Iran: Iraqi Restrictions On Controlling The Dollar Do Not Mean The End Of Trade Exchanges Between The Two Countries, 3 JAN

 Iran: Iraqi Restrictions On Controlling The Dollar Do Not Mean The End Of Trade Exchanges Between The Two Countries

Economy  01-03-2024 1,122 views   Al-Sumaria News – Economy  Member of the Iranian-Iraqi Chamber of Commerce, Hamid Hosseini, confirmed that the Iraqi Central Bank’s law to control the dollar and the announced restrictions do not mean the end of trade exchanges between the two countries or create problems in trade.

Hosseini said, in an interview with Tasnim News Agency, in reference to the recent measures of the Central Bank of Iraq   to deal with foreign currencies: The restrictions imposed after the adoption of this law were in no way a new or unprecedented event in the face of Iranian-Iraqi trade, as they existed from Before in many ways.

He added: Naturally, this law made it difficult to exchange dollars in the markets of this country, which will naturally affect the process of commercial and international exchanges. These restrictions are very similar to the laws on buying and selling currencies in Iran and cannot be considered a complete ban on currency exchange.

A member of the Iranian-Iraqi Chamber of Commerce pointed to the consequences of applying this law on the foreign exchange process for Iranian merchants and businessmen in Iraq. He said: Nothing new will happen after this law, especially in a country like Iraq, where such issues can be easily resolved.

Of course, perhaps export and import expenditures will rise slightly for a short period of time and the business process will face some risks, but it is unlikely that there will be a major problem in trade exchanges.

Referring to the political developments and events in the region and their impact on similar restrictions, this economic activist added: Such issues are generally related to political situations, relations and regional tensions, especially since Iraq is always under pressure from the United States  and is forced to surrender to the demands of the United States  often.

Hosseini expressed his hope that the positive trend of foreign exchange and trade between Iran and Iraq would continue, and he said: In Iraq, many people still do not want to transfer, buy and sell dollars through financial and banking networks or letters of credit and the like, and Iraqi exchange offices are still the main agent. To exchange currencies in this country.

He continued: Given the circumstances that Iraq is going through, there has always been a way to buy and sell currencies in this country, and Iran can continue its trade exchanges with this country in different ways. There is no doubt that despite the adoption of the new law in this country, the window is open for foreign exchange between Iran and Iraq, and the export process must continue in this way.

He believed that Iranian businessmen and merchants should not worry too much about the consequences of the new Central Bank of Iraq  law, because other countries such as Russia, Syria, Venezuela, and others also face similar problems, but they were able to solve them.

In conclusion, Hosseini stressed that the Iranian government and the Central Bank are taking effective steps in this regard by providing more support and solutions for export operations and currency exchange with Iraq.  LINK

EXPECTATIONS THAT THE IRAQI DINAR WILL CONTINUE TO RECOVER AGAINST THE DOLLAR DURING THE NEW YEAR 2024 BY MNT GOAT, 3 JAN

 EXPECTATIONS THAT THE IRAQI DINAR WILL CONTINUE TO RECOVER AGAINST THE DOLLAR DURING THE NEW YEAR 2024

he Association of Iraqi Private Banks raised its optimism about the continued recovery of the Iraqi dinar against the dollar in the parallel market  during the new year 2024, stressing that the recent actions of the Central Bank of Iraq contributed to this rise.

During the past three weeks, the Iraqi dinar witnessed a clear and gradual rise against the dollar, as the exchange rate in the parallel market reached an average of 1,500 dinars to the dollar, after recording a significant decline that reached 1,700 dinars to the dollar in the last quarter of 2023, while the monetary authorities seek Which set an official price for the dinar at 1,320 per dollar, to pursue those it describes as speculators and smugglers of hard currency.

The Association, which is one of the most prominent financial analysis institutions in the country, expected the exchange rate to continue to decline in the parallel market with the continued implementation of the central bank’s agreements with the Federal Bank and several countries to finance foreign trade.

Association advisor Samir Al-Nusairi said in a statement on Sunday evening, “The goals and tasks of the Central Bank focus on financial and banking reform, especially with regard to the transition from the cash economy to the digital economy through the development and deployment of electronic payment devices.”

He praised “the Central Bank’s negotiating efforts that lasted approximately 8 months with the US Treasury, the Federal Reserve Bank, and international banks, and resulted in agreements that allowed the entry of new currencies to deal with foreign transfers, including the Chinese yuan, the UAE dirham, the Indian rupee, the euro, and the Turkish lira.”

He stressed that “these agreements were implemented successfully, which was reflected in the exchange rate and led to its decline.”

The clear improvement in the exchange rate of the Iraqi dinar against the dollar comes after statements by the US ambassador to Baghdad, Alina Romanowski, at the end of last month, in which she affirmed her country’s commitment to providing “US dollar services to Iraq,” in reference to financing the Central Bank of Iraq with its needs of the American currency.

Romanowski confirmed that “many Iraqi banks have now formed relationships with international banks for the first time, which is a positive step in making progress in reforming the banking sector,” adding: “We will continue to provide US dollar services to Iraq in the interest of economic stability.”

For his part, financial expert Riyad Allawi said, “The recovery of the dinar comes due to the decline in demand for the dollar in the parallel market by merchants and importers in general.”

Allawi added to Al-Araby Al-Jadeed that “Iraq’s signing agreements with Turkey, Iran, and China to import in the local currency, in addition to adopting the euro, is a major reason for this recovery,” expecting that “the recovery will continue in the first half of this year 2024, bringing the exchange rate to the market.” The equivalent is 1,400 dinars to one dollar.

The financial expert considered that “the Central Bank of Iraq is moving towards a package of new measures that will contribute to retailers in the car and furniture sectors, for example, abandoning the culture of dealing in dollars, and the continued arrest of hard currency speculation networks is very important.”

He stressed that “the decline in the value of the Syrian and Lebanese currencies in the recent period against the dollar is due to the decline in the arrival of the dollar from the Iraqi market to these two countries as a result of the tightening of transfer and smuggling procedures as well.”

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"Dollar Traps" Are Coming To An End. Parliament Reveals Those Involved In The Fluctuation Of The Parallel Market - Urgent , 3 JAN

 "Dollar Traps" Are Coming To An End. Parliament Reveals Those Involved In The Fluctuation Of The Parallel Market - Urgent

Baghdad Today - Baghdad   Today, Wednesday (January 3, 2024), the Parliamentary Economy Committee revealed those involved in the fluctuation of the parallel market in Iraq, while indicating that the "dollar traps" are coming to an end.

A member of the committee, MP Yasser Al-Husseini, told "Baghdad Today", "We are closely following the file of the fluctuation of the parallel market in Iraq, especially after moving to the electronic platform prepared by the Central Bank to regulate dollar liquidity and prevent smuggling, but on the other hand, there are those who have been reconciled to beating with any organization because it loses its ability to smuggle and manipulate, which drives it to try to confuse the markets by various means."

He added, "Despite the fluctuation in prices, the coming days will bring greater reassurance to traders and all dealers in the capital market in terms of the stability of the exchange rate at good levels, especially with the control measures of the Central Bank, which we hope will increase in its axes."

Al-Husseini referred to what he called dollar traps - in reference to the attempt by some to manipulate exchange rates in the parallel market - is nearing completion, pointing out that "there are corrupt people who live on the chaos of the market in addition to the trade of contraband, including drugs, which are also a competitor in the parallel market," stressing that "the measures of the Central Bank will combat the most important liquidity threads for them."

He continued, "The stability of the dollar exchange rate will push to reduce prices in the markets and this needs some time, pointing out that, the government's entry into the file of securing materials in the markets will push to a wave of greater decline in the coming period.

Since the announcement of raising the value of the Iraqi dinar against the dollar by the Central Bank, the local markets are witnessing trading other than the official rate of the dollar with a difference of sometimes up to 30 points, which necessitated the intervention of the government and the Central Bank with measures to reduce this phenomenon, but to no avail so far, as the exchange rate of the dollar remained high to more than 150 thousand dinars per 100 dollars in the markets and banks of Baghdad and the provinces.

"Dollar traps" are coming to an end. Parliament reveals those involved in the fluctuation of the parallel market - Urgent » Baghdad News Agency Today (baghdadtoday.news)

Wciappetta:  I wonder if the effort to bring to heel the market rate stalls, will this force the CBI to make the next exchange rate adjustment to near 1000 as a dual effort; one to get ready for lower denomination introduction and two, to further prime the monetary pump in its effort to stabilize the market rate? Perhaps not their first thought but it's in the tool box.

Revisiting the 2008 Global Monetary Crisis because it’s Coming Back with a Vengeance this Year BY AWAKE-IN-3D, 3 JAN

 Revisiting the 2008 Global Monetary Crisis because it’s Coming Back with a Vengeance this Year

On January 2, 2024 By Awake-In-3D

In Fiat Debt System Collapse

As we step into a new year, the ghost of the 2008 global monetary crisis still looms large over the fiat financial system.

More than fifteen years have passed, yet the financial earthquake that shook the world in 2008 was never fixed. It was merely “papered over” setting the stage for a grand, catastrophic finale that will bring down the great global fiat currency debt system experiment which began in 1971 (when the United States ended it’s peg to gold).

The 2008 crisis wasn’t just another financial downturn; it represented a seismic shift that transcended the confines of specific assets or sectors.

Unlike an asset bubble like the 2000 dot-com crisis, which primarily affected specific industries, the 2008 meltdown was a global monetary catastrophe.

It went beyond the devaluation of a few assets; even fundamentally sound assets had to be repriced lower due to a severe shortage of cash to purchase them. This scarcity of funds led to a worldwide liquidity crisis, impacting the circulation of money throughout the international financial system.

What made the 2008 crisis different was its global character. The crisis extended beyond the United States, affecting the global financial landscape through the Eurodollar market.

The Eurodollar market, despite its name, is not about Europe; it involves the circulation of US dollars outside the United States and played a pivotal role in the crisis. The shortage of dollars in this international market had a far-reaching impact, leading to a liquidity crisis that affected the worldwide circulation of money.

European banks were ensnared in this dollar shortage, resulting in a tidal wave of fund outflows, which went beyond bad loans and represented a struggle for liquidity in the global financial system.

Fast forward to 2024, and the aftershocks of 2008 are still being felt.

The government-induced economic shockwaves of the COVID-19 pandemic have only served to exacerbate the existing challenges stemming from the 2008 crisis.

Central banks continue to grapple with the long-term repercussions, with discussions and actions indicating ongoing concerns about a return to the gloomy aftermath of the crisis.

These actions are not just economic adjustments; they reflect a persistent worry about the prolonged impact of the crisis on the global economy.

To the non-financial reader, it’s crucial to recognize that the 2008 global monetary crisis isn’t just a historical event—it’s an ongoing issue with profound implications for the stability and functioning of the global financial system.

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The Dollar Continues To Submit To The Iraqi Dinar.. The Exchange Gap Is Shrinking And The Federal Government Is Defeated Again, 3 JAN

 The Dollar Continues To Submit To The Iraqi Dinar.. The Exchange Gap Is Shrinking And The Federal Government Is Defeated Again

Information/Private..   After the stifling crisis that embarrassed the government in light of the high numbers reached by the dollar exchange rates compared to the official price, some attribute the reasons for the recovery of the dinar to the success of the Central Bank’s procedures and its recent steps in providing the currency of some countries to finance the country’s foreign trade.

On the other hand, the decline of the dollar is due to the government’s ability to contain the Federal Reserve’s decisions that contributed to the rise in the exchange rate in the previous period, amid expectations that the decline will continue after the Central Bank translates the recent decisions and measures into reality.

*The results of the procedures

Speaking about this file, a member of the House of Representatives, Suhaila Al-Sultani, explained the reasons for the decline in the dollar exchange rates after months of rise, while she confirmed that the results of the successful measures and decisions taken by the government and the Central Bank began to be translated into reality.  

Al-Sultani said in an interview with the Maalouma Agency, “The dollar exchange rates will witness a significant decline in local markets compared to the rise that parallel prices reached in the previous period,” noting that “the government’s continued taking the right steps in this file will reduce the gap between the official and parallel rates soon.” ". 

He continues, "The campaign of arrests and prosecution of currency speculators had an effective role in keeping the Iraqi dinar from collapsing," adding that "the Central Bank's decisions work to match the parallel and official dollar exchange rates."   

The member of the House of Representatives added: “Controlling the dollar file, in light of the major violations in this file, will not be instantaneous and will need a period of time in order to impose it on the local markets,” pointing out that “the results of the successful measures and decisions taken by the central bank government have begun to be translated on the ground.” reality". 

* Trade financing:

For his part, the economic expert, Abdul Rahman Al-Mashhadani, confirms that the central bank’s agreements with some countries to finance foreign trade in the local currency contributed to the decline in the dollar exchange rates, suggesting that the exchange rates will reach 145 thousand compared to 100 US dollars. 

Al-Mashhadani said, in an interview with the Maalouma Agency, that “the agreement with the banks of the Emirates, Turkey, India, and China to finance Iraq’s foreign trade is a step in the right direction,” noting that “proceeding with these measures will reduce the gap between the official and the parallel.” 

He continues, "The measures taken by the government were practical, but the shock of the US Federal Reserve's punishment of banks prevented prices from falling in the previous period," pointing out that "the US sanctions were a painful blow to the local markets." 

He added, "One of the factors why the dollar exchange rates did not decline in the previous period was the intervention of the external factor in the dollar issue," adding that "the central bank's agreements with some countries to finance trade in the local currency contributed to the decline in the dollar exchange rates."

The dollar exchange rates in local markets witnessed a significant decline after months of rise, which created severe economic repercussions for citizens, after the exchange rates at one time reached 169 thousand for every 100 dollars. Ended 25/day  LINK

wciappetta:   You have to wonder why all the fuss of containing the "market rate" bringing it in line with the CBI official rate? In the past the CBI has been able to maintain the 2% margin or at least close to it. I think the goal today is to achieve this standard again thus proving the ability of the CBI to effectively manage the Iraqi economy according to international standards before they move to the next step, or you would have to question why the extreme effort?

AML/CFT is being employed and this did create a strain on commerce as vendors became acquainted with the electronic system to process commerce and this did upset the balance in dollar access. The CBI employing its new strategy has created the expectation that the market rate for dollars is quickly falling in line with the official exchange rate.

This effort has been spearheaded by the CBI in conjunction with the Fed/US treasury by allowing other foreign currencies into the mix for trade [as was apparently done prior to 1990] in order to reduce dollar demand. I think the 2% target is desired. I think the US is requiring this target in order to move forward. My conclusion for better or worse is based on what the reports declare. In any case and IMO it won't be long to reach the goal.