STATUS OF THE RV , PART. 1
Any move on the part of the Central Bank of Iraq to restrict the citizens in the use of the dollar and more use of the dinar is yet another move towards monetary sovereignty for Iraq. Remember how Iraq got the US dollar in circulation in the first place, it was because of the sanctions.
Now they have ditched the dollar, the parallel market is done and they are going back to sole use of the Iraqi dinar as their main currency within the country. This is exactly how it was before the 2003 invasions and the hyperinflation conversion to the three zero notes and the use of the currency auctions (sole use of the US dollar to pay for imports). Yes, these days are almost over.
So, what we really want to see is the use of the dinar to pay for imports and thus the demand for dinar by other countries as a currency of some value.
Right now, Iraq does send their dinars to some of the correspondent banks to pay for imports but this is still limited as many banks still want US dollars directly. But the conversion process (exchange of dinars for dollars) process is taking on steam and is rolling forward over time.
No, this does not yet mean an RV or reinstatement has happened and so stop listening to these silly intel gurus who don’t know what they are talking about.
😊😊So, in yet another very good article titled “EXPERTS: THE NATIONAL PAYMENT CARD ENHANCES MONETARY SOVEREIGNTY.” We learn more about the project called the Local Scheme. This project has many benefits. I will let you go read the entire article for yourself to get all the details.
I included it in the Articles Section. However, I do want to emphasis that I believe this is yet another Central Bank’s initiative to contribute to absorbing liquidity and eliminating financial hoarding of dinars and dollars, as well as strengthening the principle of monetary sovereignty. Aren’t these the two main monetary issues facing the CBI today?
So, yet another solution is being implemented in the hope it will solve these issues. How many solutions have we see over the years to combat these banking issues? Will this one finally work to the desired level? We won’t have the answer to this question until they let this project take root. I am sure they will tell us in the upcoming news. Let’s wait and see.
Where’s the BEEF, I mean budget tables….lol…
I want to bring you attention to one of the most controversial issues facing Iraq today. In the article titled “WHERE ARE THE 2025 BUDGET SCHEDULES? PROJECTS ARE SUSPENDED, PLANS ARE POSTPONED, AND PARLIAMENT HOLDS THE GOVERNMENT ACCOUNTABLE” we read about this issue again.
Despite more than half a year having passed since the start of the fiscal year, the 2025 budget schedules remain absent from the House of Representatives, a scene that rekindles concerns about a financial paralysis that threatens service and development projects in the governorates. This delay comes despite the country’s adoption of the “Tripartite Budget” law, which was supposed to spare Iraq the annual wait for approval of financial allocations and ensure stability in the flow of funds and project planning.
Remember that in past articles the Finance Committee has fully explained why the budget tables are being held up. They told us the main reason is the drop in oil prices. The second reason (connected to the first) is that Iraq does not want to run the government on a deficit. Obviously is revenues drop how will they pay for the budget?
So the effort has been to slim down the budget to meet the oil revenues. The third reason given to us in the past is they have to pay for the 2025 and if oil is not flowing from the Kurdistan region, revenues are affected that pay their salaries. If they don’t get their salaries, they cut off the oil. So what comes first the chicken or the egg. You see these issues are all interconnected.
Some say why not just pay the salaries to the Kurds from the CBI reserves? This is not a practice the CBI wants to encounter unless an emergency crisis such as what happened in 2020 during the Covid pandemic. There are certain lessons learned too from that era. One is over spending in times like this. Oh.. why are the salaries late to the Kurds in the first place? This has a lot to do with constitutional issues in the sale of oil, again which could be easily solved with the passing of the Oil and Gas Law.
