A Confluence of Financial Fortitude: The Kurdistan Region and the Iraqi Central Bank Forge a Path to Economic Stability, 19 OCT
In the stately halls of Erbil, the political heart of the Kurdistan Region of Iraq, a crucial dialogue unfolded. It was a dialogue that, like a deftly woven rug, promised to intertwine the economic threads of Baghdad and the Kurdistan Region, creating a tapestry of collaboration and mutual growth. The key figures in this discourse were none other than the President of the Kurdistan Region, Nechirvan Barzani, and the Governor of the Iraqi Central Bank, Ali Al-Alaq.
A Meeting of Minds
The meeting, akin to two chess grandmasters contemplating their next moves, centered on Iraq’s financial situation, the exchange rate of the Iraqi dinar, and the Central Bank’s initiatives aimed at achieving financial and economic stability. The dialogue was a testament to the shared commitment towards a unified financial future, a vision that transcended regional borders.
Both parties emphasized the importance of cooperation and coordination among financial institutions in Iraq, the Kurdistan Region, and the Iraqi Central Bank. Their shared understanding underscored the significance of sustaining and advancing coordination and cooperation to promote economic development and ensure financial stability.
Reinforcing Coordination
Prime Minister Masrour Barzani of the Kurdistan Regional Government (KRG) and Governor Ali Mohsen Al-Alaq of the Central Bank of Iraq echoed similar sentiments in their discussions. The spotlight was on banking sector reforms, anti-money laundering efforts, and initiatives to bolster economic stability. Prime Minister Barzani expressed his appreciation for the collaborative support received from both the central bank’s governor and Prime Minister Mohammed Shia’ Al Sudani. He emphasized that the progress of the Kurdistan Region signifies advancement for all of Iraq and serves the collective interests of the public.
Un Ponte Per: A Bridge to Economic Stability
Meanwhile, the NGO Un Ponte Per (UPP) has appointed a new Head of Office in Dohuk, Iraq. The appointee will be responsible for coordinating and supervising the organization’s general cash and account of the projects administered in Dohuk. This role is integral in ensuring compliance with anti-fraud, anti-terrorism, and anti-corruption policies, highlighting the dedication to financial integrity not only at the governmental level but also in non-governmental organizations.
Thus, these discussions and appointments underscore the commitment of the Kurdistan Region and the Iraqi Central Bank to enhance cooperation and coordination in a bid to achieve economic stability and development. The focus on banking sector reforms, anti-money laundering efforts, and economic stability underscores the importance of addressing key financial issues to ensure the well-being and progress of both the Kurdistan Region and Iraq as a whole.
Member: Good morning everyone... I heard that the new BRICS payment banking system starts today.
MZ: That's right...
Member: At Dinar Recaps an economist talked about that in a post this morning.
Member: When can Iraq join the BRICS?...that may be our only chance to see VR.
Member: I wonder if the Israeli war is an attempt by the cabal to stop VR and NESARA/Gesara like 9/11 was.
MZ: That's a very good possibility. It is true that there is a special place in hell for those who are willing to sacrifice so many lives just to be able to control their money supply.
Member: The Federal Reserve is not going to voluntarily give up its power
Member: Mark, I heard we were ready to do VR a week ago on Sunday, but the Deep State started Israel's attack to block it!
Member: However, the White Hats allow them to do that. They are supposed to be the ones in control.
Member: Some days it seems like this will never happen. Depressing. Trying to keep a positive attitude.
Member: This VR has given me multiple personalities. One day I'm positive and giddy and the next I'm frustrated and depressed.
Member: Well... remember that Iraq is the central axis... if you just do it... I think the rest of the world will follow.
MZ: Well... let's get to the news/rumors.
MZ: There are no updates for bondholders today. There is still an expectation that things will turn out well overnight. Starting in Asia and Europe and following our path... Let's see if it happens. It may be a week or two early. I would like to be wrong on this.
Member: So we've gone from "any time"... to a week or two now...?...sigh 🤦🏻♀
Member: If FIAT money will be dead on January 1st, then we are close. Just my opinion.
MZ: I still get conversations from groups hoping to release their funds, but we haven't found a group that has released funds yet. That is why they insist that those rumors that say they have already started are not accurate. I think they are purposely leaking misinformation to muddy the moment.
Member: If it's a quick start...none of them get paid until we start scheduling our appointments, so that's to be expected...in my opinion.
MZ: I still get conversations from groups hoping to release their funds, but we haven't found a group that has released funds yet. That is why they insist that those rumors that say they have already started are not accurate. I think they are purposely leaking misinformation to muddy the moment.
Member: If it's a quick start...none of them get paid until we start scheduling our appointments, so that's to be expected...in my opinion.
Member: I wish we could get a 7.5% interest rate on our savings accounts like Iraq does.
Member: It is up to Iraqi citizens to take their dinars out of the mattresses and deposit them in the bank.
Member: A friend recently traveled home from Brazil. On the Exchange, they asked if you wanted OLD USD or NEW USD. It is "out there" in other countries and is currently being USED! She saw it!.
Member: I wish they had taken pictures...I would love to see some proof that they are real.
Member: I wonder if everyone has it except us in the US?
Member: Many large banks in my area have added "Financial Advisors" to their signs!!!!! That's encouraging.....
MZ: In Zimbabwe: "High-level summary of technical assistance reports" on the implementation of the Basel 2 and 3 capital framework. They are doing a great job updating their banks faster than us. This is very positive news.
Member: Mark and Mods, thank you...you are doing a wonderful job keeping everyone informed and calm.
TRANSLATION IN SPANISH"
Markz
Jueves 19/10/23
Miembro: Buenos días a todos... Escuché que el nuevo sistema bancario de pago de los BRICS comienza hoy.
MZ: Así es....
Miembro: En Dinar Recaps un economista habló sobre eso en una publicación esta mañana.
Miembro: ¿Cuándo podrá Irak unirse a los BRICS?...esa puede ser nuestra única oportunidad de ver la RV.
Miembro: Me pregunto si la guerra israelí es un intento de la camarilla de detener la RV y Nesara/Gesara como lo fue el 11 de Septiembre.
MZ: Esa es una muy buena posibilidad. Es cierto que hay un lugar especial en el infierno para aquellos que están dispuestos a sacrificar tantas vidas sólo para poder controlar su oferta monetaria.
Miembro: La Reserva Federal no va a renunciar voluntariamente a su poder
Miembro: ¡Mark, Escuché que estábamos listos para hacer la RV hace una semana el Domingo, pero el Deep State inició el ataque de Israel para bloquearlo!
Miembro: Sin embargo, los Sombreros Blancos les permiten hacer eso. Se supone que ellos son los que tienen el control.
Miembro: Algunos días parece que esto nunca sucederá. Deprimente. Tratando de mantener una actitud positiva.
Miembro: Esta RV me ha dado múltiples personalidades. Un día estoy positivo y vertiginoso y al siguiente estoy frustrado y deprimido.
Miembro: Bueno... recuerden que Irak es el eje central... si simplemente lo hacen... Creo que el resto del mundo les seguirá.
MZ: Bueno... vayamos a las noticias/rumores.
MZ: Hoy no hay actualizaciones para los tenedores de bonos. Todavía hay expectativas de que las cosas salgan bien de la noche a la mañana. Empezando por Asia y Europa y siguiendo nuestro camino... A ver si sucede. Puede que sea una semana o dos antes de tiempo. Me gustaría estar equivocado en esto.
Miembro: Así que hemos pasado de "cualquier momento"... a una semana o dos ahora...?... suspiro
Miembro: Si el dinero FIAT estará muerto el 1 de Enero, entonces estamos cerca. Solo mi opinión.
MZ: Todavía recibo conversaciones de grupos que esperan liberar sus fondos, pero aún no hemos encontrado un grupo que haya liberado fondos todavía. Por eso insisten en que esos rumores que dicen que ya han comenzado no son exactos. Creo que están filtrando información errónea a propósito para enturbiar el momento.
Miembro: Si es un comienzo rápido... ninguno de ellos recibe pago hasta que empecemos a programar nuestras citas, así que eso es de esperar... en mi opinión.
Miembro: Ojalá pudiéramos obtener una tasa de interés del 7,5% en nuestras cuentas de ahorro como lo hace Irak.
Miembro: Corresponde a los ciudadanos iraquíes sacar sus dinares de los colchones y depositarlos en el banco.
Miembro: Un amigo viajó recientemente a casa desde Brasil. En Exchange, le preguntaron si quería USD VIEJOS o USD NUEVOS. ¡Está "allí afuera" en otros países y actualmente se está UTILIZANDO! ¡Ella lo VIÓ!.
Miembro: Ojalá hubieran tomado fotografías... me encantaría ver alguna prueba de que son reales.
Miembro: Me pregunto si todos lo tienen menos nosotros en los EE. UU.
Miembro: ¡¡¡Muchos grandes bancos de mi zona han añadido "Asesores financieros" a sus carteles!!!!! Eso es alentador.....
MZ: En Zimbabwe: "Resumen de alto nivel de informes de asistencia técnica" sobre la implementación del marco de capital de Basilea 2 y 3. Están haciendo un gran trabajo actualizando sus bancos más rápido que nosotros. Esta es una noticia muy positiva.
Miembro: Mark y Mods, gracias... están haciendo un trabajo maravilloso manteniendo a todos informados y tranquilos.
Iraq’s Central Bank Boosts Foreign Exchange Sales Amidst Global Currency Woes, 19 OCT
In a recent auction for buying and selling the US dollar, the Central Bank of Iraq (CBI) reported a 78% increase in foreign exchange, as its cash sales reached $163 million. The total amount sold in this auction was $199,123,090, with the majority of sales aimed at reinforcing foreign balances via transfers and credits.
Boosting Foreign Balances
The net amount of $163,593,090 funneled into foreign balances marked a significant increase from the cash sales that totaled $35,530,900. The auction saw five banks purchasing cash dollars while 21 others met requests to enhance foreign balances abroad. In addition, 60 exchange and intermediary companies participated in the auction. The exchange rate for all transactions was pegged at 1,305 Iraqi dinars per dollar, applicable for documentary credits, international settlements for electronic cards, foreign remittances, and cash transactions.
The notable rise in foreign exchange sales by the CBI represents an effort to stabilize Iraq’s currency and bolster its foreign reserves. The auction enabled banks to acquire cash dollars, which can be utilized for various purposes ranging from financing imports and facilitating international transactions to meeting the foreign currency demand from individuals and businesses.
The increase in foreign exchange sales comes at a time when numerous countries grapple with currency depreciation amidst escalating global tensions. For instance, the Chilean central bank plans to address its recent currency depreciation in the upcoming monetary policy meeting. The peso has experienced significant depreciation, and long-term interest rates have risen. Such factors will play a critical role in the bank’s decision-making process.
In a similar vein, the Indonesian central bank raised its policy rate unexpectedly by 25 basis points, as the rupiah plunged to its lowest level since 2020. This measure is intended to stabilize the currency and curb inflationary pressures. Meanwhile, the Bank of Israel finds itself under pressure to stabilize the Israeli shekel, which has been weakening against the dollar. Traders have heightened their bets against the shekel, urging the central bank to intervene and stabilize the currency.
Overall, the recent increase in foreign exchange sales by the Central Bank of Iraq mirrors efforts by central banks in other countries grappling with currency depreciation and intensifying global tensions. These institutions are employing various measures to stabilize their currencies and mitigate the impact of external factors on their economies.
[via PDK] Question: What do you still expect as the rate for the dong?
MarkZ: I still expect the low $2 range…$2.25ish. But, most of my sources say it could be more in the $3 dollar range…we shall see.
...They are making certain that everything is conducted in dinar from here on out. For government function they can only use dinar…no other currencies...
Question: Do we need a new speaker of the house before Iraq can move forward?
We are being told that the ball is in Iraq’s court now…so no … Question: ...are we close...just asking for a friend?
MarkZ: I think we are close…It certainly feels close.
I think this is an important piece…. ”Iraq raises interest rates to 7.5% and the economic council is considering raising that rate”
This is not the borrowing rate…this is the savings rate. They are paying 7.5 percent to get you to put your money in the bank. This does a couple things…it shores up their economy, stabilizes the consumer (not the government but the people)
…So in Iraq they are putting the citizen ahead of the government. It also does something else very important. It streamlines any rate changes. With the money in the banks…they are not as worried about the money changers on the street… This makes it easier to do a re-valuation.
Stability Amid Chaos: The US Dollar’s Dance with the Iraqi Dinar,19 OCT
In the heart of Baghdad, where the exchange of US dollars for Iraqi dinars has been a daily ritual for decades, a quiet stability has emerged, a rarity in the tumultuous world of currency markets. The US dollar’s exchange rates held steady against the Iraqi dinar, concluding at 159,800 IQD per $100. This stability was mirrored in the Al-Kifah and Al-Harithiya markets, the central hubs of currency exchange in the capital.
The Dollar’s Dance with the Dinar
Local exchange shops in Baghdad reflected this equilibrium, with selling rates at 160,750 IQD per $100 and buying rates at 158,750 IQD per $100. The calm, however, was slightly disrupted in Erbil, the capital of the Kurdistan Region, where the dollar’s exchange rate experienced a mild climb. Selling rates here were at 160,000 IQD per $100, and buying rates at 159,900 IQD per $100.
In a Central Bank auction, foreign exchange sales surged by 78%, culminating in $163 million in cash sales. The auction witnessed the exchange of $199,123,090 at a rate of 1,305 IQD per dollar, designated for documentary credits and international settlements for electronic cards. For foreign remittances and cash transactions, the rate stood at 1,310 IQD per dollar. A significant portion of the bank’s sales aimed to reinforce foreign balances through transfers and credits, amounting to $163,593,090. Five banks purchased cash dollars, while 21 banks fulfilled requests to boost foreign balances abroad. A total of 60 exchange and intermediary companies took part in the auction.
The Trade Minister of Iraq, Atheer Al-Gheriri, communicated Iraq’s eagerness to augment trade exchange with Saudi Arabia. He underlined the fundamental economic changes sweeping through Iraq and the country’s increasing reliance on the private sector for development and economic growth. Al-Gheriri spotlighted the pivotal role of the Iraqi-Saudi Coordination Council in fortifying bilateral relations and executing projects that foster long-term cooperation.
Despite these developments, the Central Bank of Iraq has been grappling with halting the depreciation of the dinar against the dollar in the parallel market for the past eight months. The struggle to meet the demand for dollars to cover foreign trade, along with restrictions on oil exports, has exacerbated this situation. The electronic platform launched by the Central Bank has not been able to restore stability to the parallel market. Most transfers continue to take place outside the platform, particularly with nations subjected to US sanctions.
In response to these challenges, Iraq plans to prohibit transactions in US dollars starting from January 2024, with the objective of curbing misuse, financial crimes, and currency smuggling. However, apprehensions linger that this measure may worsen the cash crisis and trigger monetary inflation if not executed judiciously.
There have been calls for the Central Bank to adopt a new currency to supplant the dollar. Suggestions include the euro, Chinese yuan, or Emirati dirham. This move could alleviate the pressure on the dollar in the parallel market and offer an alternative for countries facing US sanctions. It is also crucial for the Central Bank to manage the dollar exchange rate and prioritize stability in the foreign currency market. Private banks should be incentivized to provide better services and compete to attract cash hoarded outside the banking system.
The stability of the exchange rate between the US dollar and the Iraqi dinar in Baghdad is a positive development. However, challenges persist in the parallel market and the broader economic situation in Iraq. The country’s efforts to increase trade exchange with Saudi Arabia and implement economic reforms are commendable. The recent bombings targeting US military bases and the calls for the withdrawal of foreign forces underscore the security risks faced by Iraq. The proposed ban on transactions in US dollars from 2024 and the suggestion to adopt a new currency highlight the complexities of Iraq’s economic landscape. The role of the Central Bank in managing the exchange rate and promoting stability, along with the efforts of private banks, will be crucial in shaping the economic future of Iraq.
At the parliamentary table...a movement to dismiss the Governor of the Central Bank by majority
A parliamentary movement to remove the Governor of the Central Bank, Ali Al-Alaq, from his position, after the dollar exchange rate crisis worsened and no radical solution was found, while the citizen looks forward to real action to save his livelihood, which is “at stake.”
The dollar exchange rate witnessed a significant increase, and on some days it recorded a jump against the Iraqi dinar, exceeding the barrier of 164 thousand dinars for every 100 dollars.
Motion for dismissal by majority
Today, Thursday (October 19, 2023), the Parliamentary Integrity Committee confirms that the movement to dismiss the Governor of the Central Bank, Ali Al-Alaq, from his position is continuing, with a parliamentary majority supporting this movement.
Committee member Hadi Al-Salami told “Baghdad Al-Youm” that “the movement to remove the governor of the Central Bank from his position continues with a parliamentary majority supporting this decision,” noting that “more than one official letter regarding this was sent to the Presidency of the Council of Ministers and Parliament.”
Al-Salami points out that "political courtesies and pressures are what hinder the decision to remove the governor of the Central Bank from his position, especially since Al-Alaq failed in his management of the bank and the dollar exchange rates are high and unstable. This has greatly affected Iraq's economic situation, and this is why the dismissal movement will not stop."
Fraud and economic levers
On (September 21, 2023), two independent representatives confirmed that steps were being taken to dismiss the Central Bank Governor due to his lack of control over the exchange rate of the US dollar in local markets.
Representative Ahmed Majeed said during a joint press conference with Representative Hadi Al-Salami, held in the parliament building, that “the rise in the price of the dollar has harmed all sectors of the state and the Iraqi economy, especially the segment of poor citizens in their livelihood and daily needs.”
He stressed that "there is forgery in the receipts that are submitted to the Central Bank through the currency selling window to buy the dollar to import goods, and it is in fact an operation to smuggle the currency outside Iraq, and these banks - which buy the dollar - are economic arms of political parties." link
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Tishwash: Sudanese Advisor: More than 75% of cash is hoarded by citizens
Adviser to the Prime Minister for Economic Affairs, Mazhar Muhammad Saleh, said that more than 75% of the cash liquidity is hoarded by citizens, and that raising the interest rate in banks is “inevitable.” The Federal Reserve Bank, the US central bank, had imposed measures and restrictions on remittances. External finance from Iraq, to ensure that it does not reach Tehran and Damascus.
Raising bank interest rates
Mazhar Muhammad Salih said, “The Iraqi environment is complex, but raising the interest rate in banks is one of the monetary policy tools, through the use of raising interest, and it is considered a return, and thus prepares liquidity for the banking system.”
He pointed out that "this measure is inevitable, and it is an indication of the monetary policy interest rate, meaning that banks will lend and borrow at this rate plus the differences," indicating that "it is assumed that banks will lend at a higher rate, as the interest rate structure will rise slightly to attract deposits and stagnant funds." a little".
“Cash leakage is a common phenomenon.”
The Iraqi Prime Minister’s advisor for economic affairs pointed out that “people’s liquidity is not a new phenomenon, and it has been present since the emergence of Iraqi money, and people’s confidence in dealing with banking institutions is usually weak,” adding: “about 20-25% of banks’ liquidity is.” The rest is hoarded by citizens, and it is called cash leakage, which is a common phenomenon in the Iraqi economy.”
Mazhar Muhammad Saleh noted that “despite the passage of these banking and financial developments, this phenomenon will increase rather than decrease, and this percentage will not budge from its historical indicators,” explaining that “about 75-80% of the liquidity remains inside citizens’ homes, and not in the banking system to be completed.” The income cycle turns from savings to investments,” he said, calling this issue a “problem.”
“In the face of a vast banking system and a private banking sector, this percentage should improve and become more, but banking customs and traditions are still weak,” according to Mazhar Muhammad Saleh, who added, “The people’s deposit insurance company is supposed to protect them from any banking failures, and its role is important, and it must announces itself more widely.
Over $100 billion
As for Iraq's foreign currency reserves, the Iraqi Prime Minister's advisor for economic affairs said, "Iraq's financial position in foreign currency is still considered the highest in its history, and the hundred billion dollars supporting the Iraqi dinar has exceeded."
The Governor of the Central Bank of Iraq, Ali Al-Alaq, announced during the 31st session of the Ministerial Council for the Economy last Monday, raising the interest rate for amounts deposited in banks to 7.5% to encourage citizens to deposit their amounts in banks, and to withdraw the monetary mass outside the banks, while the Ministerial Council for the Iraqi Economy confirmed Study of increasing the interest rate on deposits.
Al-Alaq pointed out that “the exchange rate depends mainly on imports, not on local production, and that the exchange rate in Iraq has peculiarities due to its connection to the price of oil, as it is the largest source of providing hard currency,” explaining that “many factors affect the exchange rate, the most important of which is the leakage The dollar to neighboring countries, and internal dealing in local markets using other than the national currency, as well as the lack of complete control over ports and smuggling.”
Al-Alaq added, “The level of inflation has decreased significantly and that the goods that enter officially are witnessing price stability, because imports are covered by the official price,” pointing to the opening of a special hall for private banks to sell dollars to travelers at Baghdad International Airport, and raising the interest rate for amounts deposited in banks to 7.5% to encourage citizens to deposit their sums in banks, and to withdraw cash from banks.”
In an attempt to control dollar smuggling, the Central Bank issued a number of measures that had no effect in raising the value of the dinar or reducing the large demand for the dollar. The difference between the official exchange rate of 1,320 dinars per dollar and what is sold in the market encourages dollar smuggling networks to Increasing its activity to achieve profits, in addition to the impact of this matter on the daily life of the Iraqi citizen.
A report issued by the International Center for Development Studies, headquartered in the British capital, London, previously warned that the attempts of the Central Bank of Iraq to prevent dollar smuggling have failed, as the price of the dinar continues to decline against the dollar, which exacerbates the suffering of Iraqis and raises the prices of goods.
The report indicated that the Iraqi banking system, instead of being a contributor to the development of the Iraqi economy, has become a major obstacle to growth or attracting investments, in addition to becoming an essential accessory to money smuggling and money laundering networks, as there are a large number of banks that belong to figures close to politicians, parties, and armed militias. It contributes significantly to dollar smuggling and financing foreign trade operations with neighboring countries in exchange for receiving commissions and political support. link
