The black market dollar will collapse in a very short period - a government statement
Fadi Al-Shammari, political advisor to Prime Minister Muhammad Shiaa Al-Sudani, said that the exchange rate on the black market will collapse within a short period, stressing that the steps of the government and the central bank will raise the value of the dinar.
Al-Shammari in an interview with the journalist Ahmed Mulla Talal:
Trade with Iran requires $15-20 million per day, despite the sanctions imposed on it, and this is one of the pressures on the government.
There is a government approach and semi-agreement with the Iranian side to establish a platform regarding trade dealing between the two countries in other currencies.
There are also other “pressures”, represented by 20-25 million dollars related to the orders of small merchants.
The dinar is fluctuating now, but it will inevitably be stronger according to the paths and decisions taken now at the Central Bank.
We are going towards the strength of the dinar, and there will be a collapse of the exchange rate on the black market, and within a short period. link
CENTRAL BANK GOVERNOR: WE AGREED WITH AMERICA TO LEAVE THE ELECTRONIC PLATFORM AT THE END OF THE YEAR, 29 NOV
Coordination with the Treasury and the Federal Reserve
Today, Friday, the Governor of the Central Bank of Iraq, Ali Al-Alaq, announced the start of importing dollars into the country through the accounts of Iraqi banks abroad, and while he indicated the end of the procedures for opening accounts in the UAE dirham and the understanding with Turkey to make transfers in the euro or the Turkish currency, he revealed a broad plan to reform and develop private and government banks.
Meeting with the US Treasury and the Federal Reserve
Al-Alaq said in an interview with the official agency, followed by the 964 network , that “the Central Bank of Iraq is in constant communication with the US Treasury Department and with the US Federal Bank,” indicating that “this communication continues permanently, and there are quarterly meetings held to review all related matters within the framework of this relationship.”
He added, “There is a meeting that will be held at the beginning of next month as part of the periodic quarterly meetings held between the Central Bank, the Federal Bank, and the Ministry of Treasury, where in these meetings we review all matters with emphasis and focus on the issue of regulating external transfer in a way that ensures the safety of the financial system, especially after the implementation of the new transfer system.” external, which requires a lot of coordination.”
He stated that “these developments that have occurred are radical and not formal developments within the framework of reorganizing trade on sound foundations and organizing external transfer on sound foundations,” explaining that “the details related to this issue require coordination and joint cooperation between the Central Bank and those parties.”
He stressed that “the next meeting will be in the Emirati city of Dubai,” pointing out that “there are quarterly meetings in addition to emergency organizational meetings or communications via phone or video.”
Agreement to strengthen banks with dollars
He stated that “the Federal Bank agrees with the Central Bank on the need for them to be removed from the process of conducting the executive aspects of the external transfer, and their role is limited to supervision and control, and this is normal in central banks that do not exercise these executive roles or detailed operations with regard to external transfer, and therefore the plan was the agreement between us is for the Central Bank of Iraq and the Federal Bank to exit these procedural processes,” stressing, “a plan has been developed to shift the external transfer process from the electronic platform that will be completed at the beginning of next year.”
(This is where the article gets good. They plan to halt shipments of dollars to Iraq by the US Treasury from the ongoing shipments they currently service of dollars from the currency auctions which is now what they call the “platform”. Do you know how good this news is? )
He pointed out, “Creating a new relationship between Iraqi banks and internationally accredited correspondent banks abroad, where the process is confined between them, and the role of the Central Bank of Iraq and the US Federal Reserve is the process of monitoring and supervision, and we began some time ago trying to find a relationship between correspondent banks and our Iraqi banks.”
Opened more than 40 bank accounts
He stated: “We have greatly succeeded in this context, and we were able to open more than 40 accounts for Iraqi banks with correspondent banks or abroad.”
Diversify Currencies
He stated, “To increase flexibility and facilitation in the external transfer process, we have diversified the currencies in which transfers are made abroad, and we now have transfers in addition to the dollar, euro and UAE dirham.”
Understandings for making transfers through Turkish banks
He stressed that “the procedures have been completed for opening accounts in the dirham, the Chinese yuan, and the Indian rupee,” pointing out that “there are preliminary understandings with the Turkish side to make transfers through Turkish banks in the euro or the Turkish currency.”
He stated that “this issue is important and is being conducted in coordination with the Federal Bank and the US Treasury, and they are helping us in this,” noting that “this is the opposite of what some understand as an escape from the pressures of the Federal Bank regarding the dollar, as these currencies are covered by the dollar and we buy them from the dollars in the bank.” The Federal Bank, which is not far from the Federal Bank, but rather with the coordination and support of the Federal Bank, as it wants to reach with us the desired goal, which is to have a relationship between Iraqi banks and correspondent banks.”
He stated, “This is happening for the first time by opening this number of accounts for our banks, and it is a very important step to strengthen the banking system in Iraq, because accepting these banks means that they now have systems capable of being accepted internationally,” explaining that “any correspondent bank currently accepts By opening an account with an Iraqi bank after ensuring that this bank has the necessary systems, standards, conditions and rules under which it operates.”
Completion of work on the electronic platform
Al-Alaq confirmed that “this will lead to the end of work on the electronic platform in 2024,” explaining: “We have reached an advanced level, and with the completion of the other episodes, we will leave this method.”
He stated, “In this case, operations will be faster, easier, and more disciplined, because these internationally accredited correspondent banks have complete systems for conducting audit and monitoring operations before implementing this operation.”
Processing rejected transfers gradually
Al-Alaq pointed out that “this will gradually reduce the percentage of rejected transfers,” pointing out that “rejection of transfers has reasons, but the banks and transferring persons will learn the conditions and points that must be taken into account when submitting a transfer request, as there are formal issues, for example, coding and numbering, and there are documents.” What is required and reviewed by the final beneficiary is that there be well-known companies, reasonable prices, etc., and over time the importer or the person requesting the request gets used to adapting or providing the requirements for the transfer.”
The fact that the American side reduced the amount of dollars
He stated, “The Federal Reserve and the US Treasury respond to all requests related to the process of providing and strengthening the dollar Iraq needs by following sound rules and standards for the movement of funds,” explaining that “this serves the interest of the two countries and rids the financial system of any suspicious operations such as money laundering and terrorist financing operations, so money What is available abroad is Iraqi money that has no restrictions, but there are requirements and standards, whether it is in the dollar currency or even if it is in European currencies or other currencies, and these have become among the required rules in all cases.”
He continued, “Some believe that if this money were in another country, it would be without restrictions, but these have become international standards followed, even if it was in euros, yuan, or pounds sterling, and there will be the same business rules.”
Expanding the diversification of foreign transactions for all Iraqi banks
He stated, “Our goal is that all banks must have correspondent banks, and we emphasized this issue years ago, as a bank that does not have correspondent banks cannot carry out its real work and is cut off from the world,” explaining that “some banks are late to this.” There were easy methods available, so some did not bother to work seriously on this issue, but now all banks have realized that there is a necessity, so they began to intervene successively.”
He continued: “All that provides the bank is the correspondent bank’s belief that it has the system required to control the movement of funds, provide conditions, and follow international standards, and the presence of a monitoring system on the issue of money laundering and terrorist financing will enter this field,” noting that “some banks have begun seeking the assistance of specialized international companies.” To organize these aspects until they become qualified.”
Import of various currencies comes into effect
He pointed out that “import operations in various currencies have entered into force. For example, they were initiated some time ago with the Chinese side and the euro, and the UAE dirham will begin next week.”
We aim to reduce the demand for the dollar
He stated, “These measures aim to reduce the pressure on the demand for the cash dollar, as we want all importers to carry out import operations through fundamental external transfer, but some trade in Iraq does not follow this path, but rather goes to put pressure on the dollar cash present in the market.” Therefore, the imbalance occurs in the price, that is, it results from the presence of groups that put pressure on the cash exchange, while there are correct and fundamental procedures for transfer available,” declaring, “We are working with the government to eliminate the episodes that put pressure on the cash exchange rate, and we found a group of categories, for example, some deal with the cash dollar inside Iraq, the government issued a decision not to deal in the dollar locally. As for the second class, they are the merchants who import some materials and do not enter the platform or transfer in the proper manner, as we began to analyze these categories, such as the cigarette trade, which takes the dollar from the market by 100 percent, as well as We began to analyze the materials that enter Iraq, such as some mobile phones and other materials. A decision was issued stating that these materials must have proof that they entered Iraq based on a formal external transfer. If these goods do not carry an official formal transfer, this means that they are goods that entered illegally. “.
Follow the market
He stated, “There will be follow-up operations in the market, and even in the warehouses, to ensure that these materials enter based on an official transfer so that we keep them away from pressure on the dollar cash market. We will expand this to other categories, and any category that we find is carrying out non-fundamental transfers or by paying… Cash, we will besiege it.”
Iraqi remittances in dollars
He pointed out that “the general principle is what was approved by the Council of Ministers that trading or payment inside Iraq is in dinars, but there are cases that are being studied at the present time, and there was a meeting in the Ministry of Planning regarding contracts in their various forms and how to make payment options, whether in dinars or dollars.” A group of proposals were put forward and we are now studying them,” noting that “some types of contracts or obligations with foreign companies previously will continue to be dealt with in dollars, and we are studying other cases to develop the best or most appropriate method for them.”
He pointed out that “in the past, inward transfers did not matter to the beneficiary if they were given in dinars, but now, because of the price difference, it is a temporary solution and we are working to solve the problem radically.”
The mechanism for private banks importing dollars
Al-Alaq announced the start of importing dollars into the country from the accounts of Iraqi banks abroad, explaining that “the supply of dollars from abroad comes from what is in the accounts of Iraqi banks abroad. For example, we have an account in a bank, so we can withdraw it in cash or a check, and it is transferred in cash, and it has interest on it.” That the amounts come internally instead of externally.”
He explained that the Central Bank’s instructions will not allow the bank to keep a large amount of foreign currency abroad, as there are certain percentages, in addition to preventing misuse of this currency coming into the country, and we have set rules for its use.”
He warned that “the Central Bank is studying the request of the bank that supplies the dollar and its needs before giving approval and verifying the source of the amount and even the transporting company, in addition to verifying the uses of this amount.”
He pointed out that “because of the price difference, there was pressure on banks to withdraw their balances or transfers received from the dollar, which led to some banks becoming scarce in the currency,” explaining that “foreign currency can be available in more than one way, not only through the central bank, We seek to deepen this practice.”
He stated: “As long as our Iraqi banks have balances abroad in foreign currencies, it is better for us to enter it, and this supports the reserves in the central bank, that is, instead of the bank using its foreign currency reserves, the currency will be available from the banks’ accounts, and this is an important point.”
A study to restructure banks in Iraq
Al-Alaq stressed that “there is a broad reform plan for private banks with mergers and correction operations in some of their situations, and there is a broad plan for government banks, some of its details will be announced, and we are working with Prime Minister Muhammad Shiaa Al-Sudani on this matter,” pointing out that “government banks represent the largest weight in the sector.” Banking, and we must put it in the best possible way.”
CONCERNS ABOUT THE DINAR.. WHAT IS THE BENEFIT OF IMPORTING THE DOLLAR FROM OUTSIDE IRAQ?
Continuing controversy in economic circles after the decision of the Central Bank of Iraq to import the dollar from outside Iraq according to certain controls, and the purpose of this decision and the possible benefits, in light of the continuing dollar crisis with measures to restrict its circulation outside government platforms.
Importing the dollar from outside Iraq raises controversy among economic circles.
(Yes, Change is hard to take! )
On November 8, the Central Bank allowed Iraqi banks to “import foreign currency” for the purpose of “meeting the requests of companies, organizations, bodies and individuals working for foreign companies or institutions,” by importing it from “exclusively through air ports,” in an attempt to control … Dollar crisis in Iraq .
Immediately after that announcement, leaks continued, transmitted by the government news agency, citing sources that did not indicate her job or the entity for which she worked, starting with “intensive meetings between a delegation from the Central Bank of Iraq and the American side responsible for foreign transfer operations to cover imports” in the Emirati city of Abu Dhabi. It concluded with several decisions, including “an agreement to enhance the advance balance of five Iraqi banks in their dollar accounts with Jordanian banks and transfers via (JP Morgan).” Then I talked about an agreement on five more through Citibank.”
Is there a benefit from importing the dollar?
The Central Bank’s decision to import the dollar from outside Iraq came in the context of the rise in the exchange rate of the dollar against the dinar in local markets, until it reached 167 thousand dinars per 100 dollars a few days ago, compared to the official price that was set at 132 thousand dinars per 100 dollars, before it fell to Around 160k at the moment.
Ahmed Saddam, professor of economics at the University of Basra, explains, “The Central Bank’s decision to allow the import of the dollar aims to raise the level of the supply of the dollar from sources outside the framework of the Central Bank in a new attempt to reduce the dollar exchange rate in the parallel market . ”
(In other words the dollar does not come out of the CBI reserves. Get it? It is not stealing from the CBI anymore if they steal the dollars. It will be stealing from the local banks directly. So do you think the banks are going to be more carful with use of these dollars? Just asking…… )
As for the consequences of importing the dollar at the practical level, Saddam rules out that the decision will achieve a “tangible benefit,” and the main reason, in his opinion, is that “most countries in the world impose restrictions on the exit of the dollar from their markets, just as Iraq is trying to do.”
Economic experts spoke about the benefits of the recent decision of the Central Bank of Iraq regarding importing the dollar currency from abroad, or not the economic expert, in an interview with “Ultra Iraq”, raises a second issue in this regard, through questions such as: “In what currency will this dollar be purchased? Will it be in the Iraqi currency?” He goes on to say: “The Iraqi currency is not accepted in most countries except Iran, which does not It absolutely allows the dollar to be sold due to its urgent need for it, as is known.”
Saddam continues his questions: “Do Iraqi banks own the currencies of other countries so that they can be exchanged for dollars?” And he answers: “If we assume that Iraqi banks own the currencies of other countries , then this measure will be temporary due to the exhaustion of existing foreign currencies for the purpose of purchasing the dollar within the short term.”
Indeed, among the news reported by the official agency, the “sources” spoke of meetings between “ one of the Emirati banks, the Central Bank of Iraq, and the American side, to implement a mechanism for enhancing balances in the UAE dirham for Iraqi banks (UAE Dirham pilot),” as well as “negotiations to enhance the balances of some Iraqi banks in euros at UBAF Bank to finance trade with the European Union,” as well as “increasing the number of banks whose balances in Chinese yuan are enhanced through the Singapore Development Bank,” and “beginning to open bank accounts in Indian rupees for a number of Iraqi banks in the same correspondent Bank.” Singaporean Development.
Economics professor Ahmed Saddam concludes by saying that “the Central Bank’s decision is difficult to achieve on the ground, and perhaps it can be implemented for a limited period by banks that own other foreign currencies,” but all of these measures “will not contribute to reducing the dollar exchange rate due to the state of heavy reliance on the dollar in foreign trade transactions, with the US Federal Reserve’s restrictions, speculation, and smuggling operations that cannot be solved by importing the dollar.”
The central bank is not an intermediary!
Despite this, “government sources” continued to speak to the official agency about proceeding with procedures for importing the dollar from outside Iraq , and the latter on November 15, 2023 quoted a “government source” talking about issuing official approvals from the Central Bank “for three Iraqi private banks.” To import the US dollar to meet their customers’ need for this currency in amounts amounting to $100 million.
The decision to import the dollar from abroad was issued at the request of merchants to feed the local market
The Central Bank’s approach is not considered a new measure, as the advisor to the Iraqi Banks Association, Abdul Rahman Al-Sheikhli, says, as “it was previously implemented in 2010 under the direction of the Central Bank,” but what is new now, according to Al-Sheikhli, is that “the decision was issued based on the desire of traders from… In order to meet the needs of the local market.
The banking expert believes in an interview with “Ultra Iraq” that “the central bank will not be an intermediary in the process of importing the dollar, but rather the banks will play this role in their relations with banks outside Iraq, relying on their reserves of the dollar.”
The Central Bank’s exit from the mediation process comes despite its official statements rejecting the existence of the “parallel market” under the pretext that it – that is, the bank – is the only source of dollars in the country.
Refund, not import… and fears for the dinar.
A few days ago, news from the “Sources” news series reported an announcement about the arrival of a shipment from one of the three private banks to Iraq as part of the operations of “importing the US dollar,” but the advisor to the Iraqi Banks Association, Abdul Rahman Al-Sheikhli, says that “the entry of the dollar from abroad will generate competition in transactions.” The street, in addition to the current fears that precede this step about its negative impact on the limited monetary supply of the dinar in Iraq.”
“The process of importing the dollar from abroad in this announced manner,” according to the expert, “is dominated by a state of ambiguity in the application,” as Al-Sheikhli raises the same question raised by economics professor Ahmed Saddam, about the way to buy the dollar from abroad and pay its value in dollars.
Economists describe the process as recovery, not importing the dollar from abroad. He points out that “the clear process for this issue will be called the recovery of dollar funds belonging to companies or banks abroad, and not the import of dollars, and therefore the funds will enter through an accounting process through bank accounts and not a cash process.”
He adds: There is also a government proposal, which is that the funds of foreign parties, including companies and others operating in Iraq, will be paid the amounts due to them in their accounts outside the country and not inside, and therefore these companies may want to bring their funds into Iraq, and they will go towards recovering those funds and not importing them as announced.
The parallel market, the federal market, and the central “palaces”.
The parallel market is still working according to local stock market indicators, and the Central Bank has not yet limited its measures to stopping it, at a time when Prime Minister Mohamed Al-Sudani says that what is happening in the currency market “is not a crisis, but rather a battle between the state that insists on implementing procedures for building a banking system.” Sober, and speculators.”
In any case, the dollar exists in the parallel market so far, and it is of two types, according to the advisor to the Iraqi Banks Association, Abdul Rahman Al-Sheikhli, “The first is legitimate, and the second is through acquisition.”
In the details of this, he says, “The cash dollar is now officially available to travelers, students, and those who wish to receive treatment outside Iraq, while the reality requires more than that, by opening other internal sources to give it to citizens,” adding, “But the Central Bank has gone towards opening imports through the ports.” Air exclusively.
The current crisis – according to the banking expert – is borne by the Ministry of Finance , “through its intervention in raising the exchange rate,” which “created a major problem.” Therefore, Al-Sheikhli recommends that the Central Bank “take full independence and exercise its powers to control and stop the dollar crisis,” as the expert believes that the bank “The Central Bank continues to fail in developing radical solutions to some of the ongoing problems.”
Economists hold the Ministry of Finance responsible for the problem and diagnose shortcomings in the performance of the central bank
Speaking about the role of the United States, the advisor to the Association of Banks stresses the need to “take into account the lack of guardianship by the US Federal Reserve over the Iraqi Central Bank , as much as it issues recommendations to clarify the violations occurring in the work of banks.”
According to specialists in Parliament, “US sanctions prevent the issuance of remittances to some merchants wishing to import from Iran, Lebanon, and Syria because the SWIFT system has been stopped there, which leads some merchants to resort to illegal methods to transfer their money and complete their imports.”
The banking expert believes that “the US Federal Reserve is now not delaying dollar transfers, as much as it is auditing them in accordance with international controls and standards for combating money laundering and supporting terrorism, because some banks practice unprofessional actions that have led citizens to hoard hard currency and even the dinar due to the loss of confidence in the banks,” according to Al-Sheikhly.
[lower note tests] are happening now. Where? North [Perhaps Kurdistan] ...He said it's happening right now. In fact he says it's been happening...for about a week...We're looking for any rumors or scuttlebutt in the markets. Look everywhere. We're looking for 6 currencies - 1, 5, 10, 20, 50 and 100. Do we have colors for them? Yes, yellow, green, blue, tan, orange and light red. And coins...they're going to come out with coins too.
It's all about the accounting in order to make the exchange rate easier to transition for the accounting. It's all about...the numbers...once they are done with the accounting, once the rate is at 1000 to 1, stand by.
[Aki Iraqi Bank Friend Update]
Number 1 [Aki’s Boss] has informed Aki the CBI is going to have…’All hands on meeting’ to share the results of a recent CBI meeting. These meetings are continual and only with the banks, no politicians.
These meetings were with all the upper management of every bank in Iraq…IOO they’re talking about the new exchange rate of the Iraqi dinar and the new small category notes…We told you there would be one last rate change on the exchange rate of the Iraqi dinar. Aki suggested to us it would be 1,200 to 1…
WALKINGSTICK: …Look more for 1000 to 1 because when they get there then they can lift the three zeros.
Remember, we started with a MR that led to an RV that leads now today to an RD that will lead to an international float. Now...When it gets to the point of the float, a supply and demand of the Iraqi dinar...will determine which exchange rate of the RV that they cap it at.
[Iraqi bank friend Aki update]How will Aki profit by having these banks ? >By exchanging the Iraqi dinar for dollars. This is a profit for the bank. For Aki...
[Iraqi bank friend Aki update]
How will Aki profit by having these banks? By exchanging the Iraqi dinar for dollars. This is a profit for the bank. For Aki...
The economic reform is blossoming...because the monetary reform was a success...It is due to the security and stability that Sudani and Alaq have created for the reforms.
[Iraqi bank friend Aki update]
When Saddam was removed, many retirees...expatriots...soldiers...citizens left Iraq...A great portion has come to the United States of America therefore these [CBI affiliated] private banks are needed for the reinstatement for the Central Bank of Iraq to re-collect the 3-zero notes that are missing...They turned the private exchange centers into private banks for...the change in the exchange rate of the Iraqi currency.
Masrour Barzani: The regional government delegation is holding discussions in Baghdad to resolve the issue of the budget, salaries, and oil
Masrour Barzani - The regional government delegation is holding discussions in Baghdad to resolve the issue of the budget - salaries and oilShafaq News/ Prime Minister of the Kurdistan Region, Masrour Barzani, confirmed on Tuesday that the regional government delegation, which is visiting the capital, Baghdad, is in discussions to find a radical solution to the differences and outstanding issues between Erbil and Baghdad, represented by the issue of the budget, salaries, and the resumption of Kurdistan oil exports through the Turkish port of Ceyhan.
This came in a speech he delivered on the sidelines of the inauguration of the “Van Steel” rebar factory in Erbil Governorate, which is considered the largest of its kind in the region and all of the rest of Iraq.
Masrour Barzani said in his speech, “We hope that the situation in the Kurdistan Region, Iraq and the region will be safe and stable, and that the differences between the regional government and the federal government will be radically resolved, in order for us to continue our government program in reconstruction and rehabilitation of economic infrastructure.”
He added, “The Kurdistan Region and Iraq in general were in a very difficult situation due to successive wars and conflicts, and due to the misuse of power, and its people were living amidst instability, fear, extreme poverty, and destruction.”
Masrour Barzani added, “Today it is time for us to take lessons from past experiences, and to help and support each other within the framework of serving our citizens and building our country, which needs many years of continuous work in order for us to reach the ranks of developed countries,” stressing that “this is the solution.” The only way to achieve peace, stability, and a radical solution to differences is that if there is a real intention to resolve them, then there are many ways in this field.”
He also pointed out that “the delegation of the Kurdistan Regional Government, in order to solve a group of problems with the federal government that is still pending, is currently in the capital, Baghdad, to find a positive and appropriate solution, especially for budget issues, and the delay in financing the salaries of the people of the Kurdistan Region.”
He explained, “Yesterday the members of the delegation had fruitful discussions, and today they will continue those discussions to secure salaries primarily so that the people of Kurdistan do not pay the tax for mistakes, which unfortunately those who receive those salaries were dealt with inappropriately, and also, on the other hand, to resolve the issue of oil, in which we need to Introducing an advanced federal oil and gas draft law based on the permanent constitution so that we can once again produce oil and resume its export, which will be a gain not only for Kurdistan but for all the Iraqi people.
He continued by saying, “We hope that we will reach a common understanding, and that we will do many better things,” adding, “I believe that what is before us and the commonalities between us are much greater than the differences and problems that exist, and we must all think about the highest interests of the people, that they live in luxury, and put them in the best interests of the people.” Introduction to our programs.
The Prime Minister of the Regional Government concluded by saying: “We hope, together with Prime Minister Muhammad Shiaa Al-Sudani, the federal government he heads, and the ministers of the current formation, that we will work more in various fields and sectors, and that we will be able to take the country to a better and more advanced stage.”
