Tuesday, April 23, 2024
INTEL FROM CBI BANKER CONTACT IN IRAQ BY GOLDILOCKS, 23 APRIL
GOLDILOCKS
CBI Banker in Iraq Contact:
Dee and I just finished a conversation with our CBI Banker in Iraq with ties to the Foreign Remittance Department.
Iraq is currently increasing the amount of Gold they hold that will support their currency.
Iraq is encouraging people to use a debit card as much as possible, so they can get used to becoming a cashless society.
As far as a rate is concerned, they are looking to move from 1,310 to 1,000 soon.
Many new agreements have been signed with other countries to increase the demand for their currency as of late.
He expressed that they still need more goods to sell to increase their money velocity.
Iraq has not moved to a position of removing the three zeros on their currency just yet.
It was mentioned that they are still working with their Foreign Corresponding Bank to complete their banking reforms this year.
© Goldilocks
New financial bonds...bank interest thwarts the government's plans to close the deficit, 23 APRIL
New financial bonds...bank interest thwarts the government's plans to close the deficit
Monday, 04-22-2024, Karar Al-Assadi 356The Iraqi government has resorted to issuing financial bonds and selling them to citizens with the aim of filling the financial deficit in the budget and also to enhance the state’s non-oil revenues, which is a slogan raised by Prime Minister Muhammad Shiaa Al-Sudani to his government, and while specialists praise this approach, others identify obstacles that do not encourage the success of this experiment due to the lack of interest.
Banking achieved by “freezing” millions of dinars in exchange for revenues does not constitute a temptation to attract the citizen.
Economic expert Mazhar Muhammad Saleh says, “The bonds currently in circulation (Injaz), which were recently issued by the Ministry of Finance, are one of the medium-term government debt instruments,
which differ from treasury transfers as a debt instrument also in terms of maturity dates and the interest granted or paid, as
treasury transfers are mostly directed.” To the banking system, while
Enjaz bonds are mostly a means of borrowing to the public.”
On April 15, 2023, Rafidain Bank announced the issuance of “Enjaz” bonds to citizens, offering them in two categories, the
first in the amount of 500 thousand dinars with an annual interest of 6.5 percent, paid every six months for a period of two years, and the
second in the amount of one million dinars with an annual interest of 8.5 percent every six months for a period of four years.
He added, “These bonds were issued for the purposes of financing part of the planned deficit in the federal general budget for the year 2024, and engaging in direct borrowing from the public of lenders, especially those who have savings or financial surpluses, and
at the same time have the desire to invest their surplus funds in these highly collateralized sovereign bonds, as
they are subject to... (Injaz) bonds for the credit rating of the Republic of Iraq, which is currently set at grade B, similar to nearly 80 countries in the world.”
He continues, “We believe that the bonds finance 7 to 10 percent of the planned deficit in the annual general budget, through the contribution of the public of lenders by investing their available financial surpluses by possessing these bonds in return for the government receiving cash amounts that contribute to filling the deficit in public expenditures during the period.” Fiscal year 2024.”
Mazhar points out that “government bank branches undertake the sale of these bonds to the public and provide the holder of that bond with an electronic document first,
then he is provided with a paper document showing the details of the single bond that he will be in possession of.
The bond is also issued in several denominations, such as the half-million dinar denomination and the one million dinar denomination.” The maturity periods also vary.
He explains that “the one million dinar bond earns an annual interest rate of 8.5 percent and is paid every six months, and its maturity is four years, that is, the date of its amortization.
He also notes that the bond sale, which began on April 15, will continue to be offered until May 15 of next year.”
It is noteworthy that “Enjaz bonds are the highest in interest after the (Emaar) bonds and (Building) bonds that were offered in previous years, in which the interest rate reached 7 percent annually, and the holder of the bond can transfer its possession back to another holder, as government bonds are among the Preferred debts cannot collect interest or at the time of their repayment, so they can be mortgaged as excellent collateral.
Thus, holders of government bonds can liquidate the bond as a financial instrument and convert it into cash immediately by promoting it for sale in the secondary financial market and at any time before its maturity date and recovering the principal amount of cash paid in return. “Possession.”
The Ministry of Finance had previously announced the launch of a new issue of government bonds under the name “Injaz” for public subscription, indicating that
they are government bonds denominated in the Iraqi dinar in the denomination of 500 thousand dinars, for a period of two years with an annual interest of 6.5 percent paid every six months, and a bond of the denomination of one million dinars for the term. Four years with an annual interest rate of 8.5 percent, paid every six months.
For his part, the economic expert and professor of management and economics at the Iraqi University, Abdul Rahman Al-Mashhadani, explains, “
This is a normal measure taken by most governments in the world, and Iraq is not the first country to do it when it needs financing to fill the deficit or for investment projects, as it sometimes issues these bonds to achieve goals.” Specific, for example, building bridges, dams, or specific services,
but the purpose of these bonds in Iraq is to fill a deficit in the general budget and as a measure to withdraw liquidity from the market.”
He added, “These bonds have an issuance period.
For example, the half-million dinar bond has a duration of two years, and the million-dinar bond has an issuance period of four years
After that, the Ministry of Finance is obligated to return the bond amount to the buyer or extend it in the event of strong demand for it, but the interest is paid every six months.” By the Ministry of Finance, and it is certainly possible to sell them through the Iraqi Stock Exchange, just like the shares of companies that are sold in this market.”
Al-Mashhadani explains, “When we talk about the deficit, we are talking about 80 or 92 trillion dinars, which is the value of the budget deficit, and
this issuance of bonds worth two trillion dinars, or even if it was worth four trillion dinars, it cannot cover the entire budget deficit, so it is an attempt.” To create a kind of culture for individuals to invest in financial instruments such as stocks, bonds, and banks in order to obtain financial interest.”
He added, “These policies are not considered to be very successful, and
this issuance can mainly benefit banks, but
the vast majority of citizens do not believe that they will benefit from purchasing these bonds.
For example, the average Iraqi family has the ability for a citizen to buy, for example, 10 million dinars in bonds, which means 10 bonds worth One million dinars, in order to obtain an interest of 8.5 percent, which is not a large percentage and does not constitute a rewarding return for what was invested.”
Al-Mashhadani points out that “commercial work can achieve a profitable return much greater than government bond returns.
Investing one million dinars in the market, for example, enables an individual to recycle it several times in the market, in contrast, and obtain large profitable returns equal to or greater than the amount invested, as long as There is inflation, and there are high profits from investment returns in commercial markets.”
On June 12, 2023, the Iraqi Parliament voted on the federal budget law for the years 2023, 2024, and 2025, in an initiative that is the first of its kind in the country’s history in terms of the size of the budget as well as the number of fiscal years, with a value of 197 trillion and 828 billion dinars, with a financial deficit of 63 trillion. One dinar, which is approximately one-third of the budget.
In turn, the economic expert, Hammam Al-Shamaa, agrees with Al-Mashhadani, that
“the goal of announcing the sale of government bonds to citizens and institutions is to fill the deficit on the one hand and provide financial liquidity on the other hand, since the
total monthly spending at the present time exceeds eight trillion dinars, among the Central Bank’s sales.”
The currency selling window does not exceed five trillion dinars per month.”
He continues, “Therefore, they need liquidity to cover expenses, and this liquidity is expensive, and
the deficit is very large, reaching 35 percent of the gross domestic product, and
it is a cost that falls on the shoulders of future generations.
Government spending is now taking place at the expense of the future, and this year itself must be recorded. It is an inaccurate financial policy with dimensions.” “More political than economic dimensions.”
It is noteworthy that the Ministry of Finance recently issued government bonds to contribute to society’s contribution to the development of the Iraqi economy, as the
subscription funds contribute to financing economic development projects and achieving financial stability in the country. https://www.non14.net/public/166281
"RV UPDATE" BY FRANK26, 23 APRIL
Frank26
Article: "CEO of JPMorgan Chase expresses support for Iraq" Take a picture of this. Next time Chase tells you it's a scam put this right up to their faces.
Like we told you IOO he [Al-Sudani] gave orders to have the screens put up. I don't know how long it's going to take for him to make this announcement to the Iraqi citizens but I just don't see it happening much longer...
I
t seems to me the pattern of these bank stories that I've been receiving are changing more in the direction that, 'Yeah, we know. We don't know when. We don't know what to tell you. We don't know how much...but yeah we know what's going on.'
[Al-Sudani Q and A in Washington DC 1 hour 28 minute mark] Community Member: The question was asked...Is the government thinking of revaluing the dinar and reinstating the value of the dinar due to the current circumstances in the markets or do you see that it say the same?
Sudani replies by saying 'This policy is dedicated by the central bank and the governments abide by what the CBI decides. Right now I believe we are in the best status that we could be in...We started the reforms...this is going to raise the level of the value of the Iraqi dinar.' He told the whole world...
https://dinarevaluation.blogspot.com/2024/04/rv-update-by-frank26-22-april.html
Oil sets 5 government goals for optimal investment of national wealth, 23 APRIL
Oil sets 5 government goals for optimal investment of national wealth
Today, Tuesday, revealed a government strategy to maximize national production and enhance Iraq’s economic role in global oil markets, while stressing the keenness to increase national production of refining energy.
The spokesman for the Ministry of Oil, Assem Jihad, told the Iraqi News Agency (INA): “The strategy of the government and the ministry depends on the optimal investment of oil and gas wealth,” indicating that “the strategy requires not relying only on the export of oil, but rather diversifying the sources that enhance the Iraqi national income through... Developing mechanisms for dealing with wealth, which represents the main source of the national economy.”
Jihad added, "The government's strategy aims to maximize national production of petroleum products and the refining industry in Iraq, transform crude oil into white products, and achieve the priority of self-sufficiency, stopping imports, and gradually shifting to exporting these products to global markets," indicating that "the shift to marketing and product trade Al-Bayda achieves more revenues from exporting crude oil and contributes to strengthening Iraq’s position in the oil and commercial markets, and strengthens and supports the national economy, which depends directly on this wealth.”
He pointed out that "the Ministry of Oil adopted the strategy announced by the Prime Minister by converting 40% of crude oil into petroleum products, and last year it announced 7 investment opportunities in which it called on private sector companies and national and foreign investing companies to cooperate with the National Investment Authority and develop a promising program." Companies were invited to establish a number of investment refineries, including the Maysan Refinery Investment Project with a capacity of 150,000 barrels, the Qayyarah Refinery Project in Nineveh Governorate with a capacity of 70,000 barrels, the black oil hydrogenation project in Basra Governorate with a capacity of 30,000 barrels, and the Nasiriyah Refinery Project in Dhi Qar Governorate with capacity. 150 thousand barrels, and the Samawa refinery project in Al-Muthanna Governorate with a capacity of 150 thousand barrels, and also the Al-Kut Refinery project in Wasit Governorate with a capacity of 100 thousand barrels per day
And the rehabilitation of Al-Samoud refineries in Baiji, whose capacity reaches approximately 280 to 300 thousand barrels per day as refining capacities after... Rehabilitation and reconstruction operations, and after the Karbala refinery entered national production and also after the addition of the fourth unit with a capacity of 70 thousand barrels per day in the southern refineries, production became approximately 280 thousand barrels of refining capacity for the southern refineries in addition to other projects, and this will reflect positively on the national production of refining industries that represent the market and demand. Higher Petroleum Products.
He pointed out that “after achieving self-sufficiency, Iraq seeks to implement a strategy that enhances its economic role in the global oil markets,” noting that “the Ministry is keen to increase national production of refining energy and the announcement of inviting national and international companies to invest represents a shift in the government’s strategy towards encouraging... Investments in the crude oil settlement and refining sector open new horizons for national and foreign companies specialized in this field.”
He stated that "the government and the ministry are working on several axes for wealth, including the axis of internal use to meet local needs and attention to specifications, the axis of exporting crude oil and strengthening Iraq's role in global markets, and the axis of maximizing national production from refining industries and optimal investment of associated or natural gas," indicating that "the government's strategy depends on A contract for integrated project partnerships that include several axes, including integrated projects that include oil extraction and associated gas investment with the establishment of electric power stations, a refinery, petrochemical industries, and others that contribute to enhancing Iraq’s wealth.
Regarding the Al-Faw refinery, Jihad confirmed that “the Al-Faw refinery and petrochemical industries project is one of the promising projects in the refining industry in Iraq and the first project to be established in the ports of southern Iraq, and the government is working to accelerate its implementation,” explaining that “the refinery includes a petrochemical factory, tanks, export platforms and all related facilities.” Which contributes to achieving an integrated project aimed at investing and exporting these products.”
He stressed that "establishing the refinery in the Iraqi oil export port represents high flexibility in the process of marketing oil products and guarantees high revenues," adding that "the government hopes that this project will be one of the promising projects that is being established by one of the largest Chinese government companies."
He pointed out that "the government and the ministry are working to expedite the signing of the final contract after completing the due procedures."
He explained, "The refinery will enhance the country's refining capacity by 300,000 barrels per day, as well as a petrochemical plant, tanks and facilities, and is considered one of the giant projects in the region." link
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