Iraq’s Central Bank Aims to Stabilize Economy through Exchange Rate Control, 5 OCT

 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.

"RV UPDATE" BY WOLVERINE, 5 OCT

 Bearded_PatriotUSA

Telegram post 
10/4/23

Forwarded from  Wolverine:

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.

https://t.me/Bearded_PatriotsUSA/3690

Economic: Parties within the Central Bank are complicit in the dollar issue, 5 OCT

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, 5 OCT

 “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.

alsumaria.tv

Coffee with MarkZ 10/05/2023

Iraq’s Central Bank Limits Dollar Provision to Local Banks: Economic Implications and Repercussions, 5 OCT

 Iraq’s Central Bank Limits Dollar Provision to Local Banks: Economic Implications and Repercussions, 5 OCT

Banking Shift: Iraq Limits Dollar Access

The Central Bank of Iraq (CBI) has made a notable shift in its policy, officially confirming a decision to limit the provision of cash dollars to local banks. This change is set to become effective from January 1, 2024, as part of an effort to curb financial crimes and the evasion of U.S. sanctions on Iran, according to Mazen Ahmed, director-general of investment and remittances at the CBI.

Each year, Iraq imports $10 billion in cash from the New York Federal Reserve. However, it’s estimated that around 50% of this hard currency reserve has been misused, leading the CBI to take decisive action. This move also aligns with a broader push to de-dollarize an economy that has increasingly favored the U.S. dollar over local notes, due to recurrent wars and crises that have plagued the country since the 2003 U.S. invasion.

Implications for Banks and Individuals

While this policy change is expected to help curtail illicit activities, it also has significant implications for local banks, businesses, and individuals who rely heavily on these banks. Individuals who deposit dollars into banks before the end of 2023 will still be able to withdraw funds in dollars in 2024. However, dollars deposited in 2024 can only be withdrawn in local currency at the official rate of 1,320. This change could potentially impact the liquidity of the banks, their ability to conduct transactions, and the overall financial stability in the country.

Moreover, the parallel market rate of the Iraqi dinar sat at 1,560 on Thursday, roughly 15% percent below the official rate. This discrepancy could cause significant financial strain for individuals and businesses, particularly those that rely heavily on U.S. dollars for their transactions.

International Impact and Responses

This policy change is also likely to attract the attention of international entities dealing with these banks. The United States Treasury and Federal Reserve Bank of New York, for instance, have already banned 14 Iraqi banks from conducting US dollar transactions due to concerns that US currency could be redirected to sanctioned individuals and possibly benefit Iran. This restriction is part of an attempt to stem the flow of United States currency to Iran and other sanctioned jurisdictions, demonstrating increased scrutiny of Iraq’s financial practices.

Looking Ahead: The Future of Iraq’s Economy

The exact future implications of this policy change are uncertain. However, it’s clear that it could significantly alter the economic landscape in Iraq, potentially affecting everything from the day-to-day transactions of individuals to the international financial relations of the country. As the country navigates this change, the focus will likely remain on maintaining financial stability, curbing illicit activities, and managing the delicate balance of international relations.

"RV UPDATE" BY MILITIAMAN, 5 OCT

 Militia Man 

 Where are they going to get all the money to do all this road construction?  Where are you going to get all the money for the water, sewer and all of those things?  Where is that money going to come from when you have an exchange rate at 1310?   

Everybody should be pretty happy to see Iraq is getting ready to be underway... 

 Did they say they were Sovereign?  

According to the Prime Minister at the U.N., yes they did say they were sovereign ...What you can deduce from the bigger picture...Iraq is going international.  You can't deny it.    They're getting ready to do something and we can see that...We're in a really good spot...

There are a lot of projects that are very expensive and they need to have an investment budget to go along with that.  

Why has it been delayed?

  Probably because there's something they're not quite yet ready to expose or they're just about ready to expose.  They're going to have to have an International currency...exchange rate and the country needs to have that final step to sovereignty.