Resilience of Iraq's banking system: Economist's confidence amid US sanctions
Shafaq News/ Iraqi economists express confidence in the resilience of Iraq's banking system despite the sanctions that the US Treasury imposed on a group of banks in Iraq.
Mahmoud Dagher, an economic expert and former director-general of the Central Bank of Iraq (CBI), clarified that this measure was not a sanction, rather, it was a restriction, which adversely affected the banks, the people, and the import financing process.
However, Dagher emphasized in an interview with Shafaq News Agency, "despite the pressure and harm caused to these banks, the banking system will not collapse as a result of these sanctions and restrictions."
The US Treasury imposed the sanctions on 14 Iraqi banks in July 2023 as part of a campaign against Iran's dollar transactions. The sanctions were reportedly prompted by the banks' involvement in "suspicious" money transfers during the past year.
Deputy Prime Minister and Foreign Minister Fuad Hussein has appealed to the United States to reconsider the sanctions imposed on 21 Iraqi banks that contribute to financing essential food items for low-income families.
Furthermore, the CBI issued an official letter in February, indicating that 8 Iraqi banks were banned from participating in the foreign currency sale and purchase window.
Following the fall of Saddam Hussein's regime after the US invasion in 2003, Iraq's private banking sector has experienced significant growth, with over 70 private banks now operating in the country.
Folks please remain positive as the world economy cannot continue without a new influx of funds
Banker has remained on the West Coast due to his wife's health condition but assures me he is in contact with Reno and will advise me as soon as he get his notifications which should occur just before the emails and 800 numbers are posted. Says all remains positive.
While I do not plan on opening the room tonight having spoken now twice to the banker today he is indicating he should hear something tomorrow and the absolute earliest notifications might be released would be Tuesday however he is more leaning to later in this coming week based upon past history. Either way I will post immediately upon hearing. GOD Bless.
Just visited with Okie re what the banker just related he was hearing to me from those above him that sometime late tomorrow or early Wednesday his appointment/exchange techs would be on call to schedule appointments.
He hopes this time it is for real as do all of us waiting.........
Well hopefully will get my computer repaired in a few days and can at least share what little is being brought forward.
Just visited with Okie re what the banker just related he was hearing to me from those above him that sometime late tomorrow or early Wednesday his appointment/exchange techs would be on call to schedule appointments.
He hopes this time it is for real as do all of us waiting.....
SUDANESE TO IRANIAN OFFICIAL: WE DO NOT TOLERATE AT THE EXPENSE OF IRAQ’S SOVEREIGNTY
Prime Minister Mohammed Shia al-Sudani said on Monday that there is no courtesy with any party at the expense of Iraq’s sovereignty, reiterating his rejection of any unilateral actions by any country, while stressing the Iraqi government’s keenness to establish relations on the principle of good neighborliness.
The media office of the Sudanese said in a statement received by the Shafaq News Agency that “the latter received today, the Secretary-General of the Supreme National Security Council of Iran Ali Akbar Ahmadian,” and stressed during the meeting “Iraq’s rejection of any unilateral actions carried out by any country, contrary to international principles based on mutual respect for sovereignty.”
“Iraq has made, and continues to make, great efforts to maintain stability and achieve calm, in the common interest of the various peoples of the region,” al-Sudani said.
For his part, the Secretary-General of Iran’s Supreme National Security Council stressed “his country’s commitment to Iraq’s security and stability, and its keenness to continue working in accordance with the joint security agreement between Iraq and Iran in a way that preserves the security of the two neighboring countries.”
Last month, Iran’s Islamic Revolutionary Guard Corps (IRGC) launched a violent missile attack targeting civilian areas in Erbil, killing and wounding 10 civilians.
Federal Prime Minister Mohammed Shia al-Sudani ordered at the time the formation of an investigative committee consisting of five figures, headed by National Security Adviser Qassim al-Araji, to investigate the incident.
Al-Sudani also described the bombing as a “clear act of aggression” and stressed his government’s determination to take “legal and diplomatic measures”.
The Revolutionary Guards claimed responsibility for the strikes on Erbil, saying in a statement that they were “in response to the crimes of the Zionist regime against the Islamic Republic”.
FRANK: I'm here to talk to you about your bank...I asked, Here at Chase do you folks exchange foreign currency?
He said no, we do not. I found it odd...something was very wrong...Second Question, If you don't exchange foreign currency why is Jamie Dimon the CEO in Iraq? ...
[He said] No he's not. My next statement almost started WW III...Sir, you are very ignorant. You're in charge of this bank and you're answering my questions incorrectly...
I said let me try that again, Does Chase convert foreign currency into American dollars?
No. J.P Morgan does.
..So Chase is a bank and JP Morgan are the investors of Chase Bank right ?
Yes...They will exchange your currency..
.He softened up a little bit. He asked, What do you have?
...The Iraqi dinar...
How much?
I made up a number. I have over 200 million dinars.
He said, you're not going to be exchanging your dinars here at Chase. We can't handle that. You have to go to a state bank...
Where should I take my dinars to have them look at them, inspect them and then deposit them correctly?
He said New York [or] Chicago...You come here to my Chase office in Toledo Ohio we'll zoom with Chicago.
You're going to come to me?
Yes...We'll make an appointment. The Brinks truck will come, a representative will come. They will verify it. They will have all the equipment they need...
Baghdad is considering adopting a special mechanism to sell dollars to travelers
BAGHDAD – The Central Bank of Iraq revealed that it will launch a special mechanism for selling dollars to ensure that they reach real travelers only, in the context of filling the loopholes for the leakage of hard currency into the parallel market or its smuggling abroad.
Bank Governor Ali Al-Alaq told the official Iraqi News Agency last Tuesday that the Central Bank and the government “give high priority to the issue of electronic payment because of its important economic repercussions and raising the level of transactions away from excessive use of cash.”
Al-Alaq did not specify the exact date for launching the new mechanism, but he explained that the Iraqi economy is par excellence and the electronic payment process aims to significantly reduce the economic degree of cash.
He stressed that the authorities have made important strides in arranging electronic payment at the level of collection and payment in state institutions, in addition to that the government has approved a package of “important” decisions, which facilitate this process and not burden citizens with the resulting commissions.
At the beginning of 2024, Iraq banned cash withdrawals and transactions in US dollars, in a step to limit the misuse of cash reserves in financial crimes and evade US sanctions on Iran.
Iraqis can withdraw money in dollars before they travel, but this has created a new problem, according to observers.
During the past months, authorities at the country’s airports arrested many travelers in possession of bank cards that they used to withdraw thousands of dollars from abroad at the official rate, then sell them again at the black market price inside Iraq.
The authorities limited dealing in dollars exclusively to the Central Bank and licensed banking offices, coinciding with the intensification of campaigns to monitor the high prices of food and medicine in local markets in Baghdad, in coordination with commercial control departments and intelligence services.
The announcement comes days after a decision preventing eight local commercial banks from dealing in dollars, as part of measures taken to reduce fraud, money laundering, and other illicit uses of the US currency.
The banned banks include Ashur International for Investment and Iraqi Investment, Al-Ittihad Al-Iraqi, Kurdistan International Islamic for Investment and Development, Al-Huda, Al-Janoub Islamic for Investment and Finance, Al-Arabiya Islamic and Hammurabi Commercial.
Under the decision, these banks will be prohibited from participating in the daily dollar auction organized by the Central Bank. The auction is the main source of hard currency in the country that depends on imports.
Last July, the government prevented 14 banks from conducting transactions in dollars as part of a broader campaign aimed at preventing the smuggling of dollars to Iran at that time through the Iraqi banking system. Iraqi and American officials said that the decision came after a request from Washington.
The banned banks include Ashur International for Investment and Iraqi Investment, the Iraqi Union, Kurdistan Islamic International for Investment and Development, Al-Huda, Al-Janoub Islamic for Investment and Finance, Al-Arabiya Islamic, and Hammurabi Commercial.
The central bank says banks banned from dealing in dollars are allowed to continue operating and conducting transactions in other currencies. Iraq has become a focal point in the American campaign aimed at reducing dollar smuggling to Iran.
Iraq, a rare ally of both Washington and Tehran, has reserves of more than $100 billion in the United States and relies heavily on Washington’s goodwill to ensure that its access to oil revenues and financial resources are not hampered.
Al-Alaq says that the Central Bank’s adherence to the rules and principles of external transfer in accordance with the conditions and requirements it set and its insistence on implementing them prompted many hesitant merchants to enter the official platform it created to sell foreign currency.
He stressed that using the platform is easy and safe and allows traders to use the dollar at the official rate, and that the bank has the ability to meet all requests for the dollar, whether personal, commercial, or any kind, as long as they are valid and legitimate, and these are strongly supported by the size of the foreign reserve.
He pointed out that the Central Bank has no problem in offering or selling the dollar, and that it does not place restrictions on sales operations at all and has never specified for any bank the value of its purchases of the American currency, nor has it set an upper or lower limit for any merchant, importer, or user of the dollar, or anything else.
He said, “This gave the impression that there is no problem in responding to demand for the dollar and that speculation is useless because the rules for this speculation are not available and incorrect.” He added, “Some groups are still trying, from here and there, to stay away from the platform for various reasons, whether to evade taxes, customs, etc., or because of illegal trade.”
