Dubai is hosting a meeting of delegations from the Iraqi Central Bank, the Federal Reserve, and the US Treasury, 14 DEC
Today, Thursday (December 14, 2023), the Central Bank of Iraq announced the end of its meetings with the delegation of the Federal Reserve and the US Department of the Treasury in Dubai.
The bank's media office stated in a statement received by "Baghdad Al-Youm", that "the delegation of the Central Bank of Iraq concluded its meetings with the delegation of the US Federal Reserve and the US Treasury Department in Dubai."
He added, "Representatives of the US Federal Reserve and the US Treasury appreciated the efforts made by the Central Bank of Iraq during the year 2023 to achieve compliance with the Iraqi banking system."
He pointed out that "the meetings resulted in a number of agreements related to supporting the policies of the Central Bank of Iraq in its orientation to support Iraqi banks in establishing relationships with correspondent banks and the gradual transition of operations to enhance the advance balance of the accounts of these banks, and this is consistent with what the Central Bank of Iraq previously announced in its plan to gradually reduce From relying on the electronic platform to ending its work within the next year and limiting it to recording financial transfers for the purposes of control, auditing and analysis.”
According to the statement, the Governor of the Central Bank of Iraq, Ali Al-Alaq, confirmed that “the Central Bank is determined to support Iraqi banks, enhance their capabilities and prepare them to work in accordance with international practices,” while the statement explained that “it was agreed and approved by the above authorities to meet the requests of the Central Bank of Iraq for cash shipments for the year 2024".
He pointed out that "the meetings witnessed a number of understandings that aim to build the capabilities of Iraqi banks and enhance their compliance with international standards." link
BANK STORY LADY: ...I got into the wealth department...The lady was very pleasant and nice and she said, ma'am I do have the currency...She explained they should be all set up a week from Friday.
FRANK: I guess it's no secret.
Bank Story Lady: I said I would love to be your customer. You respect me, I will respect you...I asked what would I need to do? She says just come right up in here to this branch office and we'll take care of you.
FRANK: They're ready to do exchange with any foreign currency but they're not ready for the dinar until a week from this Friday.
Bank Story Lady: ...I said I do have dinars, but I do have others...[she says] Yes ma'am we should be ready a week from Friday.
FRANK: They didn't deny the dinar will be exchangeable, they told you we'll be ready for the dinar a week from this Friday...that's the 21st or 22nd...
Parliamentary Budget: 2024 Will Not Stop The Disbursement Of The Tripartite Budget
December 13, 2023 Baghdad/Al-Masala Al-Hadath: The Parliamentary Finance Committee confirmed that the entry into the new year 2024 will not stop the disbursement of funds from the tripartite budget, given that it was approved for three years.
The head of the committee, Atwan Al-Atwani, said that the committee approved a tripartite government budget and there is no interruption in spending and disbursement, given that the approved budget is for (3) years to ensure the continuation of spending and contracting and the continuity of the government’s work throughout its years without faltering, as happened in the past and led to the budget being delayed for more than 6 months.
He added that with regard to the 2024 budget, the committee is communicating with the government while awaiting its schedules, and it is possible to complete the issue as soon as possible with the aim of sending it to the House of Representatives for a vote.
On June 12, the House of Representatives voted on the draft general budget law for the fiscal years (2023, 2024, 2025), after deliberations that began last Thursday.
The value of the current year’s budget amounts to 197 trillion and 828 billion dinars (about 152.2 billion dollars), with a total deficit of 64.36 trillion dinars (49 billion dollars), while the budget items for the years 2023 and 2024 have not been published.
The current year's budget estimates the price of a barrel of oil at $70, with a daily export volume of 3.5 million barrels per day, including 400,000 barrels per day from the Kurdistan region of Iraq.
Iraq is the second largest producer of crude oil in OPEC after Saudi Arabia, with an average daily production of 4.6 million barrels under normal conditions. https://almasalah.com/archives/76102
As you know I try to talk to my Iraqi CBI contact each week on Wednesdays and sometimes also on Saturdays. My contact is a very god friend that I met when I was stationed in Iraq during the occupation timeframe. I trust what my contact says to me. Besides we are getting information first hand from an actual citizen living, working and experiencing everything happening in Iraq without bias or propaganda.
We began our conversation with talk about the disputes going on with the US forces and all the bombings. This is important I was told. Who is conducting the bombings and does the US forces have a right to protect themselves? It was confirmed to me that this is all a movement to rid Iraq once again of US forces. There is lots of propaganda being told to the people about this to get pressure on the government to rid them of the US.
Remember too, the Iranian militia has remained in Iraq post ISIS war. That was over 16 years already since the war ended (2007) and so many look at them now as Arabic, Moslum brothers compared to the western armed forces, at least this is what many Iranian Shia think. Remember there are patriotic Shia and then there are Iranian Shia. This is the middle eastern culture. But even the citizens are afraid (mostly Sunni) of what will happen if the US forces do pull out entirely again. Who will fill the gap this time as there will be a gap and the Iraqi forces are not strong enough yet. It is like a double-edged sword. You can’t have your cake and eat it too. So many Iraqi people are confused.
This time, if the US does pull out, it is widely felt by the average citizen the Iranian Hezbollah militia forces and not ISIS the citizens will fear the most. They walk the streets in their uniforms with arms. They claim they are still here to protect the Iraqi people from ISIS. Really? But, my contact says this is just an excuse to occupy Iraq and a contradiction. Like the US forces, but there are even more Iranians, they too are occupiers. My contact does not understand why the US does not challenge them as occupiers too and put this issue on the table with the government.
Then we changed the subject and talked about the currency reform. I asked about the impact of the confrontations with the US over their military stationed in Iraq. I was told the situation it does impact the progress of the planned events for December as the committee was brought into a meeting with the leadership and told everything was now “on hold”. I know, I know I too was a bit shocked at the news and did not like it. But I know for a fact that January is the best and most opportune time to revalue and drastically change the program rate to an international rate on the global exchanges. But the program rate is already on a pseudo-float within the country.
I asked what the next targeted steps where and I was told that the committee does not even know and were told just to standby and the CBI is going to try to “push” to continue as they are ready for the next step in the process. I was told the IMF is negotiating the new peg for the dinar but to remember it impacts all countries in this new peg not just Iraq. I was told this is close to being completed an should be done this week ending. This lines us up for next week to begin the currency sway out, but they told me it is delayed until further notice. So, at least we now have a timeline when they did plan it and still could do it based on what happens with the US bombing issue. My contact did reiterate that the process now is irreversible” and must go forward. The US had already given assurances they would not back out if the CBI moved ahead. So all I can say is let’s sit tight and watch what does happen in the coming week.
U.S. Support for Israel: A New Low in American Exceptionalism?
The United States’ policy towards Israel and the ongoing conflict in Gaza has ignited a storm of debate, with critics arguing that American support for Israeli actions signifies a significant crisis for U.S. democracy. This crisis, they argue, is comparable in severity to the tumultuous events of January 6, 2021, when the U.S. Capitol was stormed by protestors. Both Democrats and Republicans stand accused of creating a repressive atmosphere where criticism of Israel and support for Palestinian resistance is effectively silenced.
The Crumbling Pillars of American Exceptionalism
Reflecting the gravity of this situation, multiple university presidents have been forced to resign, a turn of events that underscores the crisis in American exceptionalism. In a world that has often looked to the U.S. as a beacon of democratic values, the country’s unwavering support for Israel, despite numerous alleged human rights violations, has raised eyebrows.
The U.S.’ History of Double Standards
Such a predicament is not unprecedented. The U.S. has a storied history of double standards, notably its notorious invasion of Iraq under the false pretenses of weapons of mass destruction. The country’s consistent vetoing of United Nations Security Council resolutions supporting Israel adds another layer to this narrative.
The recent U.S. veto of a cease-fire resolution in the Security Council, juxtaposed against its continued supply of military equipment to Israel, further underscores its perceived complicity in the conflict. U.S. Secretary of State Antony Blinken’s statement that Israel would decide when to end the war, despite escalating civilian casualties, was met with widespread disapproval.
A Thorn in the Side of Global Justice
Turkish President Recep Tayyip ErdoÄŸan criticized the U.S. for its lone veto, positing that a fair world is not feasible with the current U.S. policies. His sentiment echoes a growing global consensus: the U.S. is increasingly seen as an obstacle to a just world, its policy towards Gaza representing a new low in American exceptionalism.
Awake-in-3D: Why Iraq hasn’t Independently Revalued the IQD Higher (Part 2), 14 DEC
On December 13, 2023 By Awake-In-3D
A Pragmatic Analysis of an Iraqi Dinar RV in Today’s Global Financial Landscape
This multi-part article series discusses the following subjects:
Part 1: Iraq’s Dollar Crisis and Lack of Confidence in the IQD Part 2: Why Iraq hasn’t Independently Revalued the IQD Higher Part 3: What Would Happen Today if the IQD was Revalued to $3.00? Part 4: Iraq’s Pivot Towards BRICS and Geopolitical Shift Part 5: A Gold-Backed “PetroYuan” as an IQD RV Solution Part 6: Why Saudi Arabia’s Recent Geopolitical Pivot Matters to Our RV/GCR Part 7: BRICS Alliance and its Potential Gold/Asset-Backed Common Trade Currency Part 8: A Pragmatic and Realistic Base Case for a Meaningful RV/GCR
Here in Part 2, I discuss Iraq’s current peg to the US dollar and the financial challenges they face in order to revalue (re-peg) the IQD substantially higher against the US Dollar and other major currencies in general.
The question arises: why won’t Iraq simply re-peg the IQD at a higher rate, say $1.00/IQD, and potentially open the door for a substantial revaluation?
As Iraq grapples with a crisis of confidence in its national currency, the Central Bank of Iraq (CBI) and the Government of Iraq (GOI) maintain a delicate balance by soft-pegging the Iraqi Dinar (IQD) at 1310 IQD/USD. This peg, held with purpose, acts as a stabilizing force in their evolving economic environment.
The question arises: why won’t Iraq simply re-peg the IQD at a higher rate, say $1.00/IQD, and potentially open the door for a substantial revaluation?
The answer lies in the significant economic challenges that Iraq faces. While the CBI and GOI possess the authority to re-peg the IQD at will, the feasibility of maintaining a higher peg rate becomes evident when considering the existing instability and insecurity within Iraq’s borders (not to mention their current economic situation).
The stark reality is that an abrupt shift to a higher peg rate, such as $1.00/IQD, demands a significant reserve of US dollars that Iraq currently cannot sustain at this time.
According to recent article from al-Sabaah News in Iraq, there are an estimated 100 trillion Iraqi Dinar circulating outside of the banking system (out of a total of 173 trillion IQD in circulation).
Let that 100 Trillion IQD number sink in for a moment…
In order for any currency to maintain it’s valuation against other currencies, the economy of the nation must support that valuation.
Iraq must pull in and destroy the a very large portion of those physical 100 trillion IQD notes in order to re-peg the Dinar to a higher rate. If one looks at Iraq’s current economic situation, their GDP (Gross Domestic Product) is only around $260 billion in USD terms.
This is why Iraq is constantly discussing it’s US dollar problem, the need to bring more IQD into the banking system (in Iraq), and deleting three zeros off of their notes. Yet even deleting three zeros would mean there are still over 173 billion (instead of 173 trillion) IQD in circulation.
Consequently, if Iraq were to RV, they would require a substantially higher GDP, or substantially higher foreign exchange reserves than their current $100 million USD FX reserves they have in the bank.
Understanding these financial constraints provides clarity on why Iraq hesitates to independently revalue the IQD at this time.
The risk of exacerbating instability and compounding the no-confidence crisis at the proposed revaluation rate creates a formidable obstacle. The existing economic landscape demands a cautious approach, prompting Iraq to navigate its economic and currency valuation challenges strategically.
All of this said, the main point is that Iraq cannot just independently RV (float or peg) today as many appear to believe. But there is another path…
While the allure of a higher IQD valuation is enticing, the reality is that Iraq’s financial limitations, coupled with its prevailing geopolitical instability, necessitate a more measured and calculated path for now.
The pivotal question arises: can Iraq sustain a higher peg rate without succumbing to the financial pitfalls described above?
This question underscores the intricate dance that Iraq engages in today as it strives for economic rejuvenation while treading carefully to avoid the certain economic suicide of premature or unsustainable financial maneuvers.
All of this said, the main point is that Iraq cannot just independently RV (float or peg) today as many appear to believe.
There is a path towards a successful and sustainable RV or $3.00 (or higher) for the IQD
Part 3 of this article series specifically addresses a scenario where Iraq independently RV’s at a value of $3.00 per IQD and introduces a likely “existential” solution for achieving this exchange rate.
