The Iranian Riyal Instead Of The Dollar.. Who Benefits From Financing Trade Between Baghdad And Tehran?, 5 JAN

 The Iranian Riyal Instead Of The Dollar.. Who Benefits From Financing Trade Between Baghdad And Tehran?

Posted On01-04-2024 By Sotaliraq  Ayoub Saad   Iraq began a project to import Iranian goods in the riyal currency instead of the US dollar, as it considered this step important and would contribute to increasing trade exchange with neighboring regional countries.

According to experts, this will put a big question mark on how Iraqi merchants can buy Iranian currency, because that requires either using the US dollar or using the Iraqi dinar, which will be returned again to Iraq for the purpose of being replaced with the dollar, given the very modest volume of Iraqi exports to Iran.

Assistant Director General of the General Foodstuff Company, Muthanna Jabbar, said in an interview with (Al-Mada), “The project was adopted by the Central Bank of Iraq in coordination with Iraqi government banks, starting with the Iraqi Trade Bank, Al-Rafidain and Al-Rashid Bank, and other accredited private banks.”

He adds, “The project depends primarily on reducing the internal demand of importing merchants for the dollar currency,” noting that “imports from Turkey, Iran, Syria, and Saudi Arabia are in the internal currency. It is possible to adopt the internal currency as an alternative currency and calibrate the dollar prices within a specific mechanism in the banks.”

He continues, “Banks have a network of correspondents covering all locations of the world, and are also connected to stock exchanges. If the importer is from China or Iran, he is originally purchasing a specific commodity or commodity in that country’s currency.”

Jabbar explains, “Accreditation is opened on the basis of that country’s currency and is calibrated in dollars, so the Iraqi Trade Bank ensures through the correspondent network that it provides that country’s currency to the merchant applying for the platform for the purpose of import.”

The Assistant Director General of the General Foodstuff Company states, “This step will contribute to increasing trade exchange with regional neighboring countries on the basis of the dinar against the currency, which will help strengthen the dinar and reduce the demand for the import dollar.”[/size]

It is noteworthy that the volume of trade between Iraq and Iran reaches 10 billion dollars per year, and is divided into 95% in favor of Iranian goods, goods and services, and 5% in favor of Iraqi exports, in addition to amounts equivalent to the volume of this trade that Iraq pays to the Iranian side in exchange for importing the gas necessary to operate the stations. electrical.

For his part, economic expert Nasser Al-Kanani said, during a brief interview with (Al-Mada), that “the issue is not easy, and is in the negative interest of Iraq,” noting that “the government is forced to take this measure because it imports from countries under a blockade.”

It is noteworthy that the Central Bank of Iran confirmed the start of a project to settle its country’s exports abroad in the national currency, the riyal, and the issue of settling Iranian exports via the riyal currency outside the borders has been studied by the Central Bank for several months, and that its entry into force will address the requirements of exporters to Iraq and Afghanistan, in addition to the draft regulations. The cross-border riyal was formulated by the Central Bank, and practically two banks have started this project, and soon it will be circulated to all the country's banks.

The American magazine Forbes classified the Iranian riyal as the weakest in the world against the US dollar, as every one US dollar is equivalent to more than 422,000 Iranian riyals. “The difference is greater in parallel markets.”

Specialists believe that continuing to implement the decision to finance trade between the two countries in the Iranian currency would benefit the Iranian riyal but not the Iraqi one, due to the very modest volume of Iraqi exports to Iran.

According to statistics, Iran imported more than $263 million of various Iraqi products, witnessing a decline of 78% compared to previous years, and Iraq was one of Iran’s permanent trading partners over previous years and decades.   LINK

"RV UPDATE" BY BREITLING, 5 DEC

 Breitling  

Question: "Why do the [Iraqi] citizens want to keep using the dinar when the value is so low?" 

 Not everybody has access to the US dollar for one thing.  #2 It's artificially low.  A lot of Iraqi's know this.  They know what's  going on.

  There's nothing they can do about it.  That's one of the things, if you watch the parliamentary elections of Iraq one of  the number one campaign promises all these guys make is we're going to add value to the dinar.  They know it's artificially low.   [They look around and think] we're selling more energy, the price per barrel is more, we have more customers and yet the dinar is  [worthless] and we're all running around in poverty.  

Question:  "When it does revalue, when do we get out?  How long do we wait?" 

 That depends on your own needs.  Are you trying to get a house?  Are you trying to pay off a loan?  What is it because once you hit that number get out.  Or if it doesn't go up to that number - Let's say you're trying to make...$250,000 and you realize the investment is only going to get you about $180,000, then get out!   Diversify.  Get into something else.  Don't just stick around.

The only way you can answer those questions is you have to put a piece of paper down and realistically what is it that you want.  You have to be realistic about it.  

You can't say the first thing is I'm going to start off with a $50 million dollar mansion.  Don't be stupid...Let's be a little more practical.  A home over your head, debt free, for you and your family...then you can go for the big stuff.  Your investments are based on that...what it is you want.

https://dinarevaluation.blogspot.com/2023/12/rv-update-by-breitling-16-dec.html

Iraqi Dinar🔥Wells Fargo Rare Announcement For RV Of IQD Today 2024🔥iraqi...

Monetary Conflicts: The Iranian-Iraqi Chamber Of Commerce Confirms The Continuation Of Exchanges Despite The Seizure Of The Dollar, 5 JAN

Monetary Conflicts: The Iranian-Iraqi Chamber Of Commerce Confirms The Continuation Of Exchanges Despite The Seizure Of The Dollar

January 3, 2024  Baghdad/Al-Masala Al-Hadath: Member of the Iranian-Iraqi Chamber of Commerce, Hamid Hosseini, said 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.

During a televised interview, Hosseini referred 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 had existed 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.

He pointed to the consequences of applying this law on the foreign exchange process for Iranian merchants and businessmen in Iraq, and 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, he 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.   https://almasalah.com/archives/78281

"RV UPDATE" BY WALKINGSTICK, 5 JAN

  Walkingstick

  The closer we get to this monetary reform, much more will be revealed...So much is already being revealed and put in print but as we get closer you will see so much more.  

 [Iraqi banks] are having a stampede of people going in because of the understanding  of the monetary reform education.  Direct deposit accounts were opened for the citizens that didn't have any accounts...they opened  up about 1 million...and they're not done yet...

These bank accounts are extremely important for the monetary reform...These  accounts are for payments that will be made to the citizens...salaries given to the citizens, for any retirement salaries  given...for HCL payments... What they are doing is extremely important for the monetary reform process...   

  The evidence for the monetary reform was perfectly set up at the start of 2024.  If that's the case, what happened? 

 Ka-ka happens.  Things happen.  It is what it is.  What...I'm very very excited about, it's not about rumors..Iran stealing...lies...our government here in the United States of America...Right now what it is, is they are announcing the monetary reform to the Iraqi citizens.  There talking about the float and the reason why they're talking about the float IMO is because that's the next phase...

Evening News with MarkZ, joined by Dr. Scott Young. 01/04/2024

From the dollar to the dinar... Iraqis complain about the deterioration of their salaries, 4 JAN

  From the dollar to the dinar... Iraqis complain about the deterioration of their salaries

“I have been waiting for about four months to receive my full salary from the bank, but every time I receive half of it and have to wait two or three weeks until I receive another payment,” says Sakar Mustafa, an Iraqi journalist who works independently with international institutions.

She explains to “ Raise Your Voice ” that “her salary ranges between 1,500 and 2,000 US dollars, depending on the work she performs, but what the bank disburses to her does not exceed 1,000 dollars, which is a very small amount that is not sufficient for all of her monthly expenses, represented by house rent and school tuition.” Bills and transportation.

“I spoke to the bank, and they informed me that they had received instructions to disburse salaries according to their capabilities, and currently they do not have the full liquidity to disburse it in full in dollars,” Mustafa continues.

She confirms that "her salary either arrives incomplete, or is transferred to the Iraqi dinar at the official rate set by the government (1,320 dinars per dollar), at a time when the exchange rate in the parallel market is 1,520 dinars per dollar."

On December 31, the Central Bank of Iraq announced the identification of the categories that receive their transfers in US dollars, which are: diplomatic missions, all international organizations and agencies operating in Iraq, and non-governmental civil society organizations registered in the General Secretariat of the Council of Ministers, in the event that the foreign donor stipulates that they pay sums of money. Foreign transfers received in the dollar currency inside Iraq.

In addition to government contracts in effect in the US dollar currency, ongoing contracts for grants, loans, and foreign agreements, and 40% of the remittances received by Iraqi exporters resulting from their exports abroad.

Since the end of 2022, Iraq has been witnessing an exchange rate crisis, represented by the fluctuation of dinar prices against the dollar and other foreign currencies, and inflation in the prices of goods and services in local markets.

The crisis deepened in 2023, with a significant decline in the price of the dinar against the dollar in the parallel market.

One of the solutions developed by the government is to force merchants to deal in the Iraqi dinar in their local transactions, so that the Central Bank of Iraq adopted the electronic platform in the currency auction to limit the smuggling of the dollar from the country and increase the value of the dinar.

The Central Bank activated the second phase of adopting the platform, with the aim of subjecting individual financial transfers and credit cards, activating electronic payment, reducing dependence on cash, and allowing Iraqi banks to import all currencies, including the dollar, to meet the needs of their customers.

But these solutions did not end the crisis in salaries for Iraqi employees working with foreign institutions.

"arbitrary action"

From the beginning of last December until the 20th of December, Iraqi banks, both governmental and private, have imported 255 million US dollars to meet the needs of their customers, according to the latest Central Bank statistics, published by the  official news agency . 

Economist Hammam Al-Shamaa told “Raise Your Voice,” saying, “Reducing the exchange rate in the parallel market to the official exchange rate will not be achieved in the short or even long term. There are many obstacles that prevent this.”

He wonders: “Does Iraq have enough foreign currencies and dollars if oil prices fall? Can it pump into the markets an amount of dollars that would lead to equality or matching between the official and parallel prices?”

“The answers are left to the future,” adds Al-Shamaa, who considered that “the Central Bank’s insistence on dealing with employee salaries paid in dollars based on the official exchange rate is an arbitrary and unfair measure for employees who receive US currency. This measure will not have a significant impact on the markets, as there will be a decline.” In remittances, resort to banking offices or black money transfers.”

Economist Nabil Jabbar Al-Tamimi points out that “there is a defect in the Central Bank’s dealings with external transfers from oil companies and institutions, media institutions, diplomatic bodies and oil companies, as well as other employee beneficiaries, who receive their salaries in dollars, and complain about the large difference between the price of... Official and parallel exchange if their salaries are converted into dinars.”

He told “Raise Your Voice”: “The cases you mentioned are exceptional, and are not an excuse to stop the campaign to end dollarization represented by the excessive use of the dollar in the local market, and the fate of the dollar exchange rate in the end is to stabilize at the official rate or something close to it within months.”

At the same time, Al-Tamimi believes that “the public interest requires acceptance of the state’s decisions, despite their problems.”  link