Central Bank: Closing the electronic platform will not affect the movement of remittances at all
economy | 09:47 - 01/16/2025 Mawazine News – Baghdad The Central Bank of Iraq confirmed that closing the platform will not affect the movement of remittances at all, while noting that transfers through this platform until 12/23/2024 are less than 7 percent of total sales.
A source explained to the official newspaper, which was followed by (Mawazine News), that "the aim of this step is to control financial operations and work within the international scope in the process of foreign transfers and adopt the method of correspondent banks, which contributes to enhancing the stability of the financial sector in light of the current circumstances.
" The Central Bank also indicated that "strengthening the balances of Iraqi banks that have correspondent banks abroad will continue as is," explaining that this does not mean stopping "currency selling" operations, but rather a change in their mechanisms within a method followed all over the world.
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He added that the mechanism for strengthening bank balances has changed, as it is now done through the accounts of Iraqi banks with correspondent banks directly, instead of the accounts that were done through the Central Bank, and that this new mechanism is dedicated to meeting the needs of imports and foreign trade of goods, commodities and services, which contributes to supporting the financial and economic stability of Iraq. https://www.mawazin.net/Details.aspx?jimare=258658
Oh, but here is the juicy part we all need to be paying attention to.
Hantoush also suggested the “possibility of transferring the dollar to trading platforms in the stock market, to be sold to those entitled to it through direct transactions instead of sending the dollar exclusively to banks”, “stressing the need to organize these operations by switching to the “Forex” market,” and implementing mechanisms that ensure that funds are not transferred until the goods arrive with the banks’ guarantee.
WOW! WOW! WOW! Did they just suggest using the trading platforms in the stock market i.e FOREX…. You gotta luv it… Music to my ears….
Now let’s take a step back to the White Paper. What does it say? Afterall this is the blueprint of how they are going to get back on FOREX, the end result. Let’s read page 50 of the White Paper below:
Then in the article economic expert Nabil Jabbar Al-Tamimi said: “The transfer platform at the Central Bank of Iraq was a mechanism for conducting financial transfers for merchants and importers through local banks, as the platform supervised these operations.”
He added to Al-Sabah, saying: “The Central Bank has created the necessary conditions for conducting transfers by establishing direct relations between local banks and international banks through major correspondent banks, which means that transfers can be conducted in accordance with international standards without the need for an electronic platform.”
In other words, economic expert Nabil Jabbar Al-Tamimi is saying they are ready for FOREX after implementing all these banking and financial reforms.
The White Paperreforms have been successful. It is time to move to the next stage which is….?
Well folks financial and banking researcher Mustafa Hantoush just pointed out to us what the next stage should be.
Yes, I mean FOREX! Did you hear me I said FOREX!
Seems to me they are at the point of meeting the Obama era requirements and beyond as needed to go to this next stage.
But remember this too, that just as the rules changed from the Bush era to Obama era they will most likely change from Obama era to Trump era in 2025. I do not see the Trump era administration not seeing the necessity for going to FOREX with all the progress of the reforms to move to the next stage.
I am sure the US Treasury will agree.
I am told by the CBI contact on Wednesday that they do agree and are giving Iraq a “thumbs up” to move ahead. So they agree too.
AL-SUDANI: IRAQ IS AMONG THE MOST ATTRACTIVE COUNTRIES FOR INVESTMENT DURING THE PAST TWO YEARS
Prime Minister Mohammed Shia al-Sudani confirmed on Wednesday that Iraq is among the most attractive countries for investment during the past two years,indicating that investment opportunities in Iraq are the most at the level of the countries of the region.
The media office of Prime Minister Mohammed Shia al-Sudani stated in a statement, which was reviewed by “Al-Eqtisad News”, that “Prime Minister Mohammed Shia al-Sudani participated, on the sidelines of his visit to the United Kingdom, in the financial symposium held in London, in the presence of major British financial companies, Iraqi private sector companies, and a number of government officials from both countries.”
According to the statement, al-Sudani pointed out during the symposium “the importance of this visit, which represents a new era in the relationship between the two friendly countries,” indicating that “Iraq has concluded a strategic agreement with the United Kingdom, in addition to agreements and memoranda of understanding between ministries and relevant authorities, and others signed by the private sector with British companies, stressing the need to translate these understandings into practical, useful, fruitful and implementable formulas.”
Al-Sudani spoke about the stable situation in Iraq, which has become a promising country for development, investment and work in all fields, pointing out that it has achieved real reforms based on reliance on the private sector.
He explained that most of the economic reforms came with proposals from the private sector to facilitate the business environment and provide the best ways to work.
Al-Sudani said during the financial symposium that “reforming the financial and banking sector was a priority,” stressing “taking a series of steps to restructure government banks and contract with Ernst & Young, and the Central Bank contracting with Oliver Wyman.”
Al-Sudani added: “We have cooperation with the US Treasury, and today all transfers are made through correspondent banks and with reliable steps,” indicating: “We have provided sovereign guarantees to the private sector to reduce risks in productive projects in the country.”
The Prime Minister pointed out that “the Iraq Development Fund works as a new idea for the state in embracing and empowering the private sector,” noting that “the investment law in Iraq is the best in the region, as it enables investors to freely transfer profits and capital.”
He continued, saying: “Investment opportunities in Iraq are the most among the countries of the region, and Iraq is among the most attractive countries for investment during the past two years,” indicating: “We have noticed a desire among international companies to expand investment in Iraq and open new projects,” referring to “the need for an Iraqi and foreign banking sector capable of absorbing these operations and covering investment activity.”
He stressed that “Iraq needs insurance companies, and this sector must be strengthened through innovation, expanding digital insurance, and risk analysis,” explaining: “We are working to transfer expertise and knowledge to Iraqi cadres and enhance their capabilities in global investment methods.”
He concluded by saying: “The Iraq Investment Forum will be held next April, and we invite you to visit Iraq and take a closer look at the available opportunities.”
The Central Bank of Iraq confirmed that closing the platform will not affect the movement of remittances at all, as remittances through this platform until 12/23/2024 represent less than 7 percent of total sales, according to a source in the bank.
The source explained to Al-Sabah that “the aim of this step is to control financial operations and work within the international scope in the process of foreign transfers and adopt the method of correspondent banks, which contributes to enhancing the stability of the financial sector in light of the current circumstances.”
Yes, Ali Al-Alaq does know what he is doing…. lol..lol..lol.. But what are these “current circumstances that are being referred to here in this article? I will tell you what they are – they are the circumstances are not having the dinar on the currency markets already, get it. Dr Shabibi wanted to go directly to FOREX and not have to go through all these other steps since we witnessed from Jan 2023.
The Central Bank also indicated that the strengthening of the balances of Iraqi banks that have correspondent banks abroad will continue as is, explaining that this does not mean stopping the “currency sale” operations, but rather a change in their mechanisms within a method followed all over the world
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He added that the “mechanism for strengthening bank balances has changed, as it is now done directly through the accounts of Iraqi banks with correspondent banks, instead of the accounts that were done through the Central Bank”, and that this new mechanism is dedicated to meeting the needs of imports and foreign trade of goods, commodities and services, which “contributes to supporting the financial and economic stability of Iraq”. Did they say the word “stability”? Didn’t the CBI tell us years ago they needed stability and security to conduct the Project to Delete the Zeros? Sounds to me they have it now. We also now know more of what the CBI meant by the use of that term Stability. It has become very clear to us now.
In the article financial and banking researcher Mustafa Hantoush pointed out that the Central Bank has strengthened the dollar accounts of Iraqi banks in foreign correspondent banks, which has “reduced the direct intervention of the Central Bank and allowed a greater role for foreign banks in auditing commercial operations.”
Hantoush also pointed out that “if the Central Bank wanted to reduce the gap in the dollar, it should open the door to competition between banks and rely on a basket of currencies to expand the options available in the market”, calling for amending the criteria for evaluating local banks and raising their financial capabilities, which would contribute to achieving stability and increasing competitiveness, and thus stabilizing the dollar price. Can you see now why reducing the gap in the rate between the parallel market and the CBI official rate is so important and vital to the next step? This objective is not going to change. It has to be done. They must stabilize the dollar price to the official CBI price.
SHELL OIL COMPANY ANNOUNCES ITS READINESS TO INCREASE ITS INVESTMENTS IN IRAQ
Shell Oil Company CEO Wael Sawan announced today, Wednesday, January 15, 2025, the company’s readiness to increase its investments in Iraq.
A statement by the Prime Minister’s media office, received by “Baghdad Today”, stated that “Prime Minister Mohammed Shia al-Sudani received today, Wednesday, at his residence in the capital, London (Sawan), and during the meeting, cooperation between Iraq and the company, which is one of the most important oil, gas and petrochemical companies in the world, was discussed, especially since the government announced many investment opportunities in these sectors.”
The company’s CEO announced “readiness to increase investments in Iraq, especially in the field of associated gas, in addition to investing in the free gas sector, for which the government has offered a licensing round to invest in several regions of Iraq.”
So, now let’s go on with the current juicy stuff from Iraq. Yes, real “factual” information.
😊As you know there is usually one article that stands out from the rest in just about every one of my Newsletters. Today is no exception. The title of the article today is “CENTRAL BANK: CLOSING THE ELECTRONIC PLATFORM ENHANCES FINANCIAL STABILITY”. Let’s exam this article today. What are they trying to tell us?
First, I need to lay some groundwork, a bit of history, about the strategy to get Iraq to where it is today. Then we will fit this strategy into where the current news.
If you recall there were two conflicting strategies for developing Iraq from the past. One was from the president G.W. Bush era and the other one from the president Obama era. The Bush era wanted to move quickly and get the Iraqi currency back to the global markets, if even a low rate, then as the economy grew stronger, watch the rate rise as speculators joined in.
This strategy knew the repercussions of lingering this objective and what might happen in the long term if not done sooner than later. Yes, as investors in the dinar we all could have made millions even at a lower rate if on FOREX.
Can you remember those days when we all thought even a 10 cent IQD was going to make us rich? This strategy was made possible under the tutelage of Dr. Sinai Shabibi and his financial expertise. Over this past decade we witnessed these repercussions too.
So, Bush left the Whitehouse and Obama took over. This is where the conspiracies took place. This is when all the corruption began. In December of 2012, the Central Bank of Iraq was allowed to be raided to end the Bush/Dr. Shabibi strategy for the Iraqi dinar.
Instead, Obama wanted to continue using the dollar for payments of imports and actually promoted the money laundering to Iran. This situation worsened as the years rolled on. As investors we followed the news and so we learned of what was going on and witnessed trillions of dollars of the Iraqi oil wealth being stolen, yet the Obama treasury did nothing to stop it then. It was just all words and no real action.
We witnessed early exchanges of the dinar for dollars by Obamas buddies, senators and even friends of friends. Finally, it stopped in early 2013 but left a scar of corruption on the Obama administration when it comes to Iraq.
This corruption has not yet been widely exposed, but it will and this is going to be huge news of exactly what happened back then. Trust me on this one….
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So, under the Obama era for Iraq the strategy changed and so it was mandated that Iraq first rebuild its economy then we could think about moving the dinar to global markets.
There were no realistic set of goals or measurements set by the Obama administration to say to Iraq when enough is enough. Meanwhile, Iraq also did not have the benefit of its currency to help rebuild Iraq and accomplish these goals.
The constant corruption with the dollar left a stain on future investors. This strategy only hurt Iraq yet even more. Was this all intentional to delay any real progress for Iraq and allow this corruption to continue? One has to wonder…. I believe it was.
Okay so this new Obama era strategy was implemented and enforced now since 2012.
There was not going to be any major RV or Reinstatement until Iraq first rebuilt its economy, so what was said. You remember this mantra – get out of the rentier oil based economy…bla, bla, bla. But what about the value already in the dinar?
After all it was at around $3.22 when the 1991 attack into Kuwait began? Iraq then finally got rid of the 8 years of Nori Al Maliki and struggled to find a new prime minister who could lead the country out of this dilemma. Tell me Nori Al- Maliki disaster was not intentional. They also needed a champion to lead the Central Bank of Iraq.
Iraq then went through some really bad years over ISIS war and Covid events. Oil prices plummeted and the CBI reserves lowered to dangerous levels. All that work of Dr Shabibi was waisted away.
As the years rolled on, we read article after article about the Project to Delete the Zeros and it was coming.
There were times when they told us they were going to do it and do it now. But these times were short lived and it was always stopped from some excuse or another. So, we know they have the newer lower denominations and coins already printed. This is proof of it.
Then in late 2022 a series of four (4) events took place taking Iraq to a new level. Finally, the dragged out Iraqi elections, concluded and confidence was placed with Al-Sudani to lead the country.
Also, Ali Al-Alaq came back to the CBI as proxy governor. Remember he worked under the tutelage of Dr Shabibi.
Also, we learned that in fact Chapter VII sanctions were finally lifted, contrary to what we were told years prior. Yes, we learned that all war reparations had to first be repaid to Kuwait. It was done. In December 2022 Iraq was finally “fully” released from all Chapter VII sanctions.
So, you see I don’t know that if all of these events just happening in such a short period were coincidental or not or maybe by design but what I do know is the impact they have had in such a very short period of time in comparison to the Obama nightmare decade long era to the current.
So, Obama left office and the Trump era began. Everyone asks why didn’t Trump push the RV when he was in office. It’s not that easy to switch policies such as what was happening in Iraq. Let me explain what happened then.
The new President Trump, of course was briefed on the situation in Iraq. He made a decision to work more on containing Iran (preventing a nuclear war) and working with Israel as his partner to do so.
He wanted to prevent exactly what did later happen when Biden took office- a war in the middle east. During the Trump era at this time there was an economic plan devised for the middle east under Jared Cushner, do you remember it? He was an advisor to the president.
Jared’s plan basically asked all the countries of the middle east to work towards peace through economics. To pitch his plan, he suggested why not develop peacefully with economic policies rather than fighting through long standing terrorist aggression acts. Why spend so much money and wealth fighting each other?
The plan seemed to take root, but it needed a direct second term for Trump to grow, which he did not get. Under president Biden we witnessed yet another disastrous policy for the middle east and war exploded out once again. But the Trump era seeds were planted, remember this…..
However, I have to say that I witnessed God’s Hand at Work in the middle east. Even in spite of all the conflict and mess of the Biden administration as it turned on the middle east.
Iraq still seemed to move ahead. Was it God’s design then that instigating these four elements colliding all at once in 2022, as I described above. Was it coincidental? I think not! The progress made in the last two (2) years in comparison to the last decade is enormous. I know it is hard for many to grasp really just how far Iraq has come since 2022. Many in the dinar RV investment community still believe this is going to drag on and on, maybe for years to come.
So, let me show you yet more proof today it will not drag on. Was my last Tuesday’s Newsletter 1/14 was not enough evidence?
So, we learned in January 2023 that the CBI implemented the “Electronic Platform”.
This platform did not end the currency auctions but instead was just a means to control them and audit them.
It allowed the CBI to get handle on just what was going on through these auctions set up by Dr Shabibi. They were meant to be short-term solution to prevent hyper-inflation. So who was purchasing the dollars and why? It was meant for full transparency. Also to prevent the funding of terrorism. Noe of this seemed to work.
Then throughout 2023 we witnessed the final de-dollarization of Iraq.
If you want to recall Dr Shabibi tried this also in 2011-2012 and got the dinar rate down to 1166 remember? It was stable and the parallel market was not a problem.The CBI mandated the use of the dinar in place of all dollars in sales and market places.
This was driven also by electronic point of sale and electronic banking. There was much more too but for the sake of dragging on this Newsletter let’s move on to the September of 2024.
In September 2024, it was announced that the electronic platform would end and dollar sales would be controlled by the Iraq banks with foreign correspondent banks. So, yet the CBI moved to another higher level of dealing with foreign trade. At this point Iraq moved to the normal way of conducting trade on an international level. Like I have said before, they simply moved to the “normal” way, the non-sanctioned way of doing business with the outside world. This is not new. Most countries follow this procedure.
This step that happened just two weeks ago is so critical to what is about to happen next.
This action of the correspondent banks completely took the sales of dollars away from the CBI.
The CBI is no longer using is reserves to back the dinar thus fund the payment of imports. In other words, the CBI is no longer backing the dinar solely by petro-dollars. Get it? Yes, we can summize this is what is happening slowly one step at a time. Many ask me what this means.
This means that Iraq is slowly breaking away from the de facto peg which is solelyto the U.S. dollar. Get it?
The dependency of the dollar alone to pay for imports is going away. In fact as of the move to correspondent banks, it has already gone away. It has to go away in order to go globally and reinstate the dinar back on FOREX. Get it? There is a new peg for the dinar coming shortly. In fact, this sole peg to the US dollar is gone now and the dealing with these correspondent banks already put an end to it since January 1st. Get it? Iraq is now just waiting and monitoring the parallel market. But in today’s news we learn that they are now talking about their next step. Read on….
So, in the two weeks since the Central Bank of Iraq implemented its decision to close the electronic platform for foreign transfers, opinions differed in economic circles regarding the impact of this measure on the financial situation in Iraq, especially in light of the current economic and political conditions.
However, despite the initial criticism the decision sparked, many experts and observers believe it is a “necessary step” to address the economic challenges Iraq is currently facing, especially in terms of reducing pressure on the central bank’s reserves and enhancing the stability of the exchange rate in the local market
ADVISOR TO THE PRIME MINISTER: IRAQ IS WITNESSING AN EXPECTED INVESTMENT BOOM IN 2025
Amina Al-Salami
Advisor to the Prime Minister for Financial Affairs, Mazhar Muhammad Salih, confirmed today, Wednesday, that the Iraqi economic path is moving in the right development direction for the coming years, while indicating that economic growth in 2024 constitutes an incentive to expand economic activities in Iraq.
Saleh said, in a statement to the Iraqi News Agency (INA): “There is a principle in the economy called the economic accelerator, which means that the growth in the non-oil GDP, which reached 6% in 2024, will be positively reflected in the strength of national investment in 2025.”
He added, “The Iraqi economy will witness a high investment boom in 2025 thanks to the economic accelerator factor
in the investment field, in addition to the high positive growth effects of national income in 2024.”
He pointed out that “businesses and investors are affected by the results of the basic idea behind the economic accelerator, which indicates that any increase in demand for goods and services as a result of national income growth in 2024 could lead to increased investment in capital such as machinery, equipment and labor in 2025.”
He continued, “businesses and activities need to expand their production capacity to meet the growing demand for goods and services, which will lead to a positive accumulation in the national economy’s production capacity in 2025, and this is what can be expected, especially if it is accompanied by a good agricultural season and a wet year in the coming months.”
He added, “Iraq’s economic path is moving in the right development direction for the coming years in a remarkable and positive way, thanks to the cooperation of the private and public sectors together.”
Did you read my headlines today for the Newsletter. So are you ready for some more ““WOW, WOW, WOW” news today?
Yes, they are now really saying these words.
This is going to be a very long RV Update commentary today so I encourage everyone to please take the time to settle down, relax, get a hot cup of coffee or tea and just slowly read it. But remember this is their words, not made-up bullshit by some idiot intel guru.
So, before I get into the details of this good news, I want to address something recently put out by this idiot from TNT (Totally Not All There) yes, this jerk TNT Tony.
He told his merry band of followers that his contact from Iraq told him someone recently flew into Iraq to exchange his dinar.
Really? When he arrived in Iraq the banks forced him to exchange his currency immediately. Yes, he said immediately. But exchange to what?
He said he exchanged his dinars to US dollars at the rate of $4.91. My ears bugged out when I heard this not because of the high rate but because once again the lie was so obvious that it really disturbed me that this idiot could even tell his listeners this crap, never mind them believing it. So what was wrong then with what was said?
First, we know that Iraq has de-dollarized the country.
We read tons of articles on this.
The Federal Reserves came into the country and is even now parked the US Treasury itself in the CBI building occupying an entire floor. We also know the banks are no longer allowed to exchange dinar for US dollars to citizens and this is reserved mostly now for travelers and even travelers have to show an airline ticket and proof of where they intend to go and the necessity for the dollars.
So then why in hell would the banks force them to exchange dinars to dollars is my first question and why would the banks disregard the CBI monetary policy so blatantly.
Next there is the issue of the rate. Why in hell would a bank then exchange for $4.91 when the “official” CBI rate is still 1310?
Aren’t they trying to enforce the “official” rate. The bank would therefore once again violate the CBI policy on currency exchange and lose money on this deal in a drastic way. This would set the bank up for funneling dollars to the black market, which the CBI is now trying to get under control to move to the next stage.
Next, I find it hard how his merry band of idiot followers suck up to this Tony guy idiot in terms of his so-called intel (or lies). Folks, I encourage you not to listen to this garbage and those of you who are part of TNT gang to leave this gang and think for yourself. You don’t need to pay someone to lie to you on every call as he does now require you to pay for his calls.
Okay, so I get it when TNT Tony says “bug off” and this is his way of bringing the intel to his listeners. Take it or leave it! He says it’s his internet site and his approach. And so if you don’t like his overly hyper-speculative methods then simply don’t listen to him, says Tony. No one is forcing anyone to listen to it. And thank God for that too lol..lol..lol.. !!! ☹
However, I complain about it and stick my nose into his affairs because people do care to know the truth and this has been the major source of confusion all along in this dinar RV community. I also do not agree with the con job being played on innocent people just wanting the TRUTH. They just want factual and honest news. Oh… but listening to the same stupid people who call in do they even really want this? Is this a social club or an intel call? Yes, these people need their daily dose of hype and speculation.
IRAQ SIGNS A MEMORANDUM OF UNDERSTANDING WITH THE BRITISH EXPORT CREDIT GUARANTEE CORPORATION.. AND THESE ARE ITS OBJECTIVES
Today, Tuesday, in the British capital, London, a memorandum of understanding was signed between the Sovereign Guarantees Initiative Committee and the British Export Credit Guarantee Corporation, on the sidelines of the Prime Minister’s official visit to the United Kingdom.
The ceremony was held under the patronage of Deputy Prime Minister and Minister of Planning Mohammed Tamim, where the Chairman of the Initiative Committee, Advisor to the Prime Minister Mohammed Sahib Al-Daraji signed on the Iraqi side, while the Director of the Business Group, Adam Harris, signed on behalf of the British Foundation.
The terms of the memorandum include supporting imports of production lines and industrial and agricultural technology for the Iraqi private sector from the United Kingdom.
This memorandum is valid for five years, and comes within the framework of the agreements and memoranda of understanding signed by the Iraqi government with a number of European countries, and aims to raise the efficiency of the Iraqi private sector and achieve integration with the international community.
In another context, the two sides agreed that the British Export Credit Guarantee Corporation would finance a number of vital projects for the Iraqi government, and prepare to increase the financing ceiling for productive government projects.
The signing of the Memorandum of Understanding was preceded by a joint meeting between the Iraqi delegation and the British Foundation, during which mechanisms for joint cooperation between the two sides were discussed, in a way that enhances bilateral relations between the two countries.
IRAQ CALLS ON THE WORLD TO CONDUCT A COMPREHENSIVE REFORM OF THE FINANCIAL SYSTEM AND A DIALOGUE ON TECHNOLOGY GOVERNANCE
The representative of Iraq to the United Nations in New York, Abbas Kazim Obaid, in his capacity as Chairman of the Group of 77 and China, delivered the group’s statement during the session of the United Nations General Assembly in which the Secretary-General reviewed the priorities of his term for the year 2025, in light of the circumstances and challenges facing the international community.
In his statement, the representative of Iraq stressed the complex and interconnected global challenges, including ongoing conflicts, the effects of climate change, poverty, hunger, high debt levels, limited financing for the Sustainable Development Goals, and the growing digital divide. He stressed the need to support developing countries in financing sustainable development through the Fourth Conference on Financing for Development.
He called for a comprehensive reform of the global financial system to address structural inequalities, ensure equitable access to long-term finance, and advance sustainable development efforts. He also stressed the importance of fully implementing the decisions of the Conference of the Parties on Climate Change, while supporting the Secretary-General’s efforts to achieve the Sustainable Development Goals by 2030.
Obaid also called for a comprehensive international governmental process to address the digital divide, the establishment of an independent scientific team for artificial intelligence, and the launch of a global dialogue on technology governance.
The Bitcoin community is continually exploring Layer 2 technologies (e.g., the Lightning Network) and side projects that could, in theory, offer greater compatibility with traditional finance frameworks. So theywill not be blacklisted. But the visibility on ISO-20022 platforms may be reduced. Not sure.
Institutions might prefer ISO 20022-ready cryptocurrencies if they want tighter integration with their internal systems. Where shenanigans in the blackmarket will not affect their overall system of regulatory protocol when it comes to processing transactions.
I hope you all know that the Iraqi Dinar has a lot to do with this statement by Donald Trump.
CENTRAL BANK: CLOSING THE ELECTRONIC PLATFORM ENHANCES FINANCIAL STABILITY
Two weeks after the Central Bank of Iraq implemented its decision to close the electronic platform for foreign transfers, opinions differed in economic circles regarding the impact of this measure on the financial situation in Iraq, especially in light of the current economic and political conditions.
Despite the initial criticism the decision sparked, many experts and observers believe it is a “necessary step” to address the economic challenges Iraq is currently facing, especially in terms of reducing pressure on the central bank’s reserves and enhancing the stability of the exchange rate in the local market.
The Central Bank of Iraq confirmed that closing the platform will not affect the movement of remittances at all, as remittances through this platform until 12/23/2024 represent less than 7 percent of total sales, according to a source in the bank.
The source explained to Al-Sabah that “the aim of this step is to control financial operations and work within the international scope in the process of foreign transfers and adopt the method of correspondent banks, which contributes to enhancing the stability of the financial sector in light of the current circumstances.”
The Central Bank also indicated that the strengthening of the balances of Iraqi banks that have correspondent banks abroad will continue as is, explaining that this does not mean stopping the “currency sale” operations, but rather a change in their mechanisms within a method followed all over the world. He added that the mechanism for strengthening bank balances has changed, as it is now done directly through the accounts of Iraqi banks with correspondent banks, instead of the accounts that were done through the Central Bank, and that this new mechanism is dedicated to meeting the needs of imports and foreign trade of goods, commodities and services, which contributes to supporting the financial and economic stability of Iraq.
For his part, the economic advisor to the Prime Minister, Mazhar Mohammed Salih, explained that the Central Bank had previously financed foreign trade through the currency sale window to perform two basic functions:
1.the first is to intervene in the money market to absorb liquidity and maintain the stability of the exchange rate,
2.and the second is to finance foreign trade for the private sector.
However, the Central Bank faced major challenges due to the requirements of the Federal Reserve and the US Treasury to ensure that the dollar is not used in ways that conflict with US foreign policy and national security. Salih added to Al-Sabah that “the new transfer system is based on a direct relationship between local Iraqi banks and foreign correspondent banks with a focus on compliance issues and combating money laundering.”
He pointed out that the Central Bank has strengthened the dollar accounts of Iraqi banks in foreign correspondent banks, which has reduced the direct intervention of the Central Bank and allowed a greater role for foreign banks in auditing commercial operations.
Saleh stressed that the Central Bank has taken steps to diversify the foreign currency portfolio, including the use of the Euro, the UAE Dirham, and the Chinese Yuan, to facilitate transactions with major trading partners, noting that the new mechanisms aim to facilitate foreign trade and enhance control over money transfer operations, while ensuring that goods and services reach the country properly and without violations.
The financial advisor to the Prime Minister also noted that “these new measures do not affect the flow of supplying the Iraqi economy’s need for dollars, but they are a major development aimed at enhancing transparency and compliance with international and local laws.”
In contrast, financial and banking researcher Mustafa Hantoush believes that the Central Bank of Iraq is trying to avoid the damages resulting from exporting the dollar by adopting monetary policies and currency management that ensure reducing its liability without affecting its financial strength.
Hantoush told Al Sabah that he believes that the Central Bank seeks to avoid this responsibility by authorizing foreign banks that have accounts in correspondent banks with the approval of their branches or foreign owners.
He also pointed out that if the Central Bank wanted to reduce the gap in the dollar, it should open the door to competition between banks and rely on a basket of currencies to expand the options available in the market, calling for amending the criteria for evaluating local banks and raising their financial capabilities, which would contribute to achieving stability and increasing competitiveness, and thus stabilizing the dollar price.
He
also suggested the possibility of transferring the dollar to trading platforms in the stock market, to be sold to those entitled to it through direct transactions instead of sending the dollar exclusively to banks, stressing the need to organize these operations by switching to the “Forex” market, and implementing mechanisms that ensure that funds are not transferred until the goods arrive with the banks’ guarantee.
He explained that these measures would increase tax revenues and limit illegal trade, which would contribute to strengthening the national economy.
For his part, economic expert Nabil Jabbar Al-Tamimi said: “The transfer platform at the Central Bank of Iraq was a mechanism for conducting financial transfers for merchants and importers through local banks, as the platform supervised these operations.”
He added to Al-Sabah, saying: “The Central Bank has created the necessary conditions for conducting transfers by establishing direct relations between local banks and international banks through major correspondent banks, which means that transfers can be conducted in accordance with international standards without the need for an electronic platform.”
(Mnt Goat: In other words economic expert Nabil Jabbar Al-Tamimi is saying they are ready for FOREX after implementing all these banking and financial reforms.)
Al-Tamimi explained that the Central Bank has replaced the electronic platform with regular and natural transfer mechanisms, through solid local banks, which provides merchants with direct ways to transfer money, stressing that these mechanisms contribute to their obtaining the dollar at the official price, which helps in gradually reducing inflation as a result of the stability of the official dollar price.
He also stressed that “with this measure, the need to deal in the unofficial dollar on the black market is reduced, which enhances the stability of the financial market in Iraq.”
