[via PDK] I am continuing to hear very positive stuff on expectations of a rate change. They are giving us dates from this weekend to sometime in the first week of October.
The Hydo Carbon Law...Its where they share money, profits, revenues from oil-natural gas etc…with the citizens of Iraq including the Kurdish region.
We have been told for many years this is a key piece. And Very soon after the HCL was implemented we were told that we would see the dinar value changes.
I have had some whales reach out to tell me they have a potential for weekend travels. A number of sources believe it’s this weekend and others think between the 5th and 12th of Oct...Just stay calm and know things are quickly moving.
Question: When they announce the new rate in Iraq- will we get the same rate when we exchange?
MarkZ Answer: I am told when we go to exchange and use one of the “qualifying banking centers” in other words has the staff with special training and the special verifying equipment…
I am told our rate is “pre-determined” and we don’t have to pay fees and get better service…all of those things.My bankers still believe there is a bonus to be gained in the rate offered to us because of the “Oil For Dinar” program…and they will be offering us a higher rate.
The Rising Value of the Dollar: A New Economic Dynamic in Iraq, 30 SEPT
The US dollar has recently seen a significant increase in value in the markets of Baghdad and Erbil, two of Iraq’s major cities. The surge in the dollar’s value is a phenomenon that has taken place not just in the stock exchanges but also in local markets across the capital, Baghdad, where exchange shops have raised their selling prices. The exchange rate reached a peak of 156,200 Iraqi dinars for every 100 dollars, a stark contrast to the previous day’s rate of 154,600 dinars for every 100 dollars. This remarkable rise in the dollar’s value is a nationwide trend within Iraq, stirring up concerns about its potential impact on the overall economy.
Central Bank’s Plan to Bolster Iraqi Dinar
While the surge in the dollar’s value is a cause for concern, it’s crucial to note that the Central Bank of Iraq has a new plan to strengthen the value of the Iraqi dinar against the US dollar. This plan includes measures such as reducing the US dollar to the Iraqi dinar exchange rate for travel or internet purchases from 1,470 dinars to 1,465. The bank also aims to help private banks strengthen their foreign currency reserves that are not in US dollars, specifically naming the Chinese yuan, the euro, the Emirati dirham, and the Jordanian dinar. There’s also a provision for selling foreign currencies in government banks for the purpose of travel, medical treatment, and study.
Despite the bank’s efforts, the potential implications of the rising value of the dollar are complex and far-reaching. For Iraqis who are paid in dollars, the devaluation potentially gives them more purchasing power. However, people paid in dinars may lose purchasing power since imports and exports are paid for in dollars. A devaluation also means imported goods become more expensive in the local currency. Given the economic hardships Iraq has experienced, these are critical factors to consider. As the value of the dollar continues to rise against the Iraqi dinar, the impact on the economy and the lives of ordinary Iraqis will become more apparent.
The Economic Challenges of Iraq
Over the years, Iraq has faced numerous economic challenges. Despite several landmark achievements, the country’s quest for economic independence has been riddled with internal divisions and economic uncertainties. The situation has been further compounded by external threats, such as legal and financial constraints imposed by Baghdad’s federal government and the threat of Iranian and Turkish attacks. As a result, the country has had to shift its dependency from foreign aid to oil revenues.
The Kurdistan Regional Government (KRG) has played a significant role in Iraq’s economic landscape over the years. The KRG has experienced its share of economic boom and bust cycles. However, it faces its own set of challenges, including internal divisions, weak institutions, and a lack of a clear vision for its future. The KRG’s economic development efforts have seen it attract significant local and foreign capital, and it has become an important regional trade route and destination. However, the KRG’s economic future is uncertain, given the current economic dynamics, primarily the rising value of the dollar.
The rising value of the dollar in Iraq is a significant economic event that could potentially impact the nation’s economy and the lives of its citizens. While the Central Bank of Iraq has plans to mitigate the impact of this shift, the overall implications are far-reaching and complex. As Iraq navigates these economic changes, close attention must be paid to the strategies used to strengthen the dinar and mitigate the impacts of currency devaluation. The outcome of these efforts will undoubtedly shape Iraq’s economic future.
The Governor of the Central Bank talks about 9 files, most notably the exchange rate and inflation
9/30/2023
Central Bank Governor Ali Al-Alaq revealed the success of monetary policy in reducing the inflation rate in the country, and while announcing the date of abandoning the electronic platform, he pointed to the reasons for stopping the industrial initiative and imposing interest on housing loans.
The Governor of the Central Bank, Ali Al-Alaq, said in an interview with the Iraqi News Agency (INA), followed by “Al-Iqtisad News”: “The Central Bank views the exchange rate as something directly related to the general level of prices in the country, and that the bank has succeeded in covering the needs of importers at the official price.”
He stressed that the monetary policy succeeded in maintaining the general level of prices through the most important indicators of inflation, which witnessed a decline, and this is the main matter that the Central Bank focuses on in the success of its monetary policy.
He added that “maintaining the general level of prices and a low inflation rate indicates The success of the monetary policy, especially after real traders engaged in the conversion process at the official rate, which gave reassurance in the conduct of foreign trade.”
The electronic platform
He pointed out that “the electronic platform witnessed many difficulties at the beginning of its work, which led to the reluctance of some people to enter it,” indicating that “the implementation rate in the electronic platform has now increased from 20 percent to 95 percent, and this gave reassurance that entering the platform provides speed and safety.” . He pointed out that "accessing the electronic platform in the external transfer process spares all parties from the risks of being exposed to local and international sanctions," warning of some merchants who cannot work in an organized atmosphere and are looking for chaos, and that the Central Bank is working to contain this challenge in coordination with the government to besiege it. These are the categories that are being diagnosed and followed up.”
Al-Alaq stated that “90% of the Central Bank’s sales are for the purposes of remittances and external transfers, and they are proceeding smoothly and at the official price (1320), but the problem lies in the cash side, which represents 10% of internal daily sales,” indicating that “ten percent is sufficient.” To meet the needs of travelers, but some are trying to dominate by withdrawing the amount allocated to travelers, which creates pressure and an increase in the cash price, and these parties have been identified as carrying out illegal and criminal operations.”
Al-Alaq revealed the process of developing the cash sales system allocated to the traveler within a system prepared by exchange companies, and it is being developed to fill the gaps, and does not accept repetition and the unreal traveler,” denying that there is a tendency to stop selling cash dollars to travelers, and that the Central Bank has no problem in covering requests.
The correct and legitimate ones are within the categories (travelers - study - treatment - private transfers), as the bank provided this through financial transfer companies represented by (Western Union and Mini Card).”
Direct transfer
He explained that "the electronic platform is now being gradually transitioned to direct transfer between the Iraqi Bank and the correspondent bank, with an international auditing company in the middle, stressing that the Central Bank has cut the 60 percent that does not pass through the platform, but rather is a direct transfer."
Al-Alaq noted that "next year The Central Bank will permanently cease being an intermediary in the process, and the electronic platform will end next year and become direct transfer operations as internationally approved. This is a major shift that will put things on the right path, accelerate transfer operations, and intertwine relations with international banks.”
The truth about Iraq's loss of 27 trillion
He pointed out that “the idea of linking the exchange rate to filling the general budget deficit is an inaccurate view, and that the central bank is responsible for determining monetary policy, determining the exchange rate within the indicators it has, and achieving the goal of monetary policy,” indicating that “the calculation process is for those who say that Iraq will lose 27 trillion.”
The difference between changing the exchange rate is a wrong process, and 30 percent of oil revenues do not enter the central bank, because the Ministry of Finance uses them for external payments, while the second part is that the exchange rate should not be linked to achieving balance in the budget.
US Treasury
Al-Alaq confirmed that “the US Assistant Secretary of the Treasury praised during her visit to Iraq the measures taken by the Central Bank to organize the external transfer process, implement compliance rules, combat money laundering and terrorist financing, and direct coordination between the Central Bank, the US Treasury and the Federal Bank, and there is very great American satisfaction.” In this context".
Penalties on banks.
He noted that “the Central Bank is conducting a review and audit process to diagnose violations on the 14 banks who were subject to restrictions and denial of access to the dollar,” indicating that “the Central Bank indicated the presence of a response and compliance from the 14 banks to the specified standards.”
He stated that "the American side does not restrict the demand for the dollar, and there is coordination regarding cash shipments through an annual agreement on the number of shipments and their dates," stressing that the Central Bank prefers to use non-cash payment tools through the use of cards (Visa and MasterCard), which has recorded a significant increase. During the past months, this is a good indicator that reduces the focus on the use of cash, and reduces the trouble of reviewing companies to obtain cash dollars.”
Regulating trade with Iran
Al-Alaq added, "There are ongoing discussions to regulate the import process from the Iranian side in a way that does not expose Iraq to any problems by violating sanctions and agreements," indicating that "the Central Bank will reach a clear formula in organizing the trade process, especially since part of it is through barter."
He stated that "an agreement was reached to settle the debts incurred by Iraq from Iranian gas imports through a new method through which these amounts are paid."
Adopting new currencies.
He noted that “there is work to adopt the UAE dirham, the Turkish lira, the Indian rupee, and the euro as part of the process of facilitating external transfer by opening direct outlets in the currencies of the countries we deal with,” noting that “the trade balance with India amounts to 3 billion.” Dollar, and there are also high numbers for imports from the Emirates and Turkey.” He stressed that "the Central Bank has reached advanced stages of understanding in adopting the currencies of these countries, which will facilitate the external transfer process."
Campaign to support the dinar.
Al-Alaq said, “The campaign to support the Iraqi dinar is multi-faceted and multi-party. Its goal is the sovereignty of the local currency in internal transactions instead of foreign currencies, which are being limited. There is a gradual transition process within the Prime Minister’s directive to limit dealing in the Iraqi dinar internally, and to oblige companies to do so, which A large percentage of them responded.”
The industrial initiative and housing loans.
Al-Alaq pointed out that “the industrial initiative has not stopped, but the amounts approved for it have been exhausted, and the volume of the loaned initiatives has reached more than 13 trillion dinars,” indicating that “the Central Bank has raised the interest on the housing initiative to 2 percent, and this is a low price compared to other countries.” Globalism".
He explained that "the stated interest does not include complexes that received previous payments, while it includes new complexes." LINK
Al-Fateh: The American decision still dominates Iraq.. What do we need to get rid of it?
Today, Saturday, the Al-Fatah Alliance said that the American decision is still “dominant” over Iraqi political decision-making, and while it confirmed that the country has not fully recovered, it indicated the possibility of removing Iraqi funds from American custody.
The leader of the coalition, Aed Sahib, said in an interview with the Maalouma Agency, “America is putting pressure on Iraq because it has not completely emerged from the UN resolutions, especially since the process of removing Iraqi funds from American custody may cause the loss and seizure of these funds.”
He added, "The Iraqi state's decision has not fully recovered. If we want to compare the strength of the Iraqi decision and Qatar's in dealing with the United States of America, we notice that the latter has a very great advantage, as it possesses large sovereign funds."
The leader of the Al-Amiri coalition explained, “These policies confirm one thing, which is that Iraq has not officially recovered, and the American decision is still dominant and in control of Iraqi political decision-making.”
Sahib said: “We need a long period for Iraq to get rid of these accumulations and control its economic situation away from America.”
The head of the Victory Alliance, Haider al-Abadi, had previously confirmed that America is imposing measures on us regarding the dollar without stopping its smuggling through the banks of Turkey and the Emirates, indicating that Washington considers Iraq a “wall of fate.”
During the current period, America has worked to destroy the Iraqi currency by imposing sanctions on Iraqi banks and banning the dollar under many pretexts, which in one way or another led to a severe financial crisis in the Iraqi markets. link
