Friday, August 30, 2024
DINAR REVALUATION REPORT: Central Bank of Iraq Delegation Visits US to Discuss Banking Sector Challenges, 30 AUGUST
Central Bank of Iraq Delegation Visits US to Discuss Banking Sector Challenges
A high-level delegation from the Central Bank of Iraq (CBI), led by Governor Ali al-Alaq, has arrived in the United States to engage in crucial discussions regarding the state of Iraq's banking sector. The visit, which commenced on August 26, aims to address the evolving challenges within the industry, particularly the restrictions imposed on the use of the US dollar by numerous private Iraqi banks.
Background and Context
Iraq's banking sector has faced significant challenges in recent years, including a shortage of liquidity, limited access to credit, and a lack of confidence in the banking system. The country's economy has also been impacted by the COVID-19 pandemic, which has exacerbated existing issues. The CBI has been working to implement reforms and strengthen the banking sector, but the restrictions on using the US dollar have posed a significant obstacle.
Key Issues to be Discussed
The CBI delegation is expected to discuss several key issues with US officials, including:
- Restrictions on US dollar usage: The delegation will likely seek to address the restrictions imposed on private Iraqi banks, which have limited their ability to conduct transactions in US dollars. This has had a significant impact on trade and commerce in the country.
- Banking sector reforms: The CBI has been working to implement reforms aimed at strengthening the banking sector and improving its stability. The delegation may discuss these reforms with US officials and seek guidance on best practices.
- Anti-money laundering and combating the financing of terrorism (AML/CFT): Iraq has been working to improve its AML/CFT framework, and the delegation may discuss progress in this area with US officials.
Implications and Expectations
The visit by the CBI delegation is seen as a positive step towards addressing the challenges facing Iraq's banking sector. The discussions with US officials are expected to provide valuable insights and guidance on how to overcome these challenges. The outcome of the visit may have significant implications for the Iraqi economy, including:
- Improved access to credit: Easing restrictions on US dollar usage could improve access to credit for Iraqi businesses and individuals.
- Increased confidence in the banking system: Strengthening the banking sector and improving its stability could increase confidence in the system and encourage more people to use banking services.
- Enhanced economic growth: A stronger banking sector could contribute to enhanced economic growth in Iraq, which has been impacted by years of conflict and instability.
The visit by the CBI delegation is a crucial step towards addressing the challenges facing Iraq's banking sector. The discussions with US officials are expected to provide valuable insights and guidance on how to overcome these challenges and promote economic growth in the country.
Source: Central Bank of Iraq delegation visits US to discuss banking sector, 30 AUGUST
Shafaq News/ A delegation from the Central Bank of Iraq (CBI) is currently in the United States to review the state of Iraq's banking sector, a source disclosed on Thursday.
Led by Central Bank Governor Ali al-Alaq, the delegation arrived on August 26 and included several senior officials. The talks focus on the evolving situation within Iraq's banking industry and the restrictions placed on using the US dollar by numerous private Iraqi banks.
"The discussions include the potential elimination of the current currency platform at the start of next year, with a shift towards relying on correspondent banks.
This change could impose additional constraints on private Iraqi banks and potentially reduce competition in favor of Jordanian banks with established American correspondent relationships." The source explained.
The Central Bank of Iraq is also nearing a contract with Oliver Wyman, a consulting firm, to conduct a study aimed at reforming the Iraqi banking sector. The findings of this study are expected to guide future reforms, he added.
"THERE WILL BE NO LOP!" BY FNU LNU, 30 AUGUST
Fnu Lnu
...Crazy rumor is that the Dinar will be constant or fixed "In Country", but will float for the rest of the world. This is not true. The species of note in country will be the smaller denomination ONLY.
However, the species of note for the rest of the world will include the three zero notes which will bear the same exchange rate. The only difference is that it will be multiplied by the thousands. (Three Zeros)
There will be NO LOP!
It has been repeatedly stated that both species will co-exist for a period of ten years. Nothing has changed since I was told this 14 years ago.
Why these rumors start to surface periodically, usually when the RV seems to be imminent, is a mystery to me.
"A SCAM WOULD NOT ALLOW THIS" BY FRANK26, 31 AUGUST
KTFA
FRANK26: "A SCAM WOULD NOT ALLOW
THIS"............F26
The Central Bank announces the participation of Iraqi banks in external transfers in multiple currencies
August 30, 2024
The delegation of the Central Bank of Iraq in New York announced the start of the new phase of foreign transfer operations with the participation of (13) Iraqi banks, in an important step aimed at enhancing the diversity of currencies and facilitating international transfer operations.
This announcement came after reaching an agreement on the mechanisms for regulating these operations, as it will include dealing in the euro, Chinese yuan, Indian rupee, and UAE dirham.
The delegation confirmed the definition of the scope of work of the international auditing company E&Y, which will review the transfer operations to ensure their safety and compliance with international standards. This step is a reflection of the Central Bank of Iraq's commitment to achieving the highest levels of transparency and security in all foreign transfer operations, and enhancing confidence in the Iraqi financial system.
This initiative came within the framework of the Central Bank of Iraq's ongoing efforts to support economic growth and expand the horizons of international cooperation with global markets.
Central Bank of Iraq
Media Office
August 30, 2024
#########
8/30/2024
Baghdad - WAA
The Central Bank of Iraq announced, today, Friday, the participation of 13 Iraqi banks in the external transfer.
A statement by the bank - received by the Iraqi News Agency (INA) - stated that "the delegation of the Central Bank of Iraq announced in New York the start of the new phase of foreign transfer operations with the participation of (13) Iraqi banks, in an important step aimed at enhancing the diversity of currencies and facilitating international transfer operations."
The statement added that "the announcement came after reaching an agreement on the mechanisms for regulating these operations, as it will include dealing in the euro, Chinese yuan, Indian rupee and Emirati dirham."
The delegation confirmed - according to the statement - "determining the scope of work of the international auditing company E&Y, which will review the transfer operations to ensure their safety and compliance with international standards. This step is a reflection of the Central Bank of Iraq's commitment to achieving the highest levels of transparency and security in all foreign transfer operations and enhancing confidence in the Iraqi financial system."
The statement concluded that "this initiative came within the framework of the Central Bank of Iraq's ongoing efforts to support economic growth and expand the horizons of international cooperation with global markets."
DINAR REVALUATION REPORT: Iraq's Currency Reform: Conditions for Removing Three Zeros from the Dinar, 30 AUGUST
Iraq's Currency Reform: Conditions for Removing Three Zeros from the Dinar
In the midst of ongoing discussions regarding Iraq's currency reform, the Prime Minister's financial advisor, Mazhar Mohammed Saleh, has made a significant statement about the prospects of removing three zeros from the Iraqi currency as of August 29, 2024. Saleh emphasized that the government is currently ruling out the removal of zeros at this juncture, citing the need for two primary conditions to be met before such a measure could be considered.
Two Conditions for Currency Reform
Saleh clarified that removing three zeros from the currency does not directly correlate with the value of the currency itself. Instead, this action is more closely associated with improving cash payment systems. The advisor outlined two essential conditions that must be achieved before the government could proceed with the removal of zeros:
1. Adequate Stock of Foreign Currencies and Gold
According to Saleh, the country needs to ensure a sufficient stockpile of foreign currencies and gold reserves. This condition is crucial for stabilizing the economy and supporting the value of the new currency.
2. Enhanced Cash Payment Systems
The advisor also stressed the importance of upgrading the country's cash payment systems. Modernizing these systems would facilitate smoother transactions and improve the efficiency of the financial sector.
Challenges and Considerations
The removal of zeros from a currency is a complex procedure that demands careful planning and execution. Challenges include the printing of new currency, modifications to accounting systems, and the need for comprehensive training on how to use the new currency. Initially, there could be confusion among residents and consumers. If not implemented properly, this process might disrupt economic activities. Therefore, it is imperative that any such reform is executed with meticulous planning to achieve its intended goals.
Historical Context
Iraq's Central Bank has previously considered removing three zeros from the dinar as part of a strategic plan to reduce transaction costs and ease the burden of carrying large amounts of cash. Such a move is not unprecedented, with countries like Turkey and Venezuela implementing similar measures in 2005 and 2021, respectively .
The Way Forward
As of August 30, 2024, the Iraqi government is not actively pursuing the removal of three zeros from the currency. However, this decision is subject to change based on the evolving economic landscape and the country's ability to meet the outlined conditions. The focus currently lies on strengthening economic fundamentals and ensuring that the financial infrastructure is robust enough to support any future reforms.