DINAR REVALUATION

Friday, June 28, 2024

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Experts: Iraq's efforts to curb dollar usage yield "relative" success, 28 JUNE

Experts: Iraq's efforts to curb dollar usage yield "relative" success

Shafaq News/ For the past two years, Iraq has been striving to eliminate the use of the US dollar in the local market. Economic experts point to the Central Bank of Iraq's measures achieving "relative" success in controlling foreign currency.

In 2023, the exchange rate of the dollar soared to an unprecedented 1,700 dinars per dollar, maintaining this level for several weeks before gradually declining in the latter part of the year. In the past two months, the rate stabilized between 1,470 to 1,450 dinars per dollar.

The Iraqi currency crisis began after the US Treasury Department barred 14 Iraqi banks from the global banking transfer system known as SWIFT in an effort to prevent dollar smuggling to Iran.

The Central Bank of Iraq's (CBI) platform manages foreign currency requests specifically for financing foreign trade in the private sector.

Budget Increases the Gap

Economic expert Nabil Al-Marsoumi told Shafaq News Agency, "The reason for the dollar's rise is trade with Iran, which is under US sanctions. Thus, the Central Bank of Iraq's electronic platform for selling dollars does not provide this currency to traders, forcing them to resort to the black market."

He added, "Travelers to Syria, Lebanon, and Iran also cannot obtain official dollars from banks, so they turn to the parallel market, increasing demand for dollars."

Al-Marsoumi explained, "The gap has recently widened, especially after the new budget was released, which means an increase in total demand, consumer and investment spending, and consequently an increase in imports. This will increase pressure on the dollar, pushing it higher, potentially reaching 150,000 dinars per 100 dollars or slightly more."

At that time, the Iraqi government agreed to a Central Bank proposal to lower the exchange rate from about 1,470 dinars to 1,300 dinars per dollar, significantly impacting the exchange market by reducing the rates from 1,700 dinars per dollar in the parallel market.

Structural Imbalance in the Economy

Abdul Rahman Al-Mashhadani, economic expert and professor of economics at the Iraqi University, attributes the dollar's stability over the past two months to "the performance and mechanisms used by the government and the Central Bank. The spike during the Eid holidays was due to increased demand for travel abroad."

Al-Mashhadani told Shafaq News Agency, "Finding a solution involves dealing with Iran, from which daily imports range between 25 to 30 million dollars, part of which is routed through the UAE."

He noted, "The solutions did not address the structural imbalance in the economy. The commercial sector has not been reorganized, and the banking system has not fully complied with international standards and the US Federal Reserve's daily transfer operations."

Dollar Smuggling

Former Central Bank of Iraq director and economic expert Mahmoud Dagher told Shafaq News Agency, "The primary reason for the gap between the market and official rates is the leakage of dollars into the market and then across unregulated borders."

He added, "Dollar smuggling to sanctioned countries is the main cause of the dollar crisis. To resolve this crisis, border and customs control is essential to return the dollar to its official rate."

Dagher continued, "The reason the dollar hasn't risen above 1,500 dinars in the past two months is that the bank sells more than 300 million dollars daily, limiting significant increases. However, the market rate remains above 1,450 dinars per dollar, while the official rate is 1,320 dinars, indicating a difference of 120 points or 130 dinars per dollar."

The fluctuation of the dollar's exchange rate in the black market has disrupted commercial activity in the country, contributing to the rise in consumer goods prices. Although the average Iraqi individual income increased to seven million dinars last year, rising prices of goods and currency rate fluctuations impact the Iraqi market.

Market Contraction

Economic expert Durgham Muhammad Ali told Shafaq News Agency, "The dollar's continued instability harms the local market, as the gap between the official and parallel rates widens, shrinking the market and reducing the supply of goods, thereby increasing their prices beyond the parallel exchange rate. Therefore, maintaining a stable rate and constricting the parallel market is the solution to any pricing crisis."

He confirmed, "Long-term inflationary effects are difficult and slow to address, even within a stable price range."

"RV UPDATE" BY MNT GOAT, 28 JUNE

Mnt Goat

Article: "DOZENS OF IRAQI COMPANIES PARTICIPATE IN AN INVESTMENT SUMMIT IN AMERICA" ...in the past years I said – What is the US waiting for?

Why have they not yet invested the US companies in Iraq? There is billions to make over there. – Well the spigot had to be opened first and now it's opened. The spigot analogy means that the sanctions are over, war reparations paid and now they can do business easily with the rest of the world. But as you know with Iraq nothing happens overnight and so it took a year and a half to open the spigot but now it’s opened up wide.

So as investors where do we stand with the RV?

Based on this information from my Saturday call to Iraq, I will summarize it for you. We are still waiting for the US to give assurances. The project to delete the zeros was scheduled for June and we will still have a week remaining in June. This is all I know and can tell everyone at this point. But don’t go off too excited and forget all the other information my contact just told us either. You must put everything into its proper ..FOR READ MORE: https://dinarevaluation.blogspot.com/2024/06/so-as-investors-where-do-we-stand-with.html

Iraqi dinar 🔥CBI ,WTO & Frank 26 Finally Came Out The Iraqi dinar Rate 🔥...

"CHANGES" BY FRANK26, 28 JUNE

KTFA

FRANK26: "CHANGES"........F26

Parliamentary law challenges the “2024 budget tables” and the federal government is waiting for an answer within 15 days

6/26/2024

Baghdad

Today, Wednesday (June 26, 2024), a member of the Parliamentary Finance Committee, Moeen Al-Kadhimi, revealed that an appeal had been filed by a member of the Legal Committee in Parliament against the approval of the 2024 budget tables.

Al-Kadhimi told “Baghdad Today” that the appeal was submitted “on the pretext that the numbers mentioned in the budget items will change, and thus this is considered a change to the law and requires the implementation of a new law with a first and Second reading, and final approval.”

He pointed out, “Another objection to changing the financing of oil producing companies from self-financing to central financing, and this matter is considered another piece of legislation that cannot be included in the budget tables.”

Al-Kadhimi pointed out, “The Federal Supreme Court referred this case to the Presidency of the House of Representatives and requested an answer within 15 days.”

On June 3, 2024, the House of Representatives voted on the schedules of the amended Federal Budget Law No. 2024 (13) for the year and its annexed schedules (A/B/C/D/E/F).”

LINK

"RV UPDATE" BY BRUCE, 28 JUNE

Bruce

...when we get to the point when things are very quiet, which they are...we know that we're close, and we know that...this is about to go...

[via WiserNow] We know that there's a lot going on behind the scenes. One of our bankers - Wells Fargo said, Just hang in there...just hang in there a couple more days ...So I'm excited...we will be able to look back at years of waiting and say, it was worth it.

..we thought the Iraqi Budget for Iraq had been put in the Gazette last Saturday. Well, come to find out it was NOT in the Gazette Saturday...So even though Iraq is trading up the value of the dinar – they really were not quite at the position of locking in that rate for us...but I think based on the information we've had in the last few days...I believe they're ready for this thing to go.

https://dinarevaluation.blogspot.com/2024/06/rv-update-by-bruce-22-june.html