Friday, August 4, 2023

"THE CBI ISSUES A STATEMENT REGARDING DEALING IN USD AND THE EXCHANGE RATE", 4 AUGUST

 The Central Bank of Iraq issues a new statement regarding dealing in dollars and the exchange rate

2023-08-03 03:27
The Central Bank of Iraq issues a new statement regarding dealing in dollars and the exchange rateShafaq News/ The management of the Central Bank of Iraq considered, on Thursday, what is being traded in the markets of the exchange rate of the dollar against the dinar by speculators “illegitimate”, calling for the need for all parties to join hands to achieve stability in the exchange rate, especially that Iraq has sufficient foreign reserves to meet legitimate needs.
Shafaq News Agency publishes the text of the statement issued by the Central Bank administration:
Following up on the recent developments in the local markets, especially with regard to trading an unofficial exchange rate in the platforms and daily transactions and its unreal and artificial fluctuations, requires us to clarify the basic facts related to the trading of foreign currency (the US dollar) in the local markets, and the role of the Central Bank of Iraq in providing the currency foreign affairs through its official sources, which included all legally permitted transactions, and prevented other illegal transactions. And the need for all relevant parties to unite and cooperate in order to achieve the main general goals, including the stability of the exchange rate in light of the presence of sufficient foreign reserves to meet the legitimate needs of citizens, merchants and investors in foreign currency.
Hence, we would like to state the following:
The source of the US dollar circulating in the local markets is the Central Bank of Iraq, which offers it through banks, exchange and mediation companies, at the official rate (1320) dinars per dollar. Accordingly, what is called the “parallel market” has no reality, as this description is given when the market has its own sources of foreign currency, through private sector exports, local tourism, remittances from residents abroad, and others.
In order to achieve the goal of controlling the movement of funds and foreign trade, and in implementation of the Anti-Money Laundering and Terrorist Financing Law, and in order to enhance the application of international standards, the new system is based on:
The implementation of all foreign transfers and documentary credits through the electronic platform, in which all operations are pre-checked in all respects, and the final beneficiary is verified, which protects the banking sector, non-bank financial institutions and all parties to those operations from the risks they face locally and internationally. Legitimate transfers without limits or restrictions, and the Central Bank does not set ceilings for banks authorized to conduct the transfer. Rather, this depends on the bank’s ability to attract customers, the validity and accuracy of operations, and the number of its accredited correspondents abroad.
Carrying out personal transfers abroad, such as wages for studies, treatment, purchasing personal needs, residents’ transfers, pensions for residents abroad, and others, through international money transfer companies, such as “Western Union and Money Gram.” Citizens are also allowed to use electronic payment cards to be used to purchase goods and services abroad. All these operations and others are covered by the Central Bank at the official established exchange rate.
Providing cash dollars to travelers at the official rate set, through banks and exchange and mediation companies, and these operations are carried out through an electronic platform to verify the safety of operations, and the correct use of those amounts for traveling citizens. This platform is currently being developed with strict verification procedures and limiting its use to the specified purpose and at the prescribed price.
The aforementioned system, with its three dimensions, limits any practices that would expose Iraq and its banking sector and financial institutions to risks, and by providing these channels and opening them for legitimate purposes, it makes dealing in dollars outside it an illegal practice subject to legal accountability towards the parties involved in its practice, as no party has the right Or a person trading in dollars issued by the Central Bank, which determines a price, channels, limits, and purposes for its use, and its circulation and trading outside the licensed authorities is a prohibited activity according to the law, as Banking Law No. (94) of 2004 stipulates in Article (3) that no person has the right To engage in the business of receiving deposits, or other funds payable by the public, without obtaining a license or permit issued by the Central Bank of Iraq.
The application of the system of foreign transfers, documentary credits and cash sale of foreign currency involves achieving economic, regulatory and legal objectives, including the following:
Enhancing anti-money laundering and terrorist financing measures, and preventing the risks of local and international sanctions from all relevant parties.
Bringing Iraq’s imports into channels that ensure the safety and transparency of operations, and providing important databases and information for planning, organizing and control purposes.
Achieving additional revenues for the state by subjecting all imports to procedures for comprehensive registration of their details and the resulting fees.
Gaining the trust of accredited international banks, which expands the network of relations between the local and foreign banking sector, and increases the number of Iraqi bank correspondents.
Closing the outlets for illegal foreign transfers, besieging the proceeds of crime and corruption, and preventing them from finding a way to escape abroad.
Not charging imported goods the exchange rate difference resulting from paying a higher price when buying it at the unofficial price on the black market, which leads to higher prices and a negative impact on the purchasing power of citizens.
The groups that buy the dollar from the market and create an opportunity for speculators and beneficiaries to trade an unofficial exchange rate are:
Importers of merchants who do not follow the fundamental methods of external transfers (remittances and documentary credits) via the electronic platform, which is available to them at the official price, through attempts to collect cash dollars that are exclusively for citizens’ travel from the market, or by using electronic payment cards designated to pay citizens’ purchases and expenses abroad. , or for personal transfers for legitimate purposes.
Importers of prohibited or narcotic substances such as drug dealers and others, or of materials that do not pass through the official border crossings, to escape the requirements of the law or customs, such as importers of cigarettes and some importers of precision instruments, so they go to the market to buy dollars that are not allocated to them to pay their bills.
The category that generates revenues from the proceeds of crimes, such as bribes, thefts, kidnapping, extortion, selling contraband, etc., and they transfer them abroad to hide them.
Citizens who pay for their purchases of goods and services inside Iraq in dollars, which prompts them to buy dollars from the market, and since there is no allocation from the central bank’s sales of dollars for this purpose, their purchase is from a share allocated for other purposes, especially travel.
In order to address the aforementioned phenomena, and reduce the phenomenon of the illegal market, and an exchange rate higher than the prescribed one, work is being done with the government and the relevant authorities to take the following measures:
Merchants and importers use the prescribed channel for that, via the electronic platform, to achieve the objectives of this system and prevent the use of cash dollars in the market for other than its purposes, and this requires obligating this category to provide evidence that the amount of their imports has been duly transferred when their goods enter Iraq at the official border crossings.
Stimulating and supporting categories of merchants to enter the electronic platform by simplifying procedures, especially tax ones, defining their ceilings in advance according to categories, and depositing them in the account of the General Tax Authority through its bank accounts.
Tightening control over the official border crossings and closing unofficial ones, coordinating between the federal government and the regional government regarding the organization and unification of entry procedures for goods and the fees imposed on them, and preventing the entry of prohibited and legally prohibited materials.
The competent authorities undertake the strict application of Cabinet Resolution No. (23026) for the year 2023, which includes limiting the sale and purchase of goods and services in Iraqi dinars inside Iraq.
We call for the provision of official, popular, and media national support in implementing the aforementioned, to achieve the aforementioned goals, in a way that preserves the safety and soundness of the movement of money and foreign trade, and staves off risks for the country, its banking sector, and its financial institutions, by adhering to the rules of the Anti-Money Laundering and Terrorist Financing Law, and international standards and practices. related to.

The Central Bank Intends To Take New Measures To Ensure A Reduction In The Dollar Exchange Rate

 Aug 3 21:37  Information / Baghdad...Today, Thursday, the Central Bank identified three categories of exchange companies for selling dollars to travelers, and while revealing a proposal regarding the entry of imported goods through border crossings, it indicated that  there are new decisions that will be issued next week that may contribute to lowering the price of the dollar.

Deputy Governor Ammar Hamad Khalaf said in a statement to the official TV, followed by / information / that "the Central Bank provides exchange companies with weekly quotas of the dollar for the purpose of selling it to travelers at the official price and in limited quantities of 3 thousand dollars per traveler," indicating,

"These exchange companies are licensed through The Central Bank is in accordance with controls and is in compliance with the Anti-Money Laundering Law. 

He added, "One of the basic tasks of all exchange companies A, B, and mediation C is to provide dollars to travelers at the official rate and in the quantity specified by the Central Bank," noting,

"There is an electronic platform that the Central Bank has been working on developing since the beginning of this year, and all dollar sales to citizens are done." Through this platform that is closely monitored by the Central Bank.  And he stated,

“The Central Bank finances the market in dollars through this platform for categories of merchants and small traders and through exchange companies for travelers only.” And

Al-Rasheed through its outlets at airports, while exchange companies are specialized only in the process of selling dollars to travelers]. 

And he indicated that  "the Central Bank submitted a proposal to the ports and customs, which is that any goods entering Iraq must ensure that the merchant has financed these imports through the Central Bank of Iraq," pointing out,

"The printing of the Iraqi currency will not be random."

Regarding the increase in the monetary mass, Khalaf stressed that

"the process of increasing the monetary mass is directly linked to the process of increasing the foreign reserves owned by the Central Bank,

so any financing for the public treasury is through the exchange of dollars obtained from oil sales with dinars, and therefore any increase in the dinar mass comes mainly from foreign currency."".

And on the exchange rate, Khalaf confirmed that "the Central Bank issued several decisions related to the banking sector," explaining that

"other decisions will be issued next week, which may contribute significantly to reducing the exchange rate of the dollar." ended 25 n

https://almaalomah.me/news/economy/البنك-المركزي-يعتزم-اتخاذ-إجراءات-جديدة-لضمان-خفض-سعر-صرف-ال


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