The report issued by the International Monetary Fund’s mission for the current year 2024 for the Article IV consultations praised the Iraqi government’s measures, including the monetary policy led by the Central Bank of Iraq, and the report indicated that the Central Bank of Iraq has taken several measures aimed at stabilizing the national currency and controlling monetary inflation. He added that the central bank raised the interest rate on monetary policy instruments from 4% to 7.5% and increased the mandatory reserve requirements of banks from 15% to 18%, and these steps were crucial in reducing the inflationary pressures suffered by Iraq, and this contributed to the creation of a more stable economic environment.
The report stressed that important reforms in the banking sector such as the gradual increase in bank capital and mergers between small banks aim to strengthen the banking sector, increase its efficiency and flexibility in the face of economic shocks. The report noted that Iraq has implemented new compliance measures to improve the transparency of cross-border financial transactions, through the launch of an electronic platform that enforces the disclosure of financial beneficiaries, which enhances the integrity of financial transfers in line with international banking standards, as well as the role of the Central Bank of Iraq in expanding correspondent banking relations, to facilitate international trade financing operations more smoothly.
In 2016 Gold was right around $1,500 bucks a once and today it's running $2,300 to $2,400 bucks an ounce. They increased that gold supply by about 40 tons...Their currency reserves are around $110 billion. They have a massive amount of wealth. They have the ability to support their imports for about 16 months they say, which is about 5x what they need. That's important. They don't want to reduce those. They'd like to keep them on hand...Iraq has a good foundation for Alaq to do what he's supposed to do and it'll only get better if he does.
If they change the value of their currency they're going to have more surpluses...The oil price is about $70 in the 2023 budget. That hasn't changed for '24 or '25 because that's a tripartite budget. They got a surplus. Oil is somewhere around $80. It's been as high as $91ish. The expectations of oil is to be somewhere in the neighborhood of $80/$90 and they even talk about $100/barrel...Iraq is going to be sitting pretty good...They have phosphates...sulfur...natural gas...Those non-oil revenue streams...taxes and tariffs are going to come online...Iraq has a good foundation for Alaq to do what he's supposed to do.
Iraq is moving forward. They've got huge reserves...increased their gold, they're going to have the private sector, their stock exchange is going to be one to reckon with. It's an emerging market and a lot of money is going to be start flowing...
If they go on the Forex system it's going to be international. It's going to be fast and furious.
Could they do something within the county prior to that?
Sure, why not, educate the citizens, do what they got to do...
Question: People want to know if they can drag this out until next year?
Militia Man: We don’t know the timing. But, I don’t think we are even close to go that long. There is way too much going on in the world and this is not only about Iraq. Remember all boats rise with the tide...I believe Iraq is ready to go with the rest of the world. Along with other countries like the Vietnamese dong.
Are they going to change the value of their currency...?
I'm pretty sure they are going to need to to pay for all these [reconstruction] objects...rebar, the cement - all that stuff is expensive at 1310. It's not so expensive if it's back at a 'previous era'....If they have the true value, their real effective exchange rate, it's going to be far cheaper...
Iraq Is Turning To Digital Banks.. What Does It Offer To The Banking Sector?
Economy News – Baghdad The Iraqi banking system may soon receive banks of another type called (digital banks). What are these banks and will the citizen, the banking system, and the Iraqi economy benefit from them? Files that the beneficiary of the banking sector services in Iraq is trying to ask.
Financial expert Ziad Al-Hashimi says, “Online banks, also known as digital banks or neo-banks, are banking financial institutions that operate completely and exclusively over the Internet, and unlike traditional banks, where digital banks usually do not have physical branches.” In cities, they rely on providing their services on the website and mobile phone applications, and the banking services that citizens, merchants, and institutions need can be provided through phone applications.”
He continues, “The most important advantages of digital banks are the ease of opening an account, accessing and managing the balance, lower fees and costs, and having diverse and distinct services (such as budget applications, spending plans, and flexible integration) and other advantages. Because of these advantages, digital banks have begun to spread in many countries in Europe.” And the Americas and Asia, and among these banks - Chase bank - Monzo - Revolut - Starling - Tide and other digital banks.”
Al-Hashemi explains, “The issue of the success and expansion of this type of bank is linked to the state of the economic environment and the nature of society, as these banks often rely on non-cash electronic operations that are active in an advanced banking system, and a society that tends to use cards instead of cash in its transactions.”
The financial expert calls on the Central Bank of Iraq to “wait a little in granting licenses to digital banks, evaluate all these risks and challenges, and search for new timings to launch this type of banks. They must be aware of the availability of favorable conditions and the presence of high chances of success, instead of haste and adventure, as this is a recipe.” "Ready to fail."
The establishment of any digital bank, inside Iraq, requires that about 30% of its shares belong to a traditional bank, and the services should be published via the Internet and mobile phone applications, and there should not be any branch, but only the general administration, and all services via the Internet, such as issuing a bank card and financial transfers. Deposits, loans, etc.
Iraq owns more than 70 banks, many of which were subjected to US sanctions, while the financial inclusion rate reaches a low level due to weak confidence between the banking sector and citizens as a result of the bankruptcy of some of them.
The Governor of the Central Bank of Iraq, Ali Mohsen Al-Alaq, had previously confirmed, on the sidelines of a celebration organized by the bank, that the steps achieved in financial inclusion that were accomplished today are accelerating and can close the gap that occurred during the past years as a result of the circumstances that Iraq went through.
Al-Alaq stated that the bank has ongoing meetings with the Iraqi government to expand the customer base in electronic payment methods and enhance financial inclusion, “as we see a great response from various state institutions in the context of expanding the financial and banking culture in Iraq.”
Al-Alaq said, “The factors that lead to the success and expansion of the role of financial inclusion are the citizen’s confidence in the institutions and tools available to him, as well as his vision of his interest in using them.”
He continued, "The Central Bank has become at the forefront of global central banks by using various financial technologies that provide speed and accuracy," revealing at the same time that "the bank has received large numbers of applications to establish digital banks. The concerned departments are working on the possibility of granting it a license to carry out its work in accordance with the controls and instructions issued." By the bank.
For his part, financial expert Mahmoud Dagher believes in a press interview followed by Al-Iqtisad News that “digital banks are natural banks, just like traditional banks, but they operate through applications and do not have face-to-face interactions.”
According to Dagher, digital banks can perform their work as an independent digital bank or even as classic banks, pointing out that the young generation has now become knowledgeable in using financial technology for withdrawal, transfer, etc.
Today, Iraq has one digital bank, while many applications are waiting for the green light from the Central Bank of Iraq to grant them a license to carry out their work in accordance with the controls and instructions issued by it.
According to the Central Bank of Iraq, licensing requirements to practice digital banking activity include that digital bank licenses in Iraq do not exceed (10%) of the total licensed banks, in addition to the presence of an economic feasibility study that includes business plans, strategies, and financial indicators for 4 years, including the technical aspect and services. scheduled to be launched.
It is noteworthy that these digital banks are subject to all laws, regulations and instructions issued by the Central Bank, including the Anti-Money Laundering and Terrorist Financing Law No. 39 of 2015.
Question: "What do you think the dinar will be floated at the start?
IMO at the start of the float 1 to 1 you'll never see it. So just looking at 1320 causes me to think maybe they'll start at about $1.30 or $1.50. They could start even higher.
When you see things that you don't want to see it's not like it's a delay. It's the Middle East...it's a different world...It's rather brutal...It's doggy eat dog...
The new currency that's coming out has more safety features on it than any other currency on this planet. More than the American dollar, because it's a state-or-the-art technology of how they produced it with the monetary reform.
Question: "What is the price of a bottle of Cokein Iraq?
" Way too much and that's why the prices are being adjusted and a new exchange rate will come out to match the new or lower denominations.
The problem is you don't see any of these contracts open do you?
...No, all of these contracts are sitting there waiting and waiting for what?For Sudani to pull the trigger.What is the trigger?
The lynchpin that will activate the contract and readjust the value according to the exchange rate of the Iraqi dinar, where the contract was signed in the Iraqi dinar value but to match their [contract holder's] currency. Brilliant... These signed guaranteed contracts will adjust to the calculation of the IQD value...These foreign currencies will not be calculated into the new exchange rate until the new Iraqi dinar exchange rate hits Forex...
A second set of books is a normal business action. Many companies, many firms for financial projections, for balances, for audit purposes, for changes whatever it may be, run a second set of books. The second set of books is simple business practice. It's not illegal unless you're doing it illegally under the table...This second set of books is not hidden...they [Iraq] expose it [their second second set of books] to the right people, IMF, World Bank, US Treasury...
Sudanese Advisor: Oil Prices Are Still Higher Than Their Budget Estimates And We Are Trying To Keep Spending To The Minimum
Time: 05/27/2024 Read: 1,404 times {Economic: Al-Furat News} A financial advisor to Prime Minister Muhammad Shiaa Al-Sudani revealed features of the financial budget schedules for the year 2024.
Mazhar Muhammad Saleh told {Al-Furat News} agency, “The announcement of the variables in the financial tables for the past year 2024 was undoubtedly in conformity with the constants adopted by Law No. 13 of 2023, the Federal (Tripartite) General Budget Law, specifically in the axis of the hypothetical deficit amounting to approximately 64 trillion dinars, and did not stray far.” Estimates of the budget tables in the planned deficit paragraph, as stated in the law above.”
He added, "Despite the above, there are important trends in the management of the public budget, whether on the side of public expenditures, in which the spending ceiling reached 211 trillion dinars, or the revenues and deficit itself, and they are summarized as follows:
1- Oil prices are still higher than their estimates in the tripartite budget of $70 per barrel, with a percentage change." Positively exceeding 16% above the approved price above, as we approach the middle of the fiscal year, while maintaining the export rates approved in the budget and managing oil production efficiently and in accordance with international agreements with OPEC regarding the issue of controlling production quotas.
2- There is high discipline in Maximizing non-oil revenues, especially tax and customs revenues, specifically after adopting automation, modern methods, and information technology in tax and customs assessment, estimation, and collection.
3- Striving to impose discipline on operational expenditures and keeping spending on them within acceptable minimum levels.
4- Ensuring to raise the efficiency of investment spending and operating all approved projects. This is to ensure a high growth rate in the gross domestic product, at a rate more than twice the population growth rate, by launching the movement of new projects without delay or stop.
Saleh noted that “the pattern of public spending, according to the schedules announced, is characterized by accuracy, objectivity, and self-savings, which contributes to reducing the resort to financing the actual deficit, even when needed, through internal borrowing and within limits that ultimately do not exceed the accepted international standard percentage for financing the deficit, which amounts to 3%.” “of the country’s total gross domestic product or slightly exceeding it.”
He pointed out "not to forget that the efficiency of annual spending in the operational and investment aspects is an important issue in determining the total annual public spending as planned." LINK
It certainly is a “push” ...They are talking about it openly in the Iraqi news. …They are blatant on this one “The impending rate change”. They are telling us what they are doing...
Articles in Iraq say clearly that the dinar is going to be worth more than the US dollar.
[via PDK]
did hear some interesting things from military contacts. One in particular kinda surprised me overnight...don’t panic because they do their best to cloud the timing...He said “Do not worry- it will be before July 4th.” We will have it all before July 4th. Actually a couple military contacts gave me that same time frame. I still have great hopes for sooner...it is interesting they have plans to have it completed by July 4th…For all we know it could happen tomorrow…nobody knows the timing.
Out of Iraq – hearing we are supposed to be getting news on Sunday that has to do with the budget but since they have already passed it- does this mean we are getting a rate? Or which projects were executed or started? I do not know.
I am seeing rates of somewhere between $3.81 to $3.91 from a number of contractors working in Iraq. They are working on infrastructure - everything from hospitals to power grid to roads etc... And I am still thinking it will be $2 something on the dong. I hope I’m wrong and my contacts are right and it’s closer to the $3 mark.
The International Monetary Fund Praises The Monetary Policy Of The Central Bank Of Iraq
Economy Monday, May 27, 2024 2:55 PM Baghdad/National News Center On Monday, the International Monetary Fund praised the monetary policy of the Central Bank of Iraq.
According to the report issued by the International Monetary Fund mission for the current year 2024 for Article 4 consultations, the Iraqi government’s measures will be more severe, including the monetary policy led by the Central Bank of Iraq.
The report indicated that “the Central Bank of Iraq has taken several measures aimed at stabilizing the national currency and controlling monetary inflation.” It added that “the Central Bank has raised the interest rate on monetary policy tools from 4% to 7.5% and increased the banks’ mandatory reserve requirements from 15% to 18%.” %, and these steps were decisive in reducing the inflationary pressures that Iraq suffered from, and this contributed to creating a more stable economic environment.”
The report emphasized that “important reforms in the banking sector, such as the gradual increase in bank capital and mergers between small banks, aim to strengthen the banking sector and increase its efficiency and flexibility in the face of economic shocks.”
The report noted that “Iraq has implemented new compliance measures to improve the transparency of cross-border financial transactions, by launching an electronic platform that imposes the disclosure of financial beneficiaries, which enhances the integrity of financial transfers in accordance with international banking standards, in addition to the role of the Central Bank of Iraq in expanding Correspondent banking relationships, to facilitate smoother international trade financing operations.”
China’s accelerating de-dollarization reflects a strategic shift towards economic sovereignty and reduced reliance on the USD.
In This Article:
The Rise of the Renminbi (Yuan) in Cross-Border Payments
Factors Driving China’s De-Dollarization
The Impact on the US Dollar’s Dominance
Future Projections for Global Currency Reserves
China is accelerating its move away from the US dollar (USD) in international trade and finance.
This shift raises questions about the future of the USD as the world’s primary reserve currency.
The Rise of the Renminbi (Yuan) in Cross-Border Payments
Since 2010, China has significantly increased the use of its currency, the renminbi (RMB), in cross-border transactions.
In early 2010, the RMB accounted for less than 1% of China’s cross-border payments, while the USD dominated with approximately 83%. However, by March 2023, the RMB had surpassed the USD in China’s international settlements, marking a historic shift.
China’s trade in RMB (Yuan) increased substantially from 0.3% to 53% between 2010 and 2023 while dramatically decreasing its USD trade from 83% to only 43% during the same time period.As of March 2024, over 52% of Chinese payments were settled in RMB, while the USD accounted for 42.8%.
This dramatic increase highlights the growing global acceptance of the RMB, driven by foreign investors’ willingness to trade assets denominated in China’s currency. Furthermore, countries like Brazil and Argentina have started allowing trade settlements in RMB, enhancing its international presence.
Factors Driving China’s De-Dollarization
Several factors contribute to China’s de-dollarization. Key among them is the strategic aim to reduce reliance on the USD, which is influenced by geopolitical tensions and economic considerations.
The increasing use of RMB in international trade and finance is part of China’s broader strategy to strengthen its economic sovereignty and reduce exposure to US financial sanctions.
Additionally, China’s Belt and Road Initiative (BRI) promotes the use of the RMB in participating countries. By facilitating infrastructure projects and trade in RMB, China fosters economic ties and reduces these countries’ dependence on the USD. Moreover, the expansion of RMB-denominated financial instruments has attracted international investors, further boosting its use.
The Impact on the US Dollar’s Dominance
Despite the rise of the RMB, the USD remains the dominant global currency. It accounts for nearly 60% of global foreign exchange reserves and 89% of global trade finance.
However, the gradual shift towards the RMB indicates a slow erosion of the USD’s unchallenged supremacy.
The impact of this de-dollarization trend is complex. A diminished role for the USD in global finance could lead to underperformance of US financial assets and weaken the effectiveness of US sanctions.
Nonetheless, significant barriers remain to a complete de-dollarization. China’s strict capital controls and slower economic growth limit the RMB’s global liquidity and attractiveness compared to the USD.
Future Projections for Global Currency Reserves
While the USD is likely to retain its leading role in the near- to medium-term, the increasing use of the RMB points to a more multipolar currency system (the coming BRICS currency and financial system).
The diversification of global foreign exchange reserves, with growing shares for non-traditional currencies like the Australian and Canadian dollars, reflects this trend.
Global trade in Chinese RMB (Yuan) increased from 2.2% to 7.0% between 2013 and 2022. However, the USD remained king growing from 87% to 88.5% of total global trade.
The trajectory of RMB’s growth will depend on China’s economic policies, geopolitical developments, and the global economic environment.
If China continues to liberalize its financial markets and promote the RMB’s international use, its share in global reserves could rise further, challenging the USD’s dominance.
The Bottom Line
China’s accelerating de-dollarization reflects a strategic shift to enhance its economic sovereignty and reduce reliance on the USD.
While the USD remains dominant, the rise of the RMB signifies a gradual move towards a more diversified global currency system. The future of global finance will likely see a continued balance of power between the USD and emerging currencies like the RMB and the BRICS common trade currency, driven by geopolitical and economic shifts.
International Praise For The Efforts Of The Iraqi Central Bank: Controlling Inflation And Strengthening The Banking Sector
Economy News – Baghdad The International Monetary Fund praised the actions of the Iraqi government led by the Central Bank of Iraq, indicating that it had taken several measures aimed at stabilizing the national currency and controlling monetary inflation.
The Central Bank media stated, in a statement received by Al-Eqtisad News, that it “raised the interest rate on monetary policy tools from 4% to 7.5% and increased the mandatory reserve requirements for banks from 15% to 18%, and these steps were decisive in reducing the inflationary pressures that are affecting the economy.” Iraq suffered from it, and this contributed to creating a more stable economic environment.”
The report stressed that “important reforms in the banking sector, such as the gradual increase in bank capital and mergers between small banks, aim to strengthen the banking sector and increase its efficiency and flexibility in the face of economic shocks.”
The report noted that “Iraq has implemented new compliance measures to improve the transparency of cross-border financial transactions, by launching an electronic platform that imposes the disclosure of financial beneficiaries, which enhances the integrity of financial transfers in accordance with international banking standards, in addition to the role of the Central Bank of Iraq in expanding Correspondent banking relationships, to facilitate smoother international trade financing operations.”
High Level Talks Indicate Vietnam Poised to Join BRICS: Great News for VND
Vietnam’s anticipated membership in BRICS+ highlights its growing global economic influence and benefits for the Vietnamese Dong (VND).
In This Article
Overview of Vietnam’s Economic Growth
Insights from the Recent High-Level Talks
Strategic Importance of BRICS+ Expansion
Future Prospects for Vietnam within BRICS+
Benefits to the VND from BRICS Membership
Vietnam’s potential membership in the BRICS+ alliance marks a significant milestone in its global economic status.
This development comes as the country continues to strengthen its economic ties with major global powers and emerges as a key player in the international arena.
Overview of Vietnam’s Economic Growth
Vietnam’s economy has been one of the fastest-growing in the world, characterized by robust GDP growth, increasing foreign direct investment, and expanding industrial sectors.
Its strategic location, coupled with a young and dynamic workforce, has attracted numerous multinational corporations seeking to diversify their supply chains. This economic boom positions Vietnam as a prime candidate for inclusion in influential global groups like BRICS+.
Insights from the Recent High-Level Talks
During a recent visit to Vietnam, Dr. YKOVLEV ARTEM ALEXANDROVICH, Director of the Center for Russian Strategy in Asia, engaged in discussions with the Vietnamese Prime Minister.
The talks focused on potential economic collaborations between Vietnam and the Russian Federation and explored the feasibility of expanding BRICS membership to include Vietnam.
Dr. Alexandrovich emphasized the resilience of the Russian economy despite extensive sanctions and highlighted the strategic partnerships Russia has forged with China and other Asian countries.
He noted that these alliances have been instrumental in sustaining economic growth and stability. The discussions underscored the mutual benefits that Vietnam’s inclusion in BRICS+ would bring, aligning with the shared objectives of fostering economic cooperation and development.
Strategic Importance of BRICS+ Expansion
BRICS represents a coalition of emerging economies with significant global influence. The proposed expansion under the BRICS+ model aims to include other rapidly growing economies, enhancing the group’s geopolitical and economic clout.
Vietnam’s inclusion would not only bolster its own economic ambitions but also contribute to the collective strength of BRICS+.
Dr. Alexandrovich highlighted that the expansion of BRICS is crucial for reshaping the global geopolitical and geo-economic landscape, promoting a multipolar world order.
When asked if Vietnam would be a good candidate to join BRICS, Dr. Alexandrovich replied, “Vietnam’s economic trajectory aligns well with the goals of BRICS+, making it a valuable addition to the alliance.”
This membership would open up new avenues for trade, investment, and technological collaboration, benefiting all member countries.
Future Prospects for Vietnam within BRICS+
As Vietnam prepares to join BRICS+, the country stands to gain significantly from increased access to markets, resources, and technology from other member nations.
This membership would accelerate Vietnam’s economic growth, enhance its global trade relations, and provide a platform for greater influence in international economic policies.
Furthermore, Vietnam’s participation in BRICS+ aligns with its long-term strategic goals of diversifying economic partnerships and reducing dependency on any single market. By joining forces with other emerging economies, Vietnam can strengthen its position in global value chains and contribute to shaping the future of international economic governance.
Key Benefits to the VND from BRICS Membership
Today, the expanded BRICS+ nations collectively represent over 40% of the world’s population and around 25% of global GDP.
Stabilized Exchange Rate: As part of BRICS+, Vietnam could benefit from a more stable Vietnamese Dong (VND). The economic collaboration within the bloc, including trade settlements in local currencies, could reduce Vietnam’s reliance on the US dollar, leading to less volatility in the VND exchange rate.
Stronger Financial Support: Vietnam would have access to financial resources from the BRICS New Development Bank (NDB). This can help support infrastructure projects and other development initiatives without the stringent conditions often imposed by Western financial institutions. Enhanced financial stability and support can bolster investor confidence in the VND.
Enhanced Foreign Exchange Reserves: Trade within the BRICS+ framework can lead to increased foreign exchange reserves for Vietnam. As trade grows, so does the inflow of foreign currencies, which can help stabilize and strengthen the VND.
Increased Investment: Membership in BRICS+ can attract more foreign direct investment (FDI) into Vietnam. Investors often view membership in such influential groups as a sign of economic stability and growth potential. Increased FDI can further strengthen the economy and, consequently, the VND.
The Bottom Line
anticipated entry into the BRICS+ alliance signals a pivotal moment in its economic evolution.
The country’s impressive growth, strategic partnerships, and alignment with BRICS+ objectives position it as a key player in this expanding coalition.
As BRICS+ continues to shape the global economic landscape, Vietnam’s membership promises to bring mutual benefits, drive collective prosperity for all member nations, and enhance the stability and strength of the Vietnamese Dong.
