Update: Needed Laws
Iraq's parliament passed on Wednesday the 2016 budget. The President of the Republic is expected to ratify the budget in the next few days.
The budget consists of $88.2 billion, based on projected oil prices of $45 per barrel but in reality oil is averaging only $36 per barrel and so we can see they will have a deficit again.
There is also oil being pumped out of Kurkirk providence, revenue that Baghdad may never see since Kurdistan made a deal and is allowed to sell this oil on their own (new oil agreement). In return they only receive 13% oil revenue shares now from Baghdad. It is a better deal for all involved. So from this article it is obvious some HCL deal was made or else they never would have completed and passed the budget.
IRAQ'S PARLIAMENT ADOPTED WEDNESDAY A 2016 BUDGET OF $88.2 BILLION
Baghdad (AFP) - Iraq's parliament adopted Wednesday a 2016 budget of $88.2 billion, based on projected oil prices of $45 per barrel, according to a copy received by AFP.
The budget includes oil production the federal government does not now control and envisions a rise in oil prices, meaning revenue may fall short of projections.
Parliament speaker Salim al-Juburi announced that the budget had been approved, but did not provide further details. The 105.8 trillion dinars ($88.2 billion at the 1,200 dinars/dollar rate in use within Iraq) was little changed from the 106 trillion dinars the cabinet proposed last month. It projects a deficit of $20.1 billion (24.1 trillion dinars), but there are two significant factors that could undercut a projected $68.1 billion in revenue.
Firstly, it envisions oil exports of 3.6 million barrels per day, including a total of 550,000 bpd from Iraqi Kurdistan and Kirkuk province, a large part of which is under the autonomous region's control.
Kurdistan has been exporting oil independently and is likely to continue doing so barring a deal with Baghdad, meaning $9 billion in revenue may not materialize. The budget is also based on an oil price of $45 a barrel, a significant increase from Iraq's November average of $36.
And with the US Congress set to lift a four-decade ban on oil exports and the OPEC cartel deciding against cutting output, prices could remain low.
Iraq has been especially hard hit by low oil prices, which come as it wages a costly war against the Islamic State group that overran large parts of the country last year.
Next I want to bring to you news that has been a long standing debate for all you dinar investors looking for this RV. The question has always been this – Does the USA need to pass and support the IMF Reforms prior to any RV of the IQD currency? Was Iraq being held hostage over these reforms? We know the USA and the IMF must be in agreement over any RV for Iraq and can prevent the RV at will.
So now it really does not matter and is a moot point on its connection to the IQD RV since a compromise was negotiated with the IMF and the reforms will pass in USA congress anyway. So now even if it was a factor holding up the RV it no longer exists.
I have to say I find it funny how now this issue is just now resolved, when we are waiting for the distribution of the lower denominations to kick off the last part of this currency reform for Iraq. Is this timing coincidental? Something is holding back this last piece.
CONGRESS SET TO APPROVE IMF-GOVERNANCE OVERHAUL
Deal would give China, other emerging economies more power at emergency lender
An employee counts renminbi bank notes at a Bank of China branch in Changzhi. The U.S. appears set to ratify a deal that would give emerging markets such as China greater power at the International Monetary Fund.
By IAN TALLEY Dec. 16, 2015
WASHINGTON—U. S. lawmakers look set to ratify a five-year-old international deal to overhaul the governance of the International Monetary Fund that gives emerging markets such as China greater power at the emergency lender.
Lawmaker approval would resolve a long-running grievance by emerging powers that their voice and vote at the shareholder institution doesn’t represent their growing economic heft in the world.
Congressional leaders agreed early Wednesday morning to include the changes in a catch-all spending bill, which could become law in the coming days.
“We look forward to the outcome of the legislative process,” said IMF spokesman Gerry Rice.
U.S. lawmakers have stymied modernization of the fund’s shareholder governance for years, fomenting resentment among the IMF’s emerging-market membership.
The U.S. Treasury Department repeatedly warned that failure to ratify the deal would undermine U.S. leadership abroad due to disenfranchisement of China and other industrializing nations at the world’s last-chance lender.
Officials warned that recalcitrance by U.S. lawmakers could accelerate a move to other international financial institutions not backed by the U.S., such as the Asian Infrastructure Investment Bank, which was launched this year.
If Congress approves the governance changes as now expected, India, Brazil, Turkey and other countries will have more voting weight at the IMF in line with their contribution to the global economy. Under the governance overhaul, China’s new voting shares would make the world’s second-largest economy the third-biggest shareholder at the IMF, moving it ahead of several European nations.
The deal will also bulk up the IMF’s firepower, shifting emergency reserves borrowed from member countries during the financial crisis into the fund’s normal lending account. Critical to Washington, the U.S. would hold on to its veto power over most major decisions at the IMF.
So at this time is appears that the news is very quite coming from Iraq. We are at this lull again and this usually means something good is about to pop. It always does. Seems a clear, blue sky is about to come to us as the storm is about to pass.
We know they have to pass the National Guard law very soon. We know the Parties law was fully effective on Tuesday and we saw the Anti-Terrorist law now also fully implemented as it was posted in the gazette.
I described to you in a past news letter how the timing of these three new laws was very significant for establishing the needed security of Iraq for the RV. It was not coincidental on their timing and how it was managed. So there is one piece left to this puzzle and we wait for it. Will it come before the end of the year. I believe this past piece (the National Guard law) must be passed in parliament and ratified prior to the USA letting the RV go. Could this too be a reason for stalling the RV, as it seems now to be stalled for some reason.
We were told a month ago that they would revive the Customs & Tariffs and the implement a new Income Tax also in mid December. Still no word on this progress but we know there is pressure for both and articles over the last couple days told us this. We know they need a value to their currency for both of these efforts or they will fail. My personal feeling is that they were a bit premature in their timing of announcing these efforts I the past, thinking the RV would have certainly occurred by now. We probably will not see anything on these until after an announcement of an increased value to the lower denominations and maybe even after the revaluation of the currency.
We witnessed the very first meeting of the Federation Council (state Congress) over last weekend and its connection to the Reconciliation effort. We now see Saudis moving back into their embassy for the first time in 20 years and this is all good for the reconciliation effort.
Today we see in the passing of the 2016 budget compromises being made with Kurdistan in oil revenue sharing in return for holding on to full revenues of Kurkirk region oil, something I have talked to you many times would happen and was in the new oil law (amendment to HCL). This reflects to us this new oil law is a done deal or it would not be reflected in the budget and their budget would still be under negotiations and not already passed. But it is now passed and will be ratified shortly.
Update: Fighting ISIS
Kurdish forces backed by coalition air strikes have repulsed the most serious attack by Islamic State group in Iraq in five month.
Among the sites targeted by IS was Bashiqa, where Turkish forces have recently been training Iraqi Kurds, sparking a row with the Iraqi government.
Meanwhile at the UN the 15-member Security Council adopted a resolution aimed at starving IS of funds.
It urges countries to "move vigorously and decisively to cut the flow of funds" to IS, such as by preventing its smuggling of oil and antiquities.
One more item today:
Let’s not forget to keep praying for the success of THESE IRAQI AND COALITION SOLDIERS. I believe their success is in part some of the acceleration of the process we are now witnessing.
“Lord, protect Abadi and all who stand with him in righteousness, the Iraq and Coalition Soldiers who are fighting the good fight against terrorism, that they would be shielded from the enemy and would be Victorious against them! We ask that the Victory comes swiftly and healing of the Iraqi peoples and all whom have been effected by these evil doers can begin! Amen!
Till next time…. Auf Wiedersehen!
Peace and Luv To Ya All,