Iraqi Banks Take Charge: Financing Foreign Trade with Own Dollar Reserves!

DINAR REVALUATION UPDATE: Iraqi Banks to Finance Foreign Trade Using Own Dollar Reserves in 2024, 27 AUGUST

Iraqi Banks to Finance Foreign Trade Using Own Dollar Reserves in 2024

As of August 27, 2024, Iraqi banks have taken on the responsibility of financing foreign trade directly through the dollars they own, rather than relying on the Central Bank of Iraq's (CBI) reserves. 1 This shift marks a significant change in the country's financial operations, aiming to enhance economic stability and reduce dependency on central bank funds.

Background and Context

Iraq has been grappling with a complex financial landscape, characterized by corruption and regulatory challenges within its banking sector. 2 The decision to have banks finance foreign trade through their own dollar reserves comes amid efforts to reform the banking system and improve financial governance. 3

Impact on Foreign Trade

The move is expected to have substantial implications for the way foreign trade is conducted in Iraq. By utilizing their own dollar reserves, banks can potentially streamline transactions and foster greater independence in managing foreign currency flows. 4 This could lead to improvements in the efficiency of trade operations and a reduction in reliance on central bank interventions.

Challenges and Opportunities

Despite the potential benefits, this transition presents challenges. Banks will need to carefully manage their dollar reserves to ensure they can meet the demands of foreign trade without jeopardizing their liquidity positions. 5 It also signals a need for enhanced regulatory oversight to prevent misuse and ensure compliance with international financial standards.

Conclusion

The decision for Iraqi banks to finance foreign trade using their own dollar reserves is a pivotal step in the country's financial reform agenda. It underscores the government's commitment to modernizing the banking sector and reducing the economy's dependency on central bank resources. As Iraq continues to navigate its economic challenges, this move could pave the way for a more resilient and self-sufficient financial system.

Iraq Central Bank says regulated dollar transactions rising, 27 AUGUST

 With dollars dominating the country's economy, Baghdad has imposed a series of restrictions on the use of American greenbacks domestically. 

At the end of 2022 the country's bankings sector also adopted the international financial messaging system known as SWIFT as part of the reforms, to help tackle money laundering and ensure respect for international sanctions.

Oil-rich Iraq has no shortage of dollars, with foreign currency reserves of more than $100 billion (92 billion euros). But experts say tax evasion, the black market and dollar smuggling to countries and entities facing United States sanctions, mainly neighbouring Iran, have increased demand for foreign currencies.

Transactions through the Central Bank electronic platform -- which ensures compliance with SWIFT -- have considerably increased, the bank's vice governor Ammar Khalaf told AFP.

Many "foreign trade transactions are now being conducted via the platform," he said.

"At the beginning of 2023, transactions were at $50 million per day. Now, we have around $200 million, which is consistent with the size of Iraq's economy," he added.

Iraqi banks wanting to access dollar reserves held in the United States must make transfers through the electronic system. The US Federal Reserve will then examine the requests and block them if it finds them suspicious.

"We noticed that rejections have decreased recently because the banks understood international requirements" and traders know better what is needed to transfer their money, Khalaf said.

But the black market is still thriving. 

The official exchange rate is fixed by the government at 1,320 dinars to the dollar. On unofficial markets the dinar has been trading at 1,470 per dollar.

Iraq has close commercial ties with Iran, which also wields considerable political influence in Baghdad where its Iraqi allies dominate parliament and back the current government.

Prime Minister Mohamed Shia al-Sudani acknowledged last year that sanctions preventing dollar transfers to Iranian banks had driven Iraqi traders to the black market.

In late November, the government announced steps to encourage importers of goods like cigarettes, cars, gold and mobile phones to use official channels to obtain dollars.

Iraqi authorities have banned more than 20 Iraqi banks from conducting dollar transactions in accordance with US regulations regarding sanctions and against money laundering.

"We are in constant contact with the American Treasury in an attempt to lift the ban," Khalaf said, hoping that talks "will yield good and positive results." 

The banned banks are restricted from dealing in dollars, but they are allowed to operate local transactions.

THE START OF PAYMENTS IN EXCHANGE AND OTHER OFFCIAL BUYERS BY WOLVERINE, 27 AUGUST

 Sun. 25 Aug. 2024 Wolverine: The Start of Payments in Exchange and other Official Buyers, Greetings from Hernán Robert Hbravo:

• Today we received confirmation that Redemption Payments have begun. Operations will start being paid as follows:

• FIRST PHASE: GERMAN BONDS 1924* – SPECIAL GOLD LOAN 100 BILLION ZIMBABWE AGRO – CHECKS. 100 QUINTILLION YELLOW DRAGONS & PHOENIX

• SECOND PHASE: ZIMBABWE DOLLARS BLUE 100 TRILLION, IN FULL BOXES AND CONTAINERS. TOV BOXES – TREATY OF VERSAILLES MOTHER BOX, COMPLETE, OF 3 TRILLION. FEDERAL RESERVE CHINA RED DRAGONS BLUE LION HEADS HK$100,000,000.

• THIRD PHASE: CHINESE SUPER-PETCHILI BONDS OF 1913 CHINESE FARMERS BONDS OTHER ZIMBABWEAN HIGH FACE VALUE COINS OTHER FEDERAL RESERVE BOXES AND MINI BOXES.

• ALL PURCHASES HAVE BEEN CLASSIFIED, HOWEVER, THERE ARE STILL SOME PURCHASES AUTHORIZED BY THE FED AND REDEMPTION TO CONTINUE PLACING ASSETS. SO WE ALREADY CONGRATULATE OURSELVES AND WILL WAIT FOR THE NEXT FEW DAYS TO SEE WHAT HAPPENS. BUT PLEASE NO ONE SHOULD THINK THIS IS INSTANT, PAYMENTS TAKE TIME AND APPROVED TRADES WILL BE PAID.

• WE ALSO ANNOUNCE THAT ALL ASSETS THAT ARE REGISTERED WILL BE PAID IN ORDER OF PREFERENCE, THE FIRST WILL BE THE LARGE TRADES. WE ARE ALSO INFORMED THAT THE HOLDERS/SELLERS WHO CEASE AND DESIST AND THEIR ASSETS ARE REGISTERED AND THEY THEIRSELVES, THEIR OPERATIONS WILL BE UNKNOWN AND THEIR ASSETS WILL BE BURNED (I.E. THEY CANNOT BE SOLD ANYWHERE), TAKING INTO ACCOUNT THAT THE FUNDS ARE ALREADY DEPOSITED IN THE PAYMASTERS ACCOUNTS AND THEY ARE GIVING THE PAYMENT ORDERS, TRADE BY TRADE.

• WE ARE ALSO TOLD THAT THE TRANSACTIONS WILL NOT BE INSTANT, THAT EVERYTHING TAKES TIME, THE FIRST PAYMENT IS 1% AND THE 9% WILL BE PAID AFTER 8 DAYS, AFTER VERIFYING THE ASSETS OF THE REGISTERED OPERATIONS, THE REST WILL BE PAID IN DEFERRED INSTALMENTS.

• FINALLY, THE WAIT IS OVER, IS IT WORTH THE PAIN? ALTHOUGH MANY OF THOSE WHO STARTED THIS HARD FIGHT, WITHOUT UNDERSTANDING THE REASON, TODAY MORE THAN 22 YEARS AGO, ARE NO LONGER WITH US, NOR ARE THEY WITH US TODAY. ARE THEY NO LONGER WITH US, NOR WILL THEY BE ABLE TO CELEBRATE IT?

• A HUGE CHEERS AND A TOAST TO THE SUN, IN THANKS TO ALL OF THEM, DRIVING FORCES BY WHICH TODAY WE CAN CELEBRATE AND GIVE FREE REIN TO OUR DREAMS.

• Mon. 26 Aug. 2024 Gold and Silver Legal Tender States 2024 (43 and counting)Eleven U.S. states accept gold and silver coins as legal tender, and more states have either tried to reintroduce gold and silver as currency or are in the process. The shift is rooted in Article 1, Section 10 of the U.S Constitution, stating that “No State shall make any Thing but gold and silver Coin a Tender in Payment of Debts.”

Iraq Ditches the Dollar: The Petro-Dinar Revolution!

DINAR REVALUATION UPDATE: Iraq's Move to Peg the Dinar to Petro-Dinar Instead of Petro-Dollar, 27 AUGUST

Iraq's Move to Peg the Dinar to Petro-Dinar Instead of Petro-Dollar

In a significant shift from traditional practices, Iraq is reportedly considering pegging the Iraqi dinar to a petro-dinar instead of the petro-dollar as of August 27, 2024. 1 This move is a response to US sanctions and the ongoing devaluation of the dinar, which has prompted the Iraqi government to explore alternative currencies for its oil trade.

Background and Motivation

The Finance Committee in the Iraqi parliament has called for the sale of oil in currencies other than the US dollar. 1 The motivation behind this decision is to counter US sanctions on the Iraqi banking system and stabilize the dinar's exchange rate. The US Treasury's restrictions, under the pretext of preventing money laundering, have led to sanctions on several Iraqi banks, causing volatility in the dinar's value. 1

Impact on the Iraqi Dinar

The shortage of dollars in Iraq has led to a devaluation of the Iraqi dinar, with the government imposing a ban on personal and business deals in US dollars.  2 This ban has affected the buying power of Iraqi citizens, who typically use dollars for large transactions due to the lack of trust in the dinar.

Currency Substitution Trend

Iraq's move towards the petro-dinar is part of a broader trend of currency substitution in the Middle East. 2 Countries like Saudi Arabia and the United Arab Emirates are also exploring alternatives to the US dollar, considering transactions in euros, Chinese yuan, and Indian rupees for their oil trade.

Prospects for the Petro-Dinar

Pegging the dinar to a petro-dinar could potentially stabilize Iraq's economy by reducing dependence on the US dollar and its associated sanctions. 1 This shift could also foster stronger economic ties with countries that have been affected by US sanctions, such as Iran.

Conclusion

Iraq's decision to move from the petro-dollar to the petro-dinar for its oil trade is a strategic move aimed at countering US sanctions and stabilizing the national currency. This shift reflects a broader trend in the Middle East towards currency substitution, with countries seeking to diversify their financial systems and reduce reliance on the US dollar.

WHEN THEY DO LIBERATE THE DINAR BY MNT GOAT, 27 AUGUST

MNT GOAT

 When they do liberate the dinar, it will include two main steps in the process. Please go to my blog to read all about these upcoming steps. 

They CAN NOT and WILL NOT just jump to reinstate without first following a process of the Project to Delete the Zeros.

 I have explained this process many times already to you. You can read it and follow it HERE.  But today’s news is also about deciding whether they will peg the Iraqi dinar to a petro-dinar instead of petro-dollar?

 Yes, you heard right. Didn’t I talk about this months ago?

 Didn’t I tell you my CBI source told me they were considering this? How risky is it? Is this really Dr. Shabibi’s plan? Let’ talk about it in more detail.