IRAQ'S BOLD MOVE: DE DOLLARIZATION IN 2024

DINAR REVALUATION REPORT: Understanding the Fluctuation of Gold Prices in Iraq as of September 2024, 3 SEPT

 Understanding the Fluctuation of Gold Prices in Iraq as of September 2024

Gold, a timeless precious metal, has always held a significant place in the global economy, serving as a safe haven for investors and a store of value during times of economic uncertainty. 1 In Iraq, the story of gold price fluctuations in September 2024 is no different, influenced by a complex interplay of global factors rather than internal dynamics. 4

Global Influences on Gold Prices in Iraq

Central Bank Purchasing Trends

One of the most notable global drivers of gold's price surge has been the aggressive purchasing by central banks worldwide. Many countries seek to diversify their reserves, often turning to gold as a safe and stable asset. 2

Investment Strategies and Economic Indicators

The price of gold is highly sensitive to global economic conditions. Inflation rates, interest rate environments, and geopolitical tensions all impact gold's appeal as a safe haven investment.  1

Commodity Market Dynamics

Gold, as a commodity, is subject to global market forces. Supply and demand, influenced by factors such as industrial usage, jewelry demand, and speculative investment, drive its price fluctuations. 3

Iraq's Perspective on Gold as a 'Safe Haven'

Iraq's financial and economic advisor, Mazhar Salih, highlights that gold has historically been a safe haven for preserving wealth's purchasing power. 4 The Iraqi government encourages the import of gold, recognizing its role in wealth preservation at both state and individual levels.

Gold Prices in Iraq: Historical and Current Trends

As of September 2024, the price of gold in Iraq has been rising, influenced by global trends. Data from the International Monetary Fund shows that Iraq's gold reserves have also seen a significant increase, with the country holding approximately 148 tons of gold, constituting 10% of its foreign currency reserves. 4

Conclusion

The fluctuation of gold prices in Iraq during September 2024 is a reflection of broader global economic forces and investment strategies, rather than isolated domestic factors. As a globally traded commodity, gold's price is influenced by an array of international dynamics, from central bank purchasing to economic indicators and broader market conditions. 5

Al-Sudani's advisor explains the reasons for the fluctuation of gold prices in Iraq, 3 SEPT

 Al-Sudani's advisor explains the reasons for the fluctuation of gold prices in Iraq

The financial and economic advisor to the Prime Minister, Mazhar Salih, said today, Monday, that the reasons for the fluctuation of the price of gold in Iraq are not internal, but rather global, indicating that the Iraqi government encourages the import of gold because it is a “safe haven” for wealth.

At the state or individual level, gold has historically been a safe haven for preserving the purchasing power of wealth, as people keep gold for that purpose, and the cycle of gold assets between rising and falling is usually slow. If we take the cycle of assets, we find gold, almost as an average, as it is of constant value among other wealth,” Saleh told Al Furat News Agency, explaining that “society has historically been accustomed to keeping gold as a tendency to preserve personal wealth.”

He added, "In the modern era, the state keeps part of its foreign reserves supporting the national currency in gold. For example, Iraq keeps about 148 tons of gold, which constitutes 10% of its foreign currency reserves."

During the past month of February, Iraq's gold reserves witnessed a significant increase, as data from the International Monetary Fund showed that Iraq had increased its holdings of the precious metal by 3,079 tons, bringing the total to 145,661 tons.

He continued, "The reserves are a diversified investment portfolio of gold and currencies such as the dollar, euro, pound, yuan, yen, and others," describing this diversity as "based on basic global evidence, and it is not arbitrary."

He pointed out that "this evidence was made in agreement with the International Monetary Fund, in terms of the percentages of monetary gold that support and are considered a cover for the Iraqi dinar."

He stressed that the global standard for this is 10%, considering gold “not easy for fast payment operations and others, and it is heavy, but it is part of protecting reserves and confronting fluctuations in currency values.”

He explained that "the gold asset cycle is slow, so keeping it protects reserves from currency fluctuations. Iraq is not a maker of gold prices in global markets, but rather a recipient, because we are not a country that possesses gold wealth, but rather we import gold. Therefore, the entry of gold into

Iraq is a good wealth that is better than the entry of consumer goods that are not valuable and drain resources. Gold is a "precious wealth for the future," noting that "the gold discovered in the world is approximately 75%, and it is limited and not extensive, so central banks are pushing to keep a minimum amount of gold."

He stressed that "the policy of encouraging the entry of gold into Iraq is an import of wealth, and as assets they represent good stores of wealth, so the state encourages this and the customs taxes on them are moderate," indicating that "the gold markets in Iraq depend on two things: its price in the world and the extent of the rise or fall of the dollar, and we receive external visas at the value of gold and the dollar," considering encouraging the flow of gold into Iraq "a good thing. Recently, the price of gold has risen in Iraq, as the price of a mithqal (5 grams) has exceeded 500 thousand Iraqi dinars."   link

LATEST FROM MARKZ: " ..TOMORROW COULD BE OUR BIG DAY" , 3 SEPT

 MarkZ   

[via PDK]

  There is a lot of chatter about tomorrow being our big day. Guess we will find out then-if not sooner. Today banks are closed...

My Iraq folks are bouncing with anticipation for the next 3 days.We are hearing all kinds of rumors that everything started ripping yesterday and they are “releasing the hounds of the RV”...Tons of rumors. Tons of contacts saying “This is it”...  

Guess we will find out tomorrow...Stay calm...But I can tell you I’m blown away by the number of people convinced it's all about to be seen.

--

"THE DELETING THE ZEROS PROJECT IS BACK IN MAJOR CONVERSATIONS IN IRAQ" BY MARKZ, 2 SEPT

MarkZ 

  [via PDK]

  The Deleting the zeros project is back in major conversations in Iraq.

 I want to make certain you all know how that process works.  They raise the purchasing power…they increase the purchasing power of the dinar. Then they issue lower denominations.  They do not just chop off the zeros…..but using the large 3 zero notes would become unwieldy. They have been very clear on this from government documents, Sudani and Shabibi.

 MarkZ 

  [via PDK] 

  Comment:   ...13 Iraqi banks now trading international currency.  MarkZ:  I think that one is very important. They can now exchange back and forth in different currencies. The mechanism to exchange foreign currencies went live…I think this one is huge.

  I did get an update this morning from a redemption center contact. They very much still expect to be called into work this weekend.  Their chain of command said to expect to work before Tuesday.  This is excellent news.

 ...my redemption folks...are on call…but they have been told to expect to work at some point over this long weekend. Since it's Labor Day Weekend…This is unusual.

https://dinarevaluation.blogspot.com/2024/09/rv-update-by-markz-2-sept.html

IRAQ IS STRENGTHENING THE IRAQI DINAR THRU THE DE-DOLLARIZATION 2024

DINAR REVALUATION REPORT: "THE CBI AIMED TO STRENGTHEN THE IRAQI DINAR" , 3 SEPT

 Impact of Iraq's Currency Basket Diversification on Dollar Demand

In September 2024, Iraq's Central Bank embarked on a significant initiative to diversify its currency basket, marking a pivotal step in the country's financial strategy [1].

 This move was spurred by the successful negotiations in Washington, which underscored the necessity for Iraq to reduce its heavy reliance on the US dollar [1].

 The diversification aims to decrease the demand for the dollar within Iraq's commercial transactions, thereby enhancing the country's economic resilience and sovereignty [1].

Context of Diversification Efforts

Iraq's decision to diversify its currency basket was informed by several factors.

 Firstly, the country sought to mitigate the risks associated with overdependence on the US dollar, given the potential for geopolitical tensions to influence exchange rates [1]. 

Secondly, the Central Bank aimed to strengthen the Iraqi dinar by limiting the dominance of foreign currencies in local transactions [6]. This move was also a response to the illicit activities and tax evasion facilitated by a thriving black market for dollar transactions [6].

Shift in Currency Usage

The Iraqi government's prohibition on the use of USD for domestic transactions in May 2023 was a bold step towards de-dollarisation [6]. 

This was complemented by the decision to permit trade with China to be settled in the Chinese Yuan (CNY), further diversifying the country's currency portfolio and strengthening its economic ties with China [6].

Challenges and Opportunities

The path to de-dollarisation, however, is fraught with challenges. 

Public confidence in the Iraqi dinar is a critical hurdle, with many individuals preferring the perceived stability of the US dollar [6]. 

Moreover, Iraq's financial system and economy must be robust enough to support a transition away from the global reserve currency [6].

Despite these challenges, diversification presents Iraq with the opportunity to enhance its economic independence and reduce vulnerability to external economic shocks [1]. By reducing the demand for the dollar, Iraq can assert greater control over its financial system and potentially stabilize its domestic currency [1].

International Repercussions

The international implications of Iraq's de-dollarisation efforts are significant. Other countries, such as China and BRICS members, have also advocated for de-dollarisation to diminish US economic and political influence [6]. Iraq's move could encourage a broader trend towards diversifying global currency usage, potentially leading to a more balanced international monetary system [6].

Conclusion

Iraq's Central Bank's diversification of its currency basket is a strategic move aimed at reducing the country's reliance on the US dollar. 

By decreasing the demand for the dollar in commercial transactions, Iraq is working towards greater economic stability and independence. 

While challenges remain, the long-term benefits of this initiative could significantly bolster the Iraqi economy and contribute to a more equitable global financial landscape [6].

ABOUT THE SUCESS OF THE RECENT NEGOTIATIONS IN WASHINGTON BY MILITIAMAN, 3 SEPT

 Militia Man 

 Article: "After the success of the recent negotiations in Washington...the Central Bank succeeded...in diversifying the basket of commercial currencies.  Indicating this will lead to a significant decrease in the demand for the dollar...

This meeting with...the Central Bank of Iraq...US Federal Reserve and US Treasury, which lasted for 3 days..." 

 Commercial currencies with the Iraqi dinar.  They're not going to do that at 1310...

When things change everybody's going to be ready to do business with Iraq.

 One of the hopes is Iraq is going to try to work with other countries in the region to defend their currency.

  They're going to try to keep it as stable as they possibly can.  Having flexibility to the exchange rate so they can move it a little bit here and there so they can inject money, take money out or buy and sell the dinar etc is something they've got on their mind.