Thursday, February 1, 2024
"ANALYSIS OF IRAQ NEWS: THE CENTRAL BANK OF IRAQ DECIDES TO RESTORE THE MECHANISM FOR FINANCING IRAQ’S FOREIGN TRADE, STARTING NEXT MARCH" BY MNT GOAT, 1 FEB
THE CENTRAL BANK OF IRAQ DECIDES TO RESTORE THE MECHANISM FOR FINANCING IRAQ’S FOREIGN TRADE, STARTING NEXT MARCH
The Central Bank of Iraq decided to restore the mechanism for financing Iraq’s foreign trade, starting next March.
The Central Bank said in a letter addressed to the banks, which Al-Iqtisad News reviewed, that for the purpose of organizing financing operations for requests to enhance external balances, it was decided to implement the new requirements and mechanisms starting from March 1, 2024.
He added that banks wishing to enhance their balance with correspondent banks in all currencies should appoint an external auditor for the purposes of reviewing transfers in advance of the process of sending transfers. Banks wishing to enhance the balance must provide us with information about the names of the companies they wish to contract with within a maximum period of February 29, 2024.
He stressed that requests to strengthen the dollar are for banks that hold correspondent accounts with an American bank exclusively, at a price of 1310.
He stated that strengthening other currencies other than the dollar will accept applications at the banks of the currency country, provided that the classification of these banks is either the same as the country’s classification or only one rank lower than it, in a way that is consistent with Iraq’s import requirements from those countries.
(There is more to this policy and you can go to the link and read it but essentially this is the new policy come March.)
https://mntgoatnewsusa.com/latest-mnt-goat-newsletter/"ANALYSIS OF IRAQ NEWS:OPERATING THE FIRST PHASE OF THE INTEGRATED ARAB TRADE LINE BETWEEN EGYPT, JORDAN AND IRAQ" BY MNT GOAT, 1 FEB
OPERATING THE FIRST PHASE OF THE INTEGRATED ARAB TRADE LINE BETWEEN EGYPT, JORDAN AND IRAQ
(It has begun, Iraq is now taking the lead in becoming a clearing-house for logistics between middle eastern countries. So far only two but more are added as time is passing and ease of trade is realized. Don’t forget there is also a rail project underway which will be online soon too.)
The Egyptian Ministry of Transport has operated the first phase of the Arab Integrated Multimodal Logistics Trade Line between Egypt, Jordan and Iraq, to serve the transport of goods in the Gulf countries to the ports of European and American countries.
The goods pass through the link between the ports of Aqaba and Nuweiba on the Gulf of Aqaba, and from there by land – currently – through Sinai through the Nuweiba Tunnel Road, and from there to the ports of Al-Arish, East Port Said, Damietta and Alexandria Al-Kabeer, which is the route that represents the land part of the Taba Al-Arish logistical corridor, in order to be exploited for services. Direct sea ports between Egyptian, European and American ports, through the Egyptian Ministry of Transport in cooperation with the Iraqi and Jordanian Ministries of Transport.
The goods are transported via trucks from Iraq and Jordan to the port of Aqaba in Jordan, then the trucks cross by sea inside ships to the port of Nuweiba, then by land through the Nuweiba tunnel road passing through Sinai to reach the ports of East Port Said, Damietta, and Alexandria, then they are shipped on ships to European and American ports.
The Taba-Arish-Bir al-Abd-Al-Fardan railway line, with a length of 500 km, is being constructed to increase the volume of goods intended to be transported from the Gulf, Iraq and Jordan to Europe and America within the second phase of the integrated Arab trade line. Trucks in the ports of Nuweiba and Taba will be replaced by railway trains. This increases the volume of goods via railway lines, which connect with all Egyptian ports .
It was put into operation at the beginning of January 2024, as Egypt amended all the necessary customs legislation to facilitate and increase direct international transit movement through the Egyptian state through the infrastructure of ports, road and railway networks, and the Egyptian Ministry of Transport also joined the “TIR” and “VINA 1968” agreements. Which facilitates the entry of foreign trucks to cross within Egyptian territory in the shortest possible time.
The line is considered the fastest in arrival time, the least expensive, and the easiest in procedures and opportunities. It also contributed to linking Jordan, Iraq, and the Gulf states, through the Nuweiba sea port to the Egyptian ports overlooking the Mediterranean Sea and from there to the European market.
For his part, the Egyptian Minister of Transport, Lieutenant General Kamel Al-Wazir, confirmed, according to the Egyptian Youm Al-Sabea, that the operation of this line came based on coordination between the Egyptian Ministry of Transport and the Jordanian and Iraqi Ministries of Transport through the strategic partnership with the Arab Bridge Navigation Company, and its operation also comes in light of the directives of President Abdel Fattah El-Sisi. The President of the Republic transformed Egypt into a center for global trade and logistics, and the Ministry of Transport implemented an integrated plan to develop international multimodal transport hubs (land – rail – river – sea) and within the framework of the Taba – Al-Arish logistical corridor, which is currently being implemented within a number of 7 integrated international development logistical corridors.
https://mntgoatnewsusa.com/latest-mnt-goat-newsletter/"RV UPDATE" BY PAULETTE, 1 FEB
Paulette
The issue I still see is in order to peg to a basket of currencies, they would "officially" have to depeg from the USD. While I have yet to see the US relinquish their receivership status over Iraq and the fact that the US is desperate to try to keep the USD propped up, I am unsure the actual mechanism of how they will be allowed to depeg and then repeg. It seems like receivership would need lifted first for that kind of move.
If they are truly heading to a simple 3 decimal space move on their exchange rate and...they are heading to 1.31USD to 1 IQD, they would have to make another move first to 763.4 from 1310...As of now, a simple decimal move of 3 places would mean 1310 IQD to 1 USD would become 1.310 IQD to 1 USD or 76 cents per IQD..
The basket of currencies is what they intend to peg to instead of just pegging to one currency - the USD...This is what the CBI and the GOI has stated...If they are pegged to just one currency, if the value (purchasing power) of that currency drops significantly, so does the value (purchasing power) of the IQD. If they are pegged to a basket a currencies, if one drops the others keep the IQD "propped up". This is extremely important to Iraq as they are predominantly an import country. This is precisely what they stated years ago...Bottom line, the pegging to a basket is to maintain the purchasing power and stability of the currency and not a singular event to increase the IQD purchasing power.
Clare: With the closure...the dollar price decreased
1/20/2024
The main stock exchange in the capital, Baghdad, closed today, Saturday, due to the decline in the exchange rate of the dollar against the Iraqi dinar.
Selling prices in money exchange shops in local markets in Baghdad reached 153,250 Iraqi dinars for 100 dollars, while purchasing prices reached 151,250 dinars for 100 dollars. LINK
Sir_Shawn: IMO- CBI official rate 1310
1 USD ~ 1310 IQD = 0.000763
Drop the three zeros
1USD ~ IQD 0.763 = 1.310
Anyone for a mic drop…
Question is when….
Paulette: IMO......I don't believe .76 USD for one IQD (1.31 IQD/1USD) would be adequate for the Iraqis to want to abandon the more valuable USD......The MOP/MOI study all the way back in 2009 stated 1.14-1.18USD to 1 IQD to start for 3 years prior to reinstating the true value of 3.22USD per 1 IQD
Sir_Shawn: Well in my opinion, you are right, so this brings up the basket of currencies and the float. The Dinar will correct itself probably instantaneous. The question is the second set of books where I believe they were using the 1.31 per Dinar. We know that all those buildings and cities were not built on 1310 Dinars. But still we wait… IMO
Paulette: IMO......the basket of currencies is what they intend to peg to instead of just pegging to one currency - the USD. At least this is what the CBI and the GOI has stated in the past. If they are pegged to just one currency, if the value (purchasing power) of that currency drops significantly, so does the value (purchasing power) of the IQD.
If they are pegged to a basket a currencies, if one drops the others keep the IQD "propped up". This is extremely important to Iraq as they are predominantly an import country. This is precisely what they stated years ago and those articles are probably somewhere within the pages of the Final Article thread. Bottom line, the pegging to a basket is to maintain the purchasing power and stability of the currency and not a singular event to increase the IQD purchasing power.
The issue I still see is in order to peg to a basket of currencies, they would "officially" have to depeg from the USD. While I have yet to see the US relinquish their receivership status over Iraq and the fact that the US is desperate to try to keep the USD propped up, I am unsure the actual mechanism of how they will be allowed to depeg and then repeg. It seems like receivership would need lifted first for that kind of move.
The buildings and cities were built on the USD value predominantly from oil sales. The number of IQD to the USD value seems irrelevant. Look at Vietnam and all they have accomplished with a currency value of less than a tenth that of the IQD. The big difference is Vietnam expanded their currency supply and Iraq has not. Iraq clearly has full intent to RI their currency and change their currency structure to rid itself of the 3 zeros. These articles are definitely contained in the FA thread.
If they are truly heading to a simple 3 decimal space move on their exchange rate and as you said they are heading to 1.31USD to 1 IQD, they would have to make another move first to 763.4 from 1310. Frank has said they had planned on one more move. As of now, a simple decimal move of 3 places would mean 1310 IQD to 1 USD would become 1.310 IQD to 1 USD or 76 cents per IQD
https://dinarevaluation.blogspot.com/2024/01/discussion-about-news-of-dollar-price.html
"RV UPDATE" BY FRANK26, 1 FEB
Frank26
Article: "The Iraqi judiciary and the US Treasury discuss sanctions on Iraqi people and companies" THE US TREASURY HELPS THE CBI CLEAN THE FLOOR Quote: "The two parties discussed the legal measures and sanctions issued by the US Treasury Department (OFAC) regarding Iraqi people and companies
Question: "Do you think they'll come out with a sucker rate?"
I don't care if it's suckered or not! Give me a rate! Give it to me! Make it international! Let it go and they'll float it up. Give me $0.10 I don't care.
Question: "What comes first, the small denoms, Forex or even the RI ?" I've said it a hundred times, the next thing that we seek is the lower denoms and the new exchange rate. Once we have that let's float.
Parliamentary Finance Calls On The Government To Get Rid Of The Dominance Of The Dollar, 1 FEB
Parliamentary Finance Calls On The Government To Get Rid Of The Dominance Of The Dollar And Diversify The Monetary Reserve
Wednesday, January 31, 2024 Baghdad/National News Center Parliamentary Finance calls on the government to get rid of the dominance of the dollar and diversify the monetary reserve https://nnciraq.com/248492/
Minister Of Finance: We Are Adopting A Promising Development Program That Is Consistent With The Provisions Of The Government Curriculum
Wednesday 31, January 2024 | Economical Number of readings: 620 Baghdad / NINA / Minister of Finance, Taif Sami Muhammad, confirmed: “The Ministry is adopting a promising development program that is consistent with the adoptions of the government approach aimed at correcting the financial and monetary policy.”
The Ministry stated in a statement: “The Minister met today in her office with a parliamentary delegation that included MPs (Donia Al-Shammari, Nermin Masoud, Hoda Thamer, Tariq Al-Khikani, Hassan Al-Khafaji, Fatima Al-Hawi, Iman Al-Obaidi, Haider Al-Shamkhi, Hassan Al-Masoudi, Saad Awad, Muhammad Al-Rumaithi, Ali Al-Bandawi, Hoda Al-Nashi, Mudar Al-Karawi).
The Minister of Finance expressed her welcome to the visit of members of the House of Representatives, which comes within the framework of maintaining communication and strengthening the principles of partnership between the executive and legislative authorities.
During the meeting, a number of common files were discussed and it was agreed to intensify the level of cooperation and coordination between the two institutions.
The Minister also reiterated her confirmation that the Ministry has adopted a promising development program consistent with the adoptions of the government curriculum aimed at correcting the financial and monetary policy, which is achieved with the support and assistance of the legislative authority, in the interest of advancing the economic and financial reality, achieving the elements of sustainable development, and providing services to citizens. https://ninanews.com/Website/News/Details?key=1104114
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Frank26 [Bank story] This time we didn't go down, we just called [the bank]... We said we want to see if we can exchange some cu...
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Bank appointment for Currency EXCHANGE Instructions/Checklist Bank Name_________________________________________ Bank 800#____________...
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Walkingstick All these meetings that the CBI had with all these agencies that were helping them with their monetary reform are done. Al...