STATUS OF THE RV
First I want to address some more weird news that I feel is not giving the entire picture of what is going on in Iraq with the financial reform process.
These articles can be deceptive if you didn’t already know better and read articles from the past that contradict them.
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 2024 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″.
Meanwhile Iraqi Banking expert, Mahmoud Dagher, on Wednesday said it was impossible for the Central Bank of Iraq to prevent dealing in dollars in the country.
He said and I quote from the article – “The Central Bank cannot prevent dealing in the dollar.
There is nothing in the banking law or in the instructions of the Central Bank that supports this approach”
He claimed they have no right, and dealing in the dollar will continue as dealing with the dinar.
But what does this last statement really mean.
Does it mean dealing in dollars in the hands of the citizen or the banks?
I want add that as investors we read the CBI policy that will begin Jan 1st 2024 and it did not say that there would be no dollars used in Iraq.
What Ali al-Alaq did say as a new policy, is that the banks will still maintain accounts for depositors in dollars.
However, within the country of Iraq, if these dollars are withdrawn from the banks they will be converted to dinar.
This is the end result of the de-dollarization process of 2023.
So, in part Banking expert, Mahmoud Dagher is correct but in part is seems he is barking up the wrong tree in emphasizing to correct something that does not need correction.
The CBI policy was stated very clearly and he should go read it first before publishing such statements.
Such statements only add to the confusion in people’s minds.
We have to be careful in the translation from Arabic to English as meanings are also lost.
Then there is Economist Ziyad Al-Hashemi who said on Wednesday that the financing process for the Development Road Project has reached a dead end, after Iraqi efforts to obtain the investment financing necessary to launch this project faltered.
He added, the latest is the Turkish President’s efforts to persuade Qatar and the Emirates to invest in this project, which seems to have not led to a satisfactory result.
But we know that China has already invested billions into the “Silk Road” project, as we read these articles too in the recent past.
So, we must consider why Turkish, Qatar and Emirates investors do not, as this time, want to invest in this project.
It is not that the project “faltered” but rather they do not wish to compete with China.
Last week we read about the Central Bank of Iraq began covering retailers’ imports from Turkey with tens of millions of euros as an initial payment, in implementation of the banking arrangements agreement concluded with Turkey last week.
This period of news we read news about another country with international payment arrangements made outside of using the US dollar.
So recently the Governor of the Central Bank of Iraq, Ali Al-Alaq, met in Dubai with the Chairman of the First Abu Dhabi Bank Group, Hanaa Al-Rustamani.
During the meeting, according to a statement by the Central Bank, a copy of which {Al-Furat News} received, “it was agreed to launch financial transfer operations between the two countries and to finance trade and imports between Iraq and the United Arab Emirates in the UAE dirham currency (not the dollar) through the First Abu Dhabi Bank, as transfer operations in the UAE dirham began this day, Wednesday.” December 13.”
This is all good news for our investment.
Yes, this may be good for our reinstatement of the dinar process but de-dollarization can be very bad for the value of the dollar throughout the world.
Remember the dollar is the standard of median of exchange throughout the world.
It has helped stabilize the values of other currencies as it was the standard to which all other currencies gauged.
But with the massive debt caused by careless spending, especially during the Biden administration, the dollar is actually worthless with over 35 trillion of national debt.
It is only through the speculation and the petro-backing of the dollar called petro-dollars (selling oil in US dollars) that has kept the dollar a float though its high demand.
But this too the Biden administration seeks to kill, talking now in the latest Summit on so-called climate change, to get off oil as a standard energy supply just decades away.
What does this all mean for Iraq?
Well we already read multiple articles from Iraq pushing the U.S. to release their oil revenue funds from the US banks.
Next will come selling oil outside of the petro-dollar.
Trust me on this one it is coming.
However, one thing they do keep talking about if the reenacting of the Gold standard provisions for currencies.
Is this why the sudden de-dollarization we are witnessing taking place not just in Iraq, but in Iraq is this why they had to get off the sole de facto peg to the US dollar with the dinar?
So, there are multiple reasons why, what is happening in Iraq is happening.
It is just not all about the revaluation.
If it was then where is the currency swap out?
It is mid-December already.
Where are all the articles we were promised would happen with the re-education process to identify the newer lower denominations and explain to the citizens just how the swap out will work?
Then today out pops an article telling us the currency auctions will not end in early 2024.
My Conversation with my CBI Contact 12/13/23:
Recent talk about the disputes going on with the US forces and all the bombings.
This is important I was told.
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.
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.
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.
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”.
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 and 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.
