Thursday, October 5, 2023
Iraq's Central Bank disproves Reuters report, affirms accuracy of dollar deposits policy, 5 OCT
Iraq's Central Bank disproves Reuters report, affirms accuracy of dollar deposits policy, 5 OCT
Shafaq News/ The Central Bank of Iraq emphasized that citizens' deposits in U.S. dollars within Iraqi banks are a guaranteed right. This assurance followed recent reports that raised uncertainties about the safety of these deposits.
In a statement, the Central Bank clarified that certain remarks attributed to Mazen Sabah Ahmed, director-general of investment and remittances at the Iraqi Central Bank (CBI), in a Reuters report, were inaccurately presented.
According to Ahmed, "The Central Bank guarantees dollar deposits. Citizens who have deposited their money in U.S. dollars with any Iraqi bank, whether previously or by 2024, have an inherent right to receive these amounts in cash and U.S. dollars."
Contrary to some media interpretations, the statement reiterated that there was no indication of an anticipated exchange rate reaching 1,700. Ahmed clarified that the Central Bank has practical tools to minimize differences between exchange rates. Furthermore, he revealed that ongoing measures are being implemented to reduce these discrepancies, ensuring a more stable financial environment.
Ahmed highlighted the ongoing reforms and stressed that the Central Bank's initiatives align with international compliance standards. These reforms aim to prevent the unauthorized acquisition or speculative use of the U.S. dollar while enhancing the transparency and integrity of the Iraqi banking system.
Ahmed specified that the announcement of January 1, 2024, as the date for ceasing cash withdrawals, pertains exclusively to transfers received from outside Iraq under specific arrangements. This measure is designed to ensure the sustainability of business operations and does not impact citizens' dollar balances in any way.
Earlier, Reuters reported that Iraq will ban cash withdrawals and transactions in U.S. dollars as of January 1, 2024, in the latest push to curb the misuse of its hard currency reserves in financial crimes and the evasion of U.S. sanctions on Iran, a top Iraqi central bank official said.
Reuters quoted Ahmed as saying that the move aims to stamp out the illicit use of some 50% of the $10 billion that Iraq imports in cash from the New York Federal Reserve each year.
"You want to transfer? Transfer. You want a card in dollars? Here you go; you can use the card inside Iraq at the official rate, or if you want to withdraw cash, you can at the official rate in dinars…But don't talk to me about cash dollars anymore." Reuters quoted Ahmed saying.
"RV UPDATE" BY FRANK26 & WALKINGSTICK,5 OCT
Frank26
We see the evidence of the financial international transactions on the 28th. We see the private banks opening with Aki [Guru Walkingsticks Iraq bank friend in the US- October 1st]. We see Independence Day [Tuesday October 3rd]. The only thing we're not seeing is the HCL. Why? Let me ask you something. Did they release the new exchange rate? No. What did I tell you? The moment you see the HCL in the next nanosecond you will see the new exchange rate...
[Boots on the ground SuperGirl in Erbil Update] I spoke with Dyaa and his family, so far no one has received anything nor have they heard anyone receive anything concerning the HCL... FRANK: We are hearing it from many sources but we believe they are just rumors. They mentioned they may be doing traunches but we have not seen any evidence of it yet.
WalkingstickIraqi PM and NGM Leader Shaswar Abdulwahid Discuss Salary Distribution for Iraqi Kurdistan Employees, 5 OCT
Iraqi PM and NGM Leader Shaswar Abdulwahid Discuss Salary Distribution for Iraqi Kurdistan Employees, 5 OCT
In a recent meeting, Iraq’s Prime Minister Mohammed Shia Sudani and Shaswar Abdulwahid, the leader of the New Generation Movement (NGM) of Iraqi Kurdistan, debated the issue of salary distribution for employees of the Kurdistan Regional Government (KRG). This comes after a proposal by Abdulwahid to distribute salaries to the KRG employees via TBI Bank, a solution that could potentially resolve the ongoing issue that was also discussed in their previous meeting two months ago.
The NGM Faction, along with several other factions in the Iraqi parliament, have recently sent a letter to the central government, arguing that the salaries of employees should not be politicized and should be sent on time. This signifies a growing consensus among different factions within the Iraqi parliament to address the issue of salary distribution in a fair and timely manner.
Government Response and Recent Developments
The federal government of Iraq has responded by announcing a decision to provide more funds to the administration of the semi-autonomous northern Kurdish region. This decision came after Prime Minister Masrour Barzani of the KRG visited Baghdad to request for more funds to be released to the region, which is currently experiencing a shortfall in revenue.
According to a statement from the federal government, it plans to disburse 2.1 trillion dinars (approximately $1.6 billion) to the region. These funds will be paid in three installments of 700 billion dinars each, more than $530 million, and will be loaned by three state banks and reimbursed by the Ministry of Finance in Baghdad. This amount will cover the salaries of employees, social welfare recipients, and retirees.
Stressed Relations and Economic Stability
However, this financial decision comes amid rising tensions between the Kurdistan Democratic Party (KDP) and the Patriotic Union of Kurdistan (PUK), two major parties within the KRG. These tensions, which have led to boycotts and public criticisms, threaten the economic and political stability of the Kurdistan region. The PUK has accused the KDP and the KRG of withholding payment of salaries and punishing the Sulaymaniyah region, which is under PUK control.
Furthermore, disagreements over the allocation of the Kurdistan Region’s budget and income between the KDP and PUK have exacerbated these tensions. The KDP argues for payment of salaries and budgets based on each governorate’s respective incomes, while the PUK suggests a more equitable distribution of all income from the Kurdistan Region to all regions as needed.
Implications for the Future
The ongoing disputes and financial challenges within the Kurdistan Region of Iraq have significant implications for the region’s future. The PUK’s grievances regarding budget cuts from the KRG, which have left PUK-controlled areas unable to pay for government and security forces’ salaries, highlight the urgent need for a resolution to these issues.
Moreover, the unresolved disagreements between the central government of Baghdad and the KRG pose considerable obstacles for the KRG’s oil sector, the main source of the region’s income. The decision by the Iraqi Federal Court to declare the entire oil operation in the Kurdistan Region of Iraq as illegal has added to these challenges.
As the Kurdistan Region navigates these complex issues, the decisions made by its leaders and the central government of Iraq will have lasting impacts on the region’s economic stability, political unity, and the livelihoods of its citizens.
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.
Evening News with MarkZ 10/05/2023
TIDBIT FROM CLARE, 24 NOV
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Bank appointment for Currency EXCHANGE Instructions/Checklist Bank Name_________________________________________ Bank 800#____________...
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Walkingstick All these meetings that the CBI had with all these agencies that were helping them with their monetary reform are done. Al...