FIREFLY: The United States of America is totally supervising all financial transactions #iraqidinar

 

SOMO IS MOVING TOWARDS GLOBAL OIL TRADING

 SOMO IS MOVING TOWARDS GLOBAL OIL TRADING.

The Iraqi Oil Marketing Company (SOMO) is moving towards a qualitative shift in its operations, from simply selling crude oil through traditional outlets to entering the field of trading in global oil markets. The company’s management described this move as aiming to maximize revenues and seize opportunities in a rapidly fluctuating market, while oil experts warned of the risks of this step if the appropriate institutional and legal environment is not prepared for it.

The Director General of the Oil Marketing Company, Ali Nizar Al-Shatri, told Al-Sabah that the company is currently studying mechanisms for transitioning from the traditional sales model to a trading model, in line with Iraq’s economic interests, noting that this approach comes within a vision aimed at maximizing oil revenues and not limiting marketing operations to Iraqi ports only.

Al-Shatri explained that the company seeks to enter into positive partnerships with reputable international companies that have extensive experience in the field of oil trading, indicating that the latest of these moves was the negotiation with the global company “ExxonMobil”, to enter into an advanced commercial partnership that contributes to developing the staff of “SOMO”, and building a marketing and commercial arm capable of interacting with the changes of the global market and seizing the available opportunities.

He pointed out that global oil markets suffer from clear weaknesses in some of their joints, but SOMO is working to invest in the available strengths through these partnerships, enabling it to move from the role of seller to a more effective player in the international oil trading system.

Conversely, experts believe that this shift, despite its importance, requires extreme caution and well-considered measures. Oil expert Yahya Nasser Al-Aqabi emphasized that SOMO’s transition from traditional sales to trading in global markets is not merely an administrative step, but a sovereign decision with significant implications for state revenues and financial sustainability.

Al-Aqabi explained that the current sales model adopted by SOMO is based on selling oil from Iraqi ports at prices linked to global indicators, with relatively limited exposure to risks, while entering the field of trading represents a completely different activity, requiring independent institutions with strict systems and expert management capable of dealing with price fluctuations and market risks.

He added that SOMO, as a company affiliated with the Ministry of Oil, may not currently possess all the institutional capabilities necessary to undertake this type of complex activity, warning that any ill-considered step could be fraught with risks. He cited the experiences of oil-producing countries and national oil companies belonging to OPEC member states, where success was achieved when independent commercial arms were established under clear oversight and professional management.

Al-Aqabi stressed the need for any such transformation to be gradual and deliberate, starting with limited steps whose results are carefully evaluated, before moving to a wider scope. He pointed out that any serious project in this direction needs financial and administrative independence, and a complete separation between political decision-making and commercial activity, warning that ambitions not supported by building strong institutions may turn from a tool for maximizing revenues into a gateway to losses.

For his part, oil expert Kovind Shirwani warned of the risks of SOMO entering the oil speculation market, especially with regard to forward contracts, considering that this step could constitute a major gamble for a government company suffering from red tape and bureaucracy.

Sherwani explained that speculative activity is mostly suitable for private trading companies, or speculators who have high flexibility in decision-making, even if they do not have great financial efficiency, but the entry of a large government institution like “SOMO” into this field requires double caution, especially in light of the current indicators that point to a relative weakness in the global oil market.

He stressed that any move towards trading must be preceded by comprehensive preparation and a careful study of potential risks, in order to avoid exposing oil revenues, which form the backbone of the Iraqi budget, to unforeseen fluctuations.

While this step represents a legitimate ambition to maximize state resources, its success remains contingent on Iraq’s ability to build flexible, independent oil institutions governed by strict governance systems that ensure revenue protection and financial sustainability, away from reckless adventures.

MNT GOAT: Central Bank of Iraq Clarifies Dinar Stability Amid Devaluation Rumors

CBI Official Statements on Currency Stability

Key points from recent announcements:

• The dollar exchange rate at the Central Bank is fixed and will not change.

• Fluctuations in the parallel market are caused by some traders seeking dollars outside official channels.

• The CBI continues to inject dollars into the system to meet legitimate demand.

• There is no official currency market outside the Central Bank; all other transactions are considered black market or unofficial.

Al-Alaq emphasized:

“The price set by the Central Bank for the US dollar is fixed and does not change, but the developments in import mechanisms have prompted some traders to turn to the black market to buy dollars. These traders will soon return to official channels.”

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Why the Parallel Market Spikes Occur

MNT GOAT explains that temporary fluctuations are orchestrated “hiccups” rather than signs of systemic instability:

• The CBI controls the exchange rate with a 2% allowable fluctuation around the official rate (e.g., 1320 ± 26 dinars).

• Parallel market spikes are short-lived and often triggered by transitional CBI policies, not external shocks.

• Policies are rolled out gradually to prevent sudden crashes or destabilization.

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From Dollar to Dinar: Recent CBI Policy Shift

The CBI is slowly reducing reliance on the dollar, particularly in payments to contractors in the oil sector:

• Payments to oil company contractors are being converted from USD to dinar.

• This major policy change will have long-term ripple effects on the economy.

• Short-term “hiccups” in the parallel market are expected and managed.

MNT GOAT reassures readers that ample reserves and gold backing exist to prevent crashes or devaluation during these transitions.

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Iranian Influence & Devaluation Rumors

Some reports suggest Iran-backed political actors in Iraq are promoting devaluation to exploit financial loopholes.

MNT GOAT warns:

• Attempts to push for a large devaluation are illogical  and contrary to the CBI’s monetary policy.

• Massive shifts in the currency rate could harm Iraq’s economic recovery rather than solve liquidity issues.

• Knee-jerk reactions to minor market hiccups only fuel instability, benefiting black-market traders.

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Q&A Section 

❓ Is the Iraqi dinar being devalued?

No. The Central Bank of Iraq has confirmed that the official exchange rate remains fixed and stable.

❓ Why does the parallel market fluctuate?

Parallel market spikes are caused by traders bypassing official channels and are short-term, unofficial phenomena.

❓ Does the CBI have enough reserves?

Yes. The CBI has sufficient gold and foreign currency reserves to support the dinar and prevent market crashes.

❓ How is the CBI reducing reliance on the dollar?

Recent policies convert payments to contractors in the oil sector from USD to Iraqi dinars, gradually transitioning the economy while preventing destabilization.

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Featured Snippet Summary (Google Discover Ready)

• CBI Governor Ali Al-Alaq confirms no dinar devaluation.

• Dollar exchange rate is fixed and stable.

• Parallel market fluctuations are temporary and due to trader activity.

• The CBI has  ample reserves and gold backing the dinar.

• Gradual policies transition Iraq from USD to dinar payments to strengthen the domestic currency.

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MNT GOAT

What does the CBI have to say about all this talk of a massive devaluation of the Iraqi dinar?

As this last article about the massive devaluation just was published, this next article came out quickly from the CBI and is titled “IMPORTANT CLARIFICATION FROM THE CENTRAL BANK OF IRAQ REGARDING THE DOLLAR”. The Governor of the Central Bank of Iraq, Ali Al-Alaq, confirmed on Tuesday that the exchange rate of the dollar is stable and will not change, noting that the Central Bank does not suffer from any problem with gold and foreign currency reserves, and that they are continuing to inject dollars .

Then another article to back up this first one titled “CENTRAL BANK GOVERNOR: THE DOLLAR EXCHANGE RATE IS FIXED AND WILL NOT CHANGE”. The Governor of the Central Bank of Iraq, Ali Al-Alaq, attributed the fluctuation of the “parallel market” and the rise in the dollar exchange rate to the dealings of some traders, stressing that the dollar exchange rate at the Central Bank is fixed and will not change.

Al-Alaq said regarding the fluctuation against the dinar: “The price set by the Central Bank for the US dollar is fixed and does not change, but the developments that have occurred in the import mechanisms have prompted some traders to turn to the black market to buy dollars.” Al-Alaq added: “These traders will soon return to the official channels to obtain currency, and thus the price will return to its normal level, especially since the Central Bank does not suffer from any problem with gold and foreign currency reserves, and continues to inject dollars, so we have not faced any obstacles in this regard.”

Then al-Alaq, the governor of the CBI said, “We do not have an official currency market (outside the Central Bank), there is only a black market, while the only source of dollars is the Central Bank. As for the dollars circulating in the markets, they are the surplus that is traded among citizens, because the Central Bank does not provide dollars for unofficial or illegal transactions”

I wanted to clarify this news of the suggested devaluation by the Iranian influencers in Iraq to show you just what measures they will go through to destroy Iraq. They will look at every hiccup to use as their excuse to burn-down the economy. This is the fight, the  uphill battle to save the Iraqi economy. You cannot make such huge shifts in the currency rate when these hiccups occur, as these politicians suggest. It is not logical and will do  more harm than good in the overall monetary policy.  

These hiccups are predictable as the CBI is constantly, but slowly, moving away from the dollar to the dinar. Remember too what new policy the CBI just announced. (See my 02/10 Newsletter). In it I showed you the news titled “FROM DOLLAR TO DINAR… EXCHANGE RATE POLICY CONFUSES OIL COMPANIES AND THREATENS THEIR EMPLOYEES!” and how the Central Bank of Iraq’s decision to convert payments to contractors working with oil companies from US dollars to Iraqi dinars. Yes, this was a HUGE move and is going to have rippling effects but knee-jerk reactions are not necessary and things will settle down in time. WOW! WOW! WOW! 

I need all my readers to realize that the CBI still is not fully in control of the exchange rate and as the parallel market does still exists, it has its own rate to circumvent the ‘official’ CBI rate. The CBI must control it within a 2% more or less fluctuation of the ‘official’ rate. It is needed and we have heard this from the IMF in many of the consultation sessions with Iraq. So 2% of 1320 is 26 thus 1294-1346 range. 

The parallel market would have to operate ‘unofficially’ and illegally from 1294- 1346 range which is does in between orchestrated hiccups. The higher temporary spikes are caused by CBI policy and don’t just happen, get it? 

 These policies are being rolled out slowly as not to cause a sudden crash. Note that the CBI rolls out yet another policy to curb the parallel market even more then a short-lived spike. Then the CBI lets it settle down before the next stage. Since the CBI has told us the have plenty of reserves and even gold to back up the dinar there is no worry of a crash during these hiccups.

https://mntgoatnewsusa.com/latest-mnt-goat-newsletter/