Government adviser announces the start of the implementation of the reform plan in government and private banks, 12 APRIL

Government adviser announces the start of the implementation of the reform plan in government and private banks

Economy News – Baghdad

The Prime Minister’s adviser to economic and financial affairs, Mazhar Mohamed Saleh, confirmed on Thursday that Prime Minister Mohammed Shiaa Al-Sudani is interested in reforming the course of the private and government banking system, while noting the start of the implementation of the reform plan for government banks.

Saleh said, in a statement reported by the official news agency, seen by “Economy News”, that “the banking market is a big division, for example, the capital of private banks or their share of capital from the government is about 78 percent, while the capital of government banks are 22 percent.”
“While government banks account for activities and assets by 85 percent, while the private banking activity is 15 percent, so there are large disparities between private and government banks,” he continued.

He explained, “The private banks almost coexisted on government allocations, whether by window or by opening the guarantee writings for projects, in the sense that any vibration exposes private banks to serious problems, so nearly 29 banks have been deprived of dealing in foreign currency.”

Saleh added that “Prime Minister Mohamed Shiaa Al-Sudani is very interested in reforming the course of the civil and government banking system,” stressing “the existence of a reform plan for government banks, and there is a foreign company that evaluates banking work, its capital and functions until they parallel the work of international banks.”

He pointed out that “private banks are facing a dilemma, especially after being denied foreign currency trading, although they have coexisted with this issue, so the government is trying to create a supportive internal environment for them, and it needs to correct their situation first.”

He went on to say that “the Prime Minister is properly supportive of private banks, on the condition that those banks improve their course of work,” stressing that “there is a reform plan to correct the course of private banks will be implemented soon.”

A government source revealed, on Tuesday, that Prime Minister Mohammed Shiaa Al-Sudani issued a number of measures and steps to activate the private banking sector, while directing the study of the possibility of enhancing the needs of branches of private banks abroad in foreign currency.

The source said that “within the framework of the Iraqi government’s equest to devop a strategy that stimulates the activity of the private banking sector during the next phase, allowing it to engage more in efforts to diversify the economy and strengthen its pillars, Prime Minister Mohammed Shiaa directed Sudanese to adopt a number of measures and steps in this regard, including:

1. The Ministerial Council for the Economy to study the proposal to increase deposits to government institutions and the central government with private banks, in order to enable them to provide more banking operations and contribute to the development of various vital sectors and increase their ability to provide various financing services inside and outside Iraq.

2- Supporting the Iraqi government and the Central Bank of Iraq to the Iraqi private banks through external institutions and banks, provided that the credit classification of each bank is taken into account.

3- Studying the possibility of enhancing the needs of branches of private banks abroad in foreign currency for the purposes of financing foreign trade – the private sector and according to the applicable contexts.

4. The Board of Directors of the Central Bank of Iraq determines the contribution of foreign capital in Iraqi banks and evaluates the reality of the situation to benefit the Iraqi economy, in accordance with the Banking Law No. 94 of 2004.

5- Participation of representatives of the private banking sector when discussing relevant issues in all state institutions, including meetings of the Board of Directors of the Central Bank of Iraq.

6- Studying the reactivation of the financing initiative submitted by the Central Bank of Iraq and according to the contexts proposed by the Central Bank in this regard.

7. The Council for Competition Affairs and Prevention of Monopoly shall take what is required under Law No. 14 of 2010 to prevent monopoly in banking services, provided that the Council shall submit reports to the Central Bank of Iraq and in coordination with it periodically and in accordance with the aforementioned law.

https://economy-news.net/content.php?id=42374

"RV UPDATE" BY PIMPY, 12 APRIL

  Pimpy 

 The average dinar holder only holds 250,000 dinars...

 Question "Do you think Iraq's government is sovereign?"  To some degree yeah, but no.  

If that were the case Iraq wouldn't have to keep sending their budget over to us to get it approved.  They would stand on their own feet.

 People have been asking about how much dinar does the International Monetary Fund hold...or World Bank...or World Trade Organization or US Treasury...There is no proof in writing anywhere that the United States is holding any Iraqi dinar.  Yes there could be some Iraqi dinar being held in our foreign reserves but it's not 4 trillion...Google it, go on any website, go anywhere and see if you could find if these organizations are invested into currencies or any other investments whatsoever...you're not going to find it.  That's not what they do...They don't hold the Iraqi dinar.  That's not what they do.

Iraqi Dinar🔥13303 Executive Order Resign By Joe Biden Today 2024🔥iraqi d...

THE SECRET OF THE STRENGTH OF THE KUWAITI DINAR…THE STRONGEST CURRENCY IN THE WORLD, 12 APRIL

 THE SECRET OF THE STRENGTH OF THE KUWAITI DINAR…THE STRONGEST CURRENCY IN THE WORLD

Kuwait issued its own currency, which is now considered the strongest in the world, on April 1, 1961. This was before its independence was completed by officially getting rid of British protection on June 19, 1961.

Preparation for the issuance of the first series of the Kuwaiti national currency, the “Dinar,” began with the issuance of the Kuwaiti Currency Law and the establishment of the National Monetary Council in 1960, while the circulation of national currency notes began to replace the previous currency, the “Gulf Rupee,” on April 1, 1961.

The Kuwaiti dinar has maintained its position as the most expensive currency in the world for many years, and its exchange rate against the dollar is currently 1 to 3.25, while one Kuwaiti dinar is equal to 3.03 euros and 2.59 British pounds.

The strength of the Kuwaiti dinar is due to several factors:

1.enormous oil reserves, which the authorities currently estimate at about 100 billion barrels. This country, which is small in area and sparsely populated, occupies third place in terms of oil production in the Gulf region after Saudi Arabia and Iran, in addition to its wealth of natural gas. The quantity produced last year amounted to approximately 5 billion cubic metres. 

(In my last Newsletter they told us Iraq is now 2nd in oil production and Saudi Arabia was 1st in the region. So their data for this article is outdated.)

2.Kuwaiti oil is distinguished by its quality, homogeneity, unique chemical composition, and low sulfur content, which is why it is described as the most ideal for refining operations.

3.Kuwait’s richness in oil, in addition to its strategic location, has been reflected in its citizens, and it is considered one of the richest countries in the world in terms of per capita GDP.

4.Kuwait was able to maintain relative stability, and despite the huge material losses that resulted from Iraq’s invasion of it on August 2, 1990 and its occupation of it for nearly 7 months, its national currency did not decline or lose its advantage.

Regarding the history of the Kuwaiti dinar, the exchange rate of the new national currency was initially calculated by focusing on the de facto British pound until the exchange rate of the Kuwaiti national currency was later changed in 1975, when the National Monetary Council took this decision in the wake of the British Bank abandoning the exchange rate. Fixed row for pounds.

Over the next 28 years, the Kuwaiti dinar exchange rate was calculated using a basket of multiple currencies until 2003. Since then, a fixed exchange rate for the dinar against the dollar has been set at a ratio of 1 to 3, with a maximum permissible fluctuation of 3.5 percent.

(Yes, Kuwait took up this fixed peg to the US dollar for favors from the US and to provide military support and protection.)

Four years after this step, Kuwait stopped pegging its national currency to the US dollar and began calculating the dinar’s exchange rate against a basket of currencies that was not disclosed in 2007 .

(The IMF has said that Iraqi will soon stop pegging its national currency to the US dollar on a fixed rate also and plans to begin calculating the dinar’s exchange rate against a basket of currencies and then float it. I believe this will be the same process for Kuwait.)

Until now, the Kuwaiti dinar has a fixed exchange rate that protects it from brokers and speculators, and makes it, along with other economic features, the most expensive and strongest in the world. 

https://mntgoatnewsusa.com/latest-mnt-goat-newsletter/

"RV UPDATE" BY MILITIAMAN, 11 APRIL

 Militia Man  

Remember when you say Iraq was paying for all of their major construction at 1310 you'll see...payments were able to disperse out of the DFI fund...Food, currency exchange programs, electricity, oil infrastructure programs, equipment for Iraqis, equipment for security forces, civil services, salaries, Ministry of budget operations - that's a broad spectrum...

They had a lot of things that they could tap into that oil money revenue stream dollars [DFI}.  It wasn't in dinars.   Things have changed now...They have a time crunch...Since the DFI has gone into the Iraqi2 Fund you're going to see big changes I'm excited to see...

Article quote "Al Sudani uttered a very important phrase, 'keep the dinar...I bear witness that the Iraqi dinar will return to its lofty economic value as it was'..."  Lofty economic value is not 1310.  It's not 1159.  It's not 1182 or 1160 or any of those number.  It's back to previous era like they said. 

 They shut this thing down at...$3.22...The true value from the IMF...estimates were about $2.80.  Those are their words not mine and in print...They can support it...Remember, Iraq was at $35 a barrel of oil.  It's $85 right now.  Then add in all the extra revenue streams that we know of...They're massive and they're just going to keep growing.

Pimpy and Nader live 04/03/24 - Exchange rate

Capital Intelligence rates an Iraqi bank with a stable outlook, 11 APRIL

Capital Intelligence rates an Iraqi bank with a stable outlook

Economy News – Baghdad

The Capital Intelligence Credit Rating Agency confirmed its credit rating of the long-term assets of the Iraqi Islamic Bank for Investment and Development (BIIB), listed on the Iraq Stock Exchange, denominated in foreign currencies, at “B-”, with a stable outlook.

The agency added in a research note on its official website that it maintained the bank’s short-term foreign currency-denominated asset rating (ST FCR) at “B.”

The agency maintained the independent bank’s rating at “b-” with a stable outlook, the fundamental financial strength rating at “bb-” and the exceptional support level at “uncertain.”

The bank’s ratings within the country’s borders also remained at “iqBBB+” for long-term investments and “iqA2” for short-term investments, with a stable outlook.

The bank enjoys a good level of profitability in 9 months of 2023, a strong capital base, and a high level of liquidity supported by the growing customer deposit base and representing credit strength.

On the other hand, the agency pointed to the major credit challenges facing the bank, as is the case with the rest of Iraqi banks, due to the economic and political weaknesses in Iraq despite the current oil prices, as well as the concentration in assets and customer deposits, and the relatively small balance sheet and market share.

In addition, the bank faces high rates of non-performing financing despite the improvement and the weak regulatory and supervisory framework.

Despite the bank’s relatively small balance sheet, it has nevertheless succeeded in expanding assets and customer deposits in recent years, and there remains a significant degree of concentration risk inherent in the balance sheet.

https://economy-news.net/content.php?id=42357