On Thursday, French President Emmanuel Macron praised what he described as the “European commitment” and “decisive action” of Christine Lagarde at the head of the European Central Bank, calling for preparations for her succession “in an organized and balanced manner with our European partners.”
Macron said, in a post on the “X” platform, that Lagarde’s march “reminds us that stability is never guaranteed, but rather is achieved through resolute action, a sense of responsibility towards the public interest, and confidence in our common future.”
The French President's statements came hours after Lagarde announced that she would leave office before the end of her term, on February 7.
The US Federal Reserve's preferred index for measuring inflation rose by 3.6 percent on an annual basis last September, according to what the Department of Commerce announced on Thursday, recording an increase compared to the previous month, at a time when the largest economy in the world is facing difficulty in containing persistent inflation at high levels.
The Ministry's Bureau of Economic Analysis said in a statement that the personal consumption expenditures price index rose by 3.6 percent, while the index, which excludes volatile food and energy prices, recorded an increase of 3.1 percent on an annual basis.
The data was included in the US government's preliminary report on gross domestic product in the third quarter, which showed that the economy grew at an annual rate of 3.4 percent during that period.
The US Central Bank follows price indicators for personal consumption expenditures, as part of its target for an inflation rate of 2 percent.
On Wednesday, the Federal Reserve kept the key interest rate within a range between 3.75 and 4 percent, while acknowledging that inflation “remains high.”
Federal Reserve Chairman Kevin Warsh told reporters, “The prices of energy and related commodities have risen again in recent weeks,” adding that the central bank’s mission is to ensure that relative changes in prices in some sectors do not spill over into the rest of the economy, and to maintain the stability of inflation expectations at their established levels.
The Fed Watch tool, affiliated with the CME Group, showed that financial markets were pricing in a probability of about 84.6 percent to raise interest rates next December.
The rise in prices inflated consumer spending figures during September. The Bureau of Economic Analysis said that consumer spending, which represents more than two-thirds of economic activity, rose by 0.5 percent last month, after an unrevised increase of 0.9 percent during August.
However, after accounting for the impact of inflation, consumer spending did not record any change during September, indicating that the economy entered the fourth quarter with weaker growth momentum. Spending increased by 3.8 percent during the quarter extending from July to September.
The Governor of the Central Bank of Iraq, Nizar Nasser Hussein, announced on Thursday that the gap between the official exchange rate of the dinar and its price in the parallel market had reduced to 9 percent, compared to about 24 percent previously, denying the validity of rumors about printing a new currency.
Hussein's statements came during a visit conducted by the Investment and Development Committee of the Iraqi House of Representatives to the Central Bank, to discuss the repercussions of changing the dollar exchange rate, its repercussions on economic and investment activity, and the challenges facing investors and local companies, according to a statement by the Council's Media Department reported by the Iraqi News Agency.
The governor confirmed that there were no operations to print currency, describing talk about that as inaccurate, while pointing out that the gap between the two exchange rates had declined to 9 percent, at a time when the country is facing increasing financial and economic pressures due to the repercussions of the Iran war and disruptions in oil exports.
In early October, the Central Bank of Iraq raised the price of selling the dollar to the public to 1,520 dinars, compared to about 1,320 dinars previously, in a move that led to a reduction in the value of the dinar by about 15 percent against the dollar, amid pressure on oil revenues and foreign exchange flows.
Iraqi public finances depend largely on oil revenues, which makes the disruption of exports and the decline in foreign currency inflows major factors in increasing pressure on the budget and the exchange market.
During the meeting, the Central Bank reviewed its measures to support the economy, including supporting government and private banks to provide soft loans to citizens, worth between 5 and 15 million Iraqi dinars.
For its part, the Investment and Development Committee stressed the need to limit the impact of the exchange rate on the costs of implementing investment projects, the prices of raw materials, and contractual obligations, in addition to its effects on market stability and the purchasing power of citizens.
The committee called for strengthening coordination between the Central Bank, government agencies, and the banking sector, facilitating bank financing procedures, and removing obstacles facing investors, in a way that helps ensure the continuity of projects and does not burden investors and citizens with additional burdens.
These developments come at a time when the Iraqi authorities are seeking to contain the repercussions of the war on the economy, amid pressure on oil exports and public finances. Iraq had requested financial support from the International Monetary Fund, while the Fund expected the Iraqi economy to contract by 16 percent during the current year, according to the estimates contained in the report.
