Wednesday, September 18, 2024
Al-Alak confirms that transfers are subject to scrutiny, 19 SEPT
Mawazine News – Economy
The Governor of the Central Bank of Iraq, Ali Al-Alak, announced on Wednesday that all remittances would be subject to audits, while pointing out that the decline in oil prices has nothing to do with the rise in exchange.
According to the official agency, Al-Alak said that “the Central Bank provides the dollar at the official price for all commercial and personal channels, travelers and for all types of operations that represent legitimate activities, operations and requests.”
He pointed out that “any price outside the country is a price that is only indicated for the existence of abnormal operations that try to get out of the official and legal system and the correct fundamentalist channels,” stressing the need to “focus on the amount of sale made by the central bank at the official price and the demanders of the dollar, whether they are traders, importers, individuals or travelers.
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He pointed out that “ways have been put in place for each channel that ensures the provision of dollar on the one hand and a very large amount of control to verify the integrity of previous operations before their implementation,” pointing out that “this is a major shift in external transfers, as they were previously being scrutinized at a later stage, and today all transfers are not carried out and are not carried out until after they undergo the audit process.”
He pointed out that “the decline in the price of oil has nothing to do with the rise in the exchange rate because Iraq has reserves for foreign currencies, which enables it to defend the exchange rate.”
LATEST FROM MAKRZ, 19 SEPT
MarkZ
[via PDK] Question: …about a month ago you talked about how your contacts said your Dinar estimate was “way too low.” You were at like $3.70…so are we talking about $5? $7? $10?
MarkZ: All they are telling me is my estimates are way too low.
MarkZ
[via PDK] I ...heard they [rates on bank screens] are changing and fluctuating. I am hoping this means they are priming the system again. My banking contacts say they are seeing many different rates…rates are rolling all over the place…Hopefully they are checking the system and priming the system….
Member: Is Zim still supposed to be in the first basket?
MZ: That is what I believe and what I hear from my best contacts…
Member: According to Militiaman the HCL is finished.
Member: Who gives Iraq permission to go???
MZ: At this point I believe it’s a compilation of the IMF, World Bank and the UN …but it is very confusing. The president of Iraq says it's up to the CBI now….But , if it’s up to the CBI I am thinking they would already have released it.
Member: Mark- Do you believe the new lower denoinations have already been printed in Iraq?
MZ: Yes I do…We have seen the contracts years ago and the paid receipts from the government of Iraq with DeLaRue to print them…... Many contacts in Iraq have seen the cut sheets (samples of LD’s) in banks.
DINAR REVALUATION REPORT: Steps Iraq Needs for Dinar Reinstatement, 18 SEPT
Steps Iraq Needs for Dinar Reinstatement
Iraq's aspirations to reinstate the Iraqi Dinar to its former rate of $3.22 against the US dollar requires a series of strategic monetary and economic reforms.
Monetary Reforms
Enhancing Monetary Policy
Iraq must implement robust monetary policies to stabilize its economy and control inflation. This includes adjusting interest rates and conducting open market operations to influence the money supply and stabilize the Dinar's value.
Currency Reforms
Iraq should consider currency reforms, such as redenomination or deleting zeros from the currency, to simplify transactions and reduce the volume of cash in circulation.
Economic Diversification
Decreasing Oil Dependency
Iraq needs to reduce its heavy reliance on oil revenues by diversifying its economy. This involves developing other sectors like agriculture, manufacturing, and services to create a more balanced economic structure.
Improving Trade Balance
Enhancing exports and reducing unnecessary imports can support a stronger Dinar by improving the country's trade balance.
Internal Stability
Inflation Monitoring
Maintaining internal stability involves monitoring and managing inflation rates to ensure that the Dinar's purchasing power is not eroded.
Political Stability
Political stability is crucial for economic confidence and foreign investment. A stable government can implement and enforce necessary reforms.
International Relations
IMF and World Bank Support
Cooperation with international financial institutions like the IMF and World Bank can provide technical assistance and financial support for economic reforms.
Foreign Investment
Iraq should attract foreign investment by improving its business environment, offering incentives, and ensuring the rule of law.
Strengthening Trade Ties
Developing stronger trade relationships with other countries can enhance Iraq's economic stability and Dinar's value.
Conclusion
Reinstating the Iraqi Dinar to its historical rate of $3.22 is a complex endeavor that necessitates comprehensive reforms in monetary policy, economic diversification, internal stability, and international relations. Iraq must balance these factors to create a conducive environment for the Dinar's value to strengthen.
PIMPY: "What does Iraq need to do right now to reinstate their old rate of $3.22?, 18 SEPT
Pimpy
Question: "What does Iraq need to do right now to reinstate their old rate of $3.22?"
Professor Boskin [of economics] graciously shared the following information which I am pleased to relay to you...It should be able to give you an idea of how far away this thing might be...
The first thing he's talking about is implementing monetary reforms.
PIMPY: We've been hearing about that for years so we know they definitely are implementing monetary reforms.
PROFESSOR: ...The Central Bank of Iraq may consider removing zeros..
. PIMPY: Obviously if they're going to remove the zeros off the currency, they're going to re-denominate and print new bank notes.
PROFESSOR: Establish a currency basket system...the value of the dinar would be determined against a weighted average of several currencies...
Reduce their dependency on the dollar.
PIMPY: At the beginning of this year they were not supposed to use the US dollar anymore.
PROFESSOR: ...Focus on diversifying its economy beyond oil dependency...
PIMPY: Right now...only 89% of [the budget] is dependent on oil sales. A lot better than where it was.
PROFESSOR: Improve trade balance...Enhancing exports...Reducing unnecessary imports ...thereby supporting a stronger dinar.
PIMPY: They have things to trade but not a whole lot of options.
PROFESSOR: Maintain internal stability...Monitor inflation rates...
PIMPY: Right now Iraq is somewhere around 5%...He's saying if they want to reinstate the $3.22 rate these things have to be taken care of. I do find it interesting we've been listening to them talk about deleting the zeros and he's put that in here...A lot of this stuff Iraq has already started...Kudos to Al-Sudani.
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