"Trade Imbalances" - Sun. AM KTFA Thoughts/News 3/17/19

by **Ssmith** Mon Mar 18, 2019 10:26 am

KTFA

Don961 » March 17th, 2019

Rohani fails to dispel Iraqi caution over sanctions

Monetary policy and raise the visa fees for Iranians

MilitiaMan » March 17th, 2019

There are some interesting things to think about in these two articles. One is on the assumption that 7 million Iranian's enter into Iraq during the busy religious tourist season that pay $20.00 fees each visa. They go one to talk about double the loss over time in the balance payments because of the decline in the Toman (1 Toman is 10 Rials.).

They further say that in the past they had evidence of $11 billion state budget and Iraq was worth $3.3 USD, while suggesting the present state budget is 450 billion (450 billion,what?) and the exchange rate of 1,189 IQD to 1 USD (Drop three zeros and that becomes $1.189 or $1.19 rounded, as they show on the ( https://www.cbi.iq/ ) site in the calculator where if you place 3000000 in the currency converter it shows millions..(Whereas other numbers show billions.)

Same for 3, 4, 5, 6 are in millions...7 etc. is in billions... When in millions equates to $1.19.. Interesting they are effectively are saying the same thing in the above exchange rate at $1189 (drop zeros), which is $1.19. The grey area is the 450 billion of what?

Well, if we read close they share that they lost double the economic (read value, imo). Thus, 11 losing half of it's value is 4.5 billion (ish) real close "" in the balance of payments or trade (BOT). Muddied waters? imo.

Educating the citizens? Translation is rough..We shall see. But, lets look further. ~ MM

"About 20 million Iranians enter Iraq every year to visit the holy shrines of Baghdad, Karbala, Najaf and Samarra. Baghdad requires each of them to pay about $ 80 for the entry fee only."

Now why would they charge 4x the amount for visas fees? To make up for the losses in the disparity of the drop in currency? Realize the Rial is x where as the black market xxx: ~ MM

1 USD = 41,994 IRR (official rate)

1 USD = ~112,000 IRR (black market rate)

Iranian Rial – is officially the lowest currency in the world.

The data supports what is coming out now between the sides. Washington and Tehran. Iraq can not afford to align with a hammered out currency. The sanctions, show that the disparity is massive. Apparently Tehran has nothing to offer, as so much as do many other countries in the region.

The trade imbalance is (per the above) at least a double or even 3x real close.

When, one country plays by one set of rules that are USA sensitive, whereas, the other not so?..Pressure is being applied. Lets not forget Mahdi's background in finance. Yep, his past goes to the core.. Back as far as the Paris Club.

More recent is this:

"Baghdad receives huge promises of investments and projects from Gulf states, particularly from Saudi Arabia, but that will not happen if the government of Abdul Mahdi chooses allegiance to Tehran and retains the influence of the militias."

They have this to say in another article ~ MM:

Groups such as Hezbollah, al-Najibah, Asaib Ahl al-Haq and others are built from within the Iraqi fabric. They may differ in their gains and interests, but they adhere to what the "leader" says as they describe the Iranian leader Ayatollah Ali Khamenei or the Qods Force Commander Major General Qasem Soleimani. For example, what the Iranian president or any other official in his government might say

However, this system is ultimately reflected in the interests of Iran's state directly or indirectly, as is the case today in light of the escalation of tension with the United States against the backdrop of the recent sanctions, and with Saudi Arabia at the regional level, and even inside Iraq when the emergence of trends contrary to Tehran many

The difference between the United States and Iran in Iraq was that the former made direct influence in the structure of the regime through its direct political and military presence, andbecause it was the de facto ruler of post-Saddam Iraq, which allowed it to penetrate the Iraqi bureaucracy and institutions of government and give it the upper hand in the decision-making process

The point looks to be that the USA has Iraq's PM and CB Governor on board (see articles),and Rohauni has his work cut out for himself, as noted by the disparity in exchange rates. Having lost the ability to be effective globally, Iran is seriously under pressure.

The data speaks for it self, not me attacking or judging.. It speaks for it self. The leaning of Iraq towards the money, is evident. They clearly look to be siding with Iraq's best interest while placating a very important balance with a neighbor to the north, yet side with the west for economic prosperity for the whole of Iraq.

Taking care of herself and her people is a smart move based in trade imbalances. imo !~ MM

"The Parliamentary Finance Committee on Saturday called on the federal government to take the American threats on the dealings of Baghdad and Tehran banking seriously, and not endanger the interests of Iraqis "for the sake of others."

Rashid added that "Iraq is in need of problems, whether with America or Iran, and therefore the federal government to take care of the interests of its citizens and not the interests of others, especially after the threats and warnings of America." Last week, the Iraqi and Iranian governments signed memorandums of understanding and various trade and economic agreements during Iranian President Hassan Rowhani's visit to Iraq, while experts say Iran sees Iraq as an economic "lung" to ease the effects of the US embargo.

Earlier on Saturday, US special envoy to Iran Brian Hawk warned Iraq against economic cooperation with Iran, which "uses Iraq as a claw in a major political game," while threatening that its sanctions against Tehran would include its financial collaborators.

"The United States controls more than 40 percent of the world economy and international financial institutions, and its warning to Iraq is clear on the lack of financial dealings with Iran," said Ahmed Hama Rashid, a member of the finance committee. "Baghdad should avoid, as far as it can, Some of the files that irritate Washington, and do not put the interests of Iraqis in danger. " link

https://en.wikipedia.org/wiki/Iranian_toman
https://www.cbi.iq/
https://www.investopedia.com/terms/b/bot.asp
https://fxssi.com/top-10-of-the-weakest-world-currencies-in-current-year

Samson » March 17th, 2019

Iran announces date of cancellation of visa fees to Iraq

17th March, 2019

The head of Iran's Hajj and Visit Organization Ali Reza Rashidiyan announced on Sunday the date for canceling the visa fees for Iraq

"It is hoped that the visa fees for Iraq will be canceled on April 5," the official IRNA news agency reported, quoting Rashidiyan. "The visas for travel between Iran and Iraq have not been canceled but visa fees have been canceled

"The visa fees for Iraq were two months ago 40 dollars and rose a month ago to 50 dollars," he said, adding that "it is hoped that we will see in the beginning of the second half of April 5 cancellation of visa fees

Iran has proposed to Iraq that visit visas be canceled, but the Iraqi side demanded that they stay. The two countries agreed to keep the visas, but they would be free of charge LINK