwash: Qaani arrives in Baghdad and immediately meets with political leaders and armed factions

An informed political source reported on Tuesday that the commander of the Iranian Quds Force, Ismail Qaani, arrived in the Iraqi capital, Baghdad.

The source told Shafaq News Agency that Qaani, upon his arrival, engaged in holding "individual and collective" meetings with the leaders of the armed factions loyal to Iran.

The source explained that Qaani met with political leaders and factions, led by the head of the Badr Organization, Hadi al-Amiri, the Secretary-General of Asaib Ahl al-Haq, Qais Khazali, the commander of the Iraqi Hezbollah Brigades, Hussein al-Hamidawi, and others. link

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Tishwash: Parliamentary Finance Committee discusses proposal to establish sovereign fund

The Parliamentary Finance Committee announced, on Monday, discussing a proposal to establish a sovereign fund.

The media department of the House of Representatives stated in a statement, which was reviewed by "Al-Eqtisad News", that "the head of the Finance Committee, Atwan Al-Atwani, chaired a deliberative meeting of the committee in the presence of a number of its members, to discuss a number of important topics and files."

The statement added that "the meeting reviewed the outcomes and indicators of previous meetings with government agencies regarding maximizing non-oil revenues, where it was agreed on the next steps by submitting a detailed report to the government on the sources of deficiency, especially in the electricity, tax, customs and other major financial outlets sectors."

The statement continued, "The committee discussed a number of proposals that would maximize financial revenues, including the legislation of special laws on taxation, in addition to forming a committee to conform to standards, which would review the estimation of planned revenues for state institutions."

The statement continued, "The committee discussed a proposal to establish a (sovereign fund) similar to rentier countries, in order to confront fluctuations in global oil prices or any financial crisis, provided that the fund is financed from the budget surplus achieved in circumstances of economic and financial prosperity."

The statement concluded, "The meeting also discussed the laws referred to the Finance Committee as a supporting committee, where Al-Atwani stressed that the committee will have an opinion and a fundamental role in legislating these laws, especially those related to economic reform and others link

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Tishwash: Al-Nusairi identifies the challenges facing Iraqi private banks and opportunities for banking reform

Iraqi private banks suffer from many challenges and work obstacles, and face wide crises and risks due to economic instability due to the challenges of instability in the financial and monetary system, shortcomings in the investment environment, and deficits in the balance of payments and trade balance.

Iraq has eight government banks, and the structure of the Iraqi private banking sector consists of 32 Islamic banks and 28 commercial banks.

Advisor to the Iraqi Private Banks Association, Samir Al-Nusairi, told Al-Eqtisad News, "The number of private bank branches is about 500 branches inside and outside Iraq, and they have expanded and developed technically according to modern electronic banking systems."

Al-Nusairi pointed out that the private banking sector in Iraq faces operational challenges in addition to those mentioned above, most notably the US sanctions and restrictions imposed on 51% of the total private banking sector in Iraq and the prevention of 28 of them from using the US dollar in banking transactions, which affected their local and international activities and harmed the national economy.

He explained that the most important obstacles facing banks currently are technical, financial and administrative, especially in the procedures, instructions and decisions of digital transformation, which requires providing full support for this transformation process and using electronic payment tools in government, mixed and private institutions, and setting a time frame for the complete transition from the use of paper money to electronic payment.

He added that the private banking sector suffers from the differentiation between it and the government banking sector, as government banks account for 87% of total deposits and 78% of total assets, and it also suffers from weak activity and low liquidity, deposits, revenues and profitability in most banks, especially the 32 banks that have been subject to sanctions and restrictions, in addition to the decline in the shares of most banks in the trading market in the Iraq Stock Exchange.

Al-Nusairi added that private banks also suffer from double taxation, as the Tax Department in the Kurdistan Region of Iraq, for example, imposes on the branches of private banks in the region (their number exceeds 70 branches) to pay the annual tax, while these banks, according to the current Federal Tax Authority Law, pay the same tax centrally in Baghdad.

Al-Nusairi stressed the necessity for the Iraqi Council of Ministers to resolve the issue in the region and put an end to double taxation, and for tax collection to be centralized according to the law and for the audited final accounts submitted to the General Tax Authority to be adopted as a basis for tax accounting.

The advisor to the Iraqi Private Banks Association called for "implementing the seven decisions issued on 4/4/2024 in implementation of the directives of Prime Minister Mohammed Shia al-Sudani, which are related to supporting our private banks, which confirm the government's vision in its governmental program for financial and banking reform, as well as activating and accelerating the implementation of the agreements that were reached in the rounds of negotiations between the Central Bank and the US Treasury in Washington and Baghdad to lift US restrictions on the use of the US dollar."

He explained that "the Prime Minister's decisions supporting private banks outlined the executive procedures for comprehensive reform of the banking sector, which constitutes the basis and real beginning of the accomplished economic reform. These decisions included the following:

1- Preventing monopoly in banking services.

2- Activating the Central Bank’s financing initiatives.

3- Increasing cooperation between private banks and the Central Bank in discussing decision-making related to supporting and developing banking work.

4- Determining the contribution of foreign capital to Iraqi banks.

5- Participation of government institutions and financing funds with private banks and expansion by opening branches in countries.

Other.

6- Support from the government and the Central Bank to private banks in foreign institutions and banks.

7- Increasing reliance on private banks by the Iraqi state and activating the deposit of government deposits and government bank deposits with private banks.

Al-Nusairi stressed that implementing the decisions, which are practical applications to encourage private banks to develop their internal and external banking operations, will contribute to economic reform, pointing out “the importance of the Central Bank accelerating the procedures to rehabilitate and restructure these banks, as well as the necessity for the international auditing company to complete its agreed-upon work in order to lift the imposed restrictions and limitations.”

He concluded his speech by saying: "This file is certainly the focus of the government's interests, the Central Bank, the Iraqi Private Banks Association, and the banking sector in general. link

Mot: 23 out of 24 -- Noooo wonder my Body Aches!!! Siigghhhhhh