[via PDK] Some banking sources Think redemptions may start on Monday…they think this…but do not know for sure. Focus on the fact that we are seeing solid progress…and that things are close. To be honest I am hoping for it to happen this weekend.
Question: hearing that a currency lockdown has occurred. Have you heard this Mark?
MarkZ: No I havn’t…but I am wondering if that is why there is sudden quiet out of Iraqi contacts.
I reached out yesterday and today and am hitting a brick wall. It would not surprise me if a currency lockdown had started in-country.
Question: What is a currency lock-down?
MarkZ: Basically it is where a country locks down borders so people cannot come and go carrying currency…while they handle a “change in value” ….In other words they go dark similar to what Kuwait did for about 10 days.
...I am told we will suddenly see a lot of movement on the removal of sanctions...I expect to see that in the next day or two...
Gold Price Volatility in Iraq: Stability in Baghdad but a Dip in Erbil, 5 OCT
Recent trends in the gold market of Iraq reveal a striking divergence between the nation’s capital, Baghdad, and the capital of the Kurdistan region, Erbil. While Baghdad has seen stable gold prices, Erbil has experienced a noticeable decrease.
Gold Prices in Baghdad
Baghdad’s wholesale markets report steady prices for 21-carat gold, whether it’s of Gulf, Turkish, or European origin. The selling price for one mithqal – a unit equivalent to five grams – of this gold stands at 416,000 dinars, with the buying price slightly lower at 412,000 dinars. The price of 21-carat Iraqi gold remains steady as well, with a selling price of 386,000 dinars and a slightly lower buying price of 382,000 dinars.
When it comes to the retail gold prices in Baghdad, for a 21-carat Gulf gold mithqal, they range from 420,000 to 430,000 dinars. In contrast, for the same weight of Iraqi gold, the prices vary between 390,000 and 400,000 dinars. This stability in both the wholesale and retail markets indicates a stable gold market in Baghdad.
Gold Price Fluctuations in Erbil
In contrast to Baghdad, Erbil has seen a decrease in gold prices. The selling price for 24-carat gold is listed at 390,000 dinars, 350,000 dinars for 22-carat gold, 430,000 dinars for 21-carat gold, and 370,000 dinars for 18-carat gold. This dip in prices in Erbil contrasts the stability seen in Baghdad’s gold market, suggesting a difference in market dynamics between the two cities.
Understanding the Market Dynamics
The contrasting trends in gold prices between Baghdad and Erbil shed light on the complexities of local economies. Several factors could contribute to the stability of gold prices in Baghdad and the dip in Erbil, though the specific catalysts remain unconfirmed. However, these trends highlight the significant role local marketplace dynamics play in commodity economics like gold. They offer insights into the intricate relationship between these commodities and their daily exchanges, contributing to a nuanced understanding of the broader economic landscape across different regions.
Economic Implications
The fluctuation in gold prices in Baghdad and Erbil draws attention to the continuously evolving nature of global economics. It triggers vital discourse on the role of commodities like gold within a regional economy and their broader macroeconomic implications. The contrasting conditions in the gold market between Baghdad and Erbil could significantly shape Iraq’s future economic landscape. The ongoing trends invite speculative intrigue and scholarly debate, reflecting on the dynamic nature of economics in these regions.
Iraq’s Central Bank Aims to Stabilize Economy through Exchange Rate Control, 5 OCT
The Central Bank of Iraq (CBI) is taking active steps to control the exchange rate in the parallel market, also known as the black market, which operates outside the realm of formal economic activities. This move is seen as a response to manage the country’s economic conditions and aims to stabilize the economy, control inflation and encourage legitimate trade.
US-Iraq Discussions on Foreign Trade Financing
Recent discussions between Iraq and the United States have centered around plans to provide technical support for financing Iraq’s foreign trade in other currencies apart from the dollar. The Central Bank of Iraq revealed that the aim of these discussions is to ease demand for the greenback in the local market. Assistant Treasury Secretary Elizabeth Rosenberg and the Governor of the Central Bank of Iraq, Ali Al Alaq, held talks on bilateral relations and measures taken by the bank to fight money laundering and terrorist financing.
Technical support in the field of foreign trade financing through reputable banking channels was also discussed. These channels will use mechanisms that enable legitimate foreign trade financing in different currencies, including the Euro, the Chinese Yuan, and the UAE Dirham. The US ambassador to Iraq, Alina Romanowski, emphasized that progress on international anti-money laundering and banking reform will help combat corruption and support international investment in Iraq.
Central Bank Measures to Control the Exchange Rate
One of the key issues in Iraq’s economy is the flow of the dollar through the foreign currency auction run by the Central Bank of Iraq to countries under US sanctions, including Iran, Syria, and Lebanon. Strict measures have been applied by the Federal Reserve Bank of New York on requests for international transactions from Iraq, which has led to an increased demand for the US dollar on the black market in Iraq, causing a decline in the value of the Iraqi dinar against the greenback.
To counter this, the Central Bank of Iraq has introduced a series of measures to make the hard currency available at the official rate to traders and ordinary Iraqis wanting to travel abroad. However, these measures have failed to control the exchange rate and have only exacerbated the crisis. The Central Bank plans to restrict all internal trade to the Iraqi dinar starting next year, a move that aims to help control the black-market exchange rate.
New System for Foreign Transfers
The Central Bank of Iraq has announced a new system focusing on the execution of all foreign remittances and documentary credits via an electronic platform. This platform allows for meticulous pre-audit checks, verification of the final beneficiary, and safeguards all parties from both domestic and international risks. It also facilitates personal remittances abroad for education, healthcare, personal needs, and retiree salaries for residents abroad through international money transfer companies like Western Union and MoneyGram.
Impact on Iraq’s Economy
These steps by the Central Bank of Iraq could potentially lead to a more balanced economic environment in the country and might have implications for the financial stability of Iraq. It is expected that these decisions will help to curb the illegal flow of dollars, encourage legitimate trade, and stabilize the economy. However, the success of these measures will largely depend on their implementation and the adherence of traders and ordinary Iraqis to the new rules.
TNT call: Everybody is excited again today. Tony was told to expect it any minute. He has been told a 2 hour window but he can’t tell us what it is other than it’s tonight. It won’t be global until the weekend, however, which means Iraq is getting a couple days to make adjustments in their process, although the banks will have the option of which day they want to start.
Economic: Parties within the Central Bank are complicit in the dollar issue
Economic - Parties within the Central Bank are complicit in the dollar issueInformation / Baghdad..
On Wednesday, economic expert Diaa Al-Mohsen criticized the continued fluctuation of the dollar exchange rate and the lack of control over the rise in its value in the parallel market, pointing out the existence of collusion by some parties within the Central Bank regarding the dollar issue.
Al-Mohsen told Al-Maalouma, “The management of the Central Bank is aware of what banking companies are doing in terms of selling the dollar and exploiting passports, but some figures within the Central Bank are complicit in such matters.”
He added, “Collusion within the Central Bank regarding the dollar file is on behalf of some political blocs and banks, and therefore it falls within the category of conspiracy with the aim of putting pressure on the Prime Minister because he is better than his predecessors.”
He stated that “there are attempts by the Prime Minister regarding the dollar file to achieve benefits for some parties,” stressing that “the Sudanese visit to New York and his meetings with US Treasury officials will give him a major boost in the fight against corruption, which will become clear during the coming period.”
“The reason for the dollar’s rise.” Parliament Finance criticizes foreign banks’ control of the currency market
2023-10-04 | 09:54
The reason for the dollars rise - Parliament Finance criticizes foreign banks control of the currency marketToday, Wednesday, a member of the Finance Committee in the House of Representatives, Muhammad Nouri, considered the control of foreign banks over the currency selling market in Iraq as a “dangerous precedent.”
In an interview with Al-Sumaria News, Nouri said, “The control of a large group of non-Iraqi banks over the currency selling market is a dangerous precedent in the Iraqi economic market, given that Iraq has solid private banks that have the potential To operate according to international conditions and standards.”
He criticized the Central Bank for setting “conditions that apply only to foreign banks for selling currency in…IraqIncluding the Jordanian National Bank, which now accounts for a large percentage of dollar sales in the currency auction,” indicating that “what the Bank of Jordan sells in one day amounts to more than 200 million dollars in one day.” Nouri pointed out that “at a time
when We suffer from a lack of cash flow, where the dollar goes abroad,” stressing that “there is unorganized work insideCentral Bank of IraqAnd an unregulated work mechanism, an unreal submission mechanism, and an unreal set of controls and conditions controlled by non-Iraqi banks,” indicating that “the Iraqi Central Bank’s procedures serve foreign banks and those behind them from entities trying to control the currency market inIraq
He stressed, “The facilities granted to foreign banks are the main reason for the dollar’s rise, given that no one can obtain what is offered in the market except this narrow group of banks and through agreements made in secret with the Central Bank,” noting that “the existence of … The difference of 25 numbers between the standard and real price of the dollar is a problem caused by the Central Bank and its routine procedures.”
Observers wonder about the parties behind the issue of a Jordanian bank acquiring 70% of the currency auction atCentral Bank of IraqAt a time when Iraqi banks are being punished or threatened with punishment if they demand their rights.