IRAQ IS REVITALIZING ITS ECONOMY IN 2024

"THIS RV IS A PRIVATE EXCHANGE" BY GINGER, 22 AUGUST

Wed. 21 Aug. 2024 Ginger’s Liberty Lounge on Telegram:

 This RV is a Private Exchange, not a public one. The special exchange and/or redemption has special rates for currency – a Contract rate for a couple of currencies. One being the Iraqi Dinar, which is being given as a result of an Oil for Dinar agreement between Iraq and the countries that provided troops during the process to remove Saddam Hussein. 

 The purchase of oil in Dinar from Iraq will start as soon as the Revaluation starts.  The Pre-revaluation Dinar will be used to purchase the oil at the new revalued price.  For example, the current 25,000 Dinar note has a value against the US Dollar 1,460 dinar to 1 USD.

 The 25,000 notes we have are those notes. The 25,000 Dinar notes we hold will be exchanged by the US Treasury at a high rate because they in turn will be used to purchase oil from Iraq after revaluation at face value as if they were the new notes.  That means that a 25,000 Dinar note can currently buy about $17.00 worth of oil, however after revaluation that same note can buy around $93,000 worth of oil. 

The Contract rate and the lower International rate are given to us in the Private exchange as a payment for what the US spent in that war. Vietnam holds a very high amount of Dinar and China has put their weight behind the Dongs revalue rate so that they can get the Dong after we exchange it, and the swap it for the Dinar that Vietnam has in order for them to buy oil with those old notes.

Saleh Explains The Reason For The Rise In Foreign Dollar Remittances And Its Impact On The National Economy, 22 AUGUST

 024/08/21 Read: 2,925 times  {Economic: Al Furat News} The financial advisor to the Prime Minister, Mazhar Muhammad Salih, explained the reason for the increase in sales of foreign currency remittances {dollars}.

Saleh told Al Furat News Agency, "The phenomenon of increasing sales of foreign currency transfers is due to the results of the important change that occurred in the policy of the Central Bank of Iraq in dealing with foreign transfers and intervening in the monetary market through the transformation of the mechanisms for financing foreign trade for the private sector from the compliance platform to new mechanisms represented by strengthening the accounts of correspondents of Iraqi banks abroad in foreign currency at studied and sufficient levels that are consistent with the requirements for financing foreign trade for the private sector in foreign currency."

He added, "After the compliance platform had previously rejected nearly 85% of foreign transfer requests during the past months, the policy of strengthening the accounts of Iraqi banks with their correspondents from solid international banks, as an alternative policy, has become so easy, simple and flexible that it has made the implementation of daily foreign transfer requests available and achieved through foreign correspondent banks directly without going through the platform, at a high rate of nearly 85% of the total demand for these daily foreign transfers."

Saleh explained that "this high change in the flexibility of transfers has been reflected positively on the national economy, especially in the stability of the functions of supply and demand within the national economy in two directions, the first of which is {the supply side} and is represented by the availability of a wide supply of goods and services in the local market through flexible imports financed by the fixed official exchange rate of 1320 dinars per dollar."

He explained that "the other direction is {the demand side}, which refers to the process of exchanging the Iraqi dinar for the dollar for the purposes of financing foreign trade through the transfers mentioned above, which means that meeting the demand for the dollar represents a direct meeting of the demand for (foreign goods, services and benefits) for the benefit of the local market."

He pointed out that "meeting the demand for foreign currency represents an important pillar of the monetary policy of the Central Bank of Iraq, and achieving its operational objectives in confronting the levels of local liquidity surplus from the dinar and controlling them, which constitute what is called {surplus demand}, as this control over local liquidity represents a positive intervention by the Central Bank's monetary policy in the money market and controlling the levels of that liquidity."

Saleh continued, "This control leaves positive effects in achieving a balance between the real flow in the overall economy of goods, services and benefits and the monetary flow within the economy itself," indicating that "such a balance between supply and demand achieves stability in the general level of prices and welds growth levels in inflation rates, which is positively reflected in the stability of the purchasing power of the dinar and the general monetary income."  LINK

ALAQ CONFIRMS 3 ZEROS NOTES TO COEXIST FOR A DECADE 2024

DINAR REVALUATION : AN OVERVIEW ABOUT Alaq Confirming the Coexistence of Three Zero Notes for a Decade, 22 AUGUST

Alaq Confirms Coexistence of Three Zero Notes for a Decade

As of August 22, 2024, Alaq, a significant figure in the Iraqi financial landscape, has confirmed that three zero notes will continue to coexist within the Iraqi monetary system for the next ten years. 2  This announcement addresses the ongoing concern regarding the deletion of zeros from the Iraqi currency, a process that has been both anticipated and debated among economists and the public alike.

Historical Context and Financial Strategy

The decision to allow the coexistence of the three zero notes stems from a broader financial strategy aimed at stabilizing the Iraqi economy. In the face of fluctuating oil prices and the aftermath of conflict, the Central Bank of Iraq has been working on various measures to improve economic conditions and enhance the value of the Iraqi dinar. 2

Reasons for the Coexistence

The rationale behind Alaq's confirmation is multifaceted. Economic experts suggest that the immediate removal of the zero notes could lead to logistical challenges and potential economic disruptions. 2 By allowing a gradual transition, the Iraqi government aims to minimize these risks while implementing necessary structural reforms.

Public and Market Reactions

Impact on the Iraqi Public

For the Iraqi public, the confirmation that three zero notes will coexist for a decade brings a sense of relief and certainty. It ensures that the immediate economic impact on everyday transactions will be minimal. 2

Market Stability

From a market perspective, the confirmation is viewed as a stabilizing factor. It provides businesses and investors with a predictable timeline for adjusting to the eventual removal of the zero notes. 2

Implications for Investors

Outlook for Investors

For investors in the Iraqi dinar, Alaq's confirmation signals a cautious optimism. The ten-year coexistence period offers a timeframe for planning and adjusting strategies based on the expected changes in the currency's value. 3

Investment Strategies

Investors are encouraged to keep abreast of developments in the Iraqi economy and to consider the long-term implications of the coexistence of zero notes. Strategies should factor in the potential for a stronger dinar and the gradual elimination of the three zero notes. 3

Conclusion

Alaq's confirmation regarding the coexistence of three zero notes for a decade marks a pivotal moment in Iraq's financial strategy. It is a decision aimed at promoting economic stability and gradual reform. For the Iraqi public and investors alike, this confirmation provides a clear path forward and a timeframe for adaptation to the evolving monetary landscape.

IRAQ'S CURRENCY REFORM : DELETING ZEROS IN 2024

DINAR REVALUATION UPDATE : AN OVERVIEW OF IRAQ'S CURRENCY REFORM : THE RETURN OF THE DELETE OF ZEROS IN 2024, 22 AUGUST

Iraq's Currency Reform: The Return of the Delete of Zeros in 2024

In August 2024, discussions regarding the deletion of zeros from Iraq's national currency, the dinar, have resurfaced, stirring debates across economic circles. 1 The proposition to remove three zeros from the Iraqi dinar is not a novel idea but one that has been considered in the context of broader economic reforms aimed at stabilizing the currency and boosting public confidence. 2

Objectives Behind the Deletion of Zeros

The move to delete zeros from the national currency is primarily aimed at addressing technical and operational challenges caused by the use of large denominations. This includes reducing the costs associated with the issuance and handling of banknotes, streamlining automated teller machine (ATM) operations, and simplifying banking transactions for the general public. 2

Realistic Expectations and Challenges

While removing zeros from the currency can have psychological benefits and potentially increase foreign investment in the country, it is not a panacea for inflation. As noted by economists, the impact of such a measure is limited to psychological effects unless accompanied by a series of comprehensive economic reforms. 2 These reforms should include restrictive measures such as effective monetary policies and fiscal discipline from the government.

Lessons from Other Countries

To ensure the success of the zero deletion project, Iraq could learn from the experiences of other countries that have embarked on similar currency reforms. The Turkish case is often cited as a successful example of changing national currency policies, where the reform was part of a broader strategy that included substantial policy changes and social reforms. 

Potential Impact on Economic Indicatrs

Removing zeros from the currency does not directly impact economic indicators such as demand and supply parity. Its influence is largely restricted to psychological effects on the society. Without accompanying economic reforms, these psychological benefits could be short-lived. 

Implementation Concerns and Timing

Implementation of the zero deletion project requires careful planning to avoid economic disruptions. Challenges include the printing of new currency, updating accounting systems, and training the public on how to use the new currency.  2The timing of the project is also crucial; it may have been delayed due to Iraq's political and security situation. 3

International Monetary Fund (IMF) Perspective

In their 2024 Article IV Mission to Iraq, the IMF highlighted the need for reducing oil dependence and ensuring fiscal sustainability through significant fiscal adjustment. This adjustment should focus on controlling the public wage bill and increasing non-oil tax revenues. 4 The IMF also emphasized the importance of enabling private sector development and modernizing the financial sector.

Academic Perspective

Academic research supports the notion that deleting zeros from the Iraqi currency, or redenomination, is a viable reform. However, its success hinges on the presence of the necessary will from authorities and choosing the right timing. 5