Summary of the YouTube Video: "Iqd # Iraq Economy"
In a recent meeting on Monday evening, Iraqi Prime Minister Muhammad Shia Al Sudani hosted U.S. Deputy Treasury Minister Wally Adamo and several officials from the Treasury Department. According to a statement from the Prime Minister's office, the discussion centered on enhancing bilateral economic relations between Iraq and the United States across various critical sectors.
The meeting highlighted the Iraqi government's dedication to economic and financial reform, with a focus on diversifying domestic production and promoting development goals. Key achievements were discussed, including significant advancements in combating money laundering.
Prime Minister Al Sudani noted that Iraq had made substantial progress in financial and banking reforms, with 95% of bank transfers now processed through an electronic platform. He anticipates completing the remaining 5% by the end of the year, after which the country will transition to a correspondent bank system. This aligns with the government's commitment to elevating the capabilities of Iraqi banks to meet international standards and cater to an increasingly robust investment environment.
Deputy Minister Adamo praised Iraq's rapid progress in economic and banking reforms, noting a notable economic growth rate of 6%. He expressed readiness for continued cooperation to foster a bilateral partnership aimed at supporting Iraq's economic development
Removing Zeros from the Iraqi Dinar: Currency Reform in 2024
The debate over removing three zeros from the Iraqi dinar is once again a topic of discussion. The process, if executed alongside substantial economic reforms, could potentially strengthen the currency and streamline financial transactions.
Advantages of Removing Zeros
The removal of zeros from a currency can have several benefits:
Elimination of Technical and Operational Issues: Handling large denominations can be cumbersome and can cause logistical and operational problems.
Reduction in Costs: The process can save costs associated with the printing and management of high-denomination banknotes.
Facilitation of ATM Transactions: Smaller denominations are easier to manage and process through automated teller machines.
Simplification of Banking: It can simplify banking transactions and reduce the risk of errors.
Enhanced Foreign Investment: A more simplified currency system can make the country more attractive to foreign investors.
Psychological Boost: The public may perceive the currency as stronger, potentially increasing confidence in the government's economic policies.
Limitations and Necessary Precautions
However, removing zeros from the currency alone will not eliminate inflation. It is crucial to implement this measure within a broader framework of economic reforms, such as:
Monetary Policies: Tighter monetary policies can help control inflationary pressures.
Fiscal Discipline: Fiscal discipline ensures that the government's spending is in line with its revenues, preventing excess deficits that can lead to inflation.
Regulatory and Supervisory Rules: Strong regulations and supervision of the financial sector can prevent risks and protect the rights of shareholders and stakeholders.
Historical and Comparative Perspectives
The Central Bank of Iraq constantly reviews the deletion of zeros from the dinar, acknowledging that this process is often undertaken to revalue the national currency and simplify financial transactions.
A comparative analysis of other countries' experiences, such as Turkey's successful currency reform, can provide insights into best practices and potential pitfalls to avoid. Turkey's reform was part of a broader set of policies that included social changes, demonstrating that currency reform must be accompanied by other economic measures to be effective.
Recommendations
As the Iraqi government considers removing zeros from the dinar, it should:
Study Successful and Failed Cases: Analyze the Turkish success and Argentinian failure to understand the critical factors for a successful currency reform.
Implement Complementary Reforms: Coupling the removal of zeros with other economic reforms will ensure a more stable and credible currency.
Monitor Global Economic Challenges: The Central Bank should continue to respond to global economic challenges, such as rising energy and raw material prices, to maintain confidence in the Iraqi dinar.
Conclusion
While removing zeros from the Iraqi dinar can have psychological and practical benefits, it should not be viewed as a panacea for economic issues. The effectiveness of such a measure depends on its integration into a comprehensive set of economic reforms aimed at stabilizing the currency and boosting the economy.
Removing zeros from the Iraqi dinar is back in the spotlight..Strengthening the currency or just changing its form?
Talk has returned again about the process of removing zeros from the local Iraqi currency, as the Central Bank of Iraq confirmed that the project to remove zeros from the dinar is subject to continuous review and study.
Countries remove zeros from their currency to revalue their national currency and simplify financial transactions. This is done by removing a specific number of zeros from the nominal value of the currency, making it appear less inflationary and more stable.
The central banks of these countries usually issue a new currency, equal in value to one hundred thousand or one million of the old currency, with the old currency gradually being withdrawn from the markets, after a period in which the two currencies are allowed to be used side by side. The most famous countries that have implemented this process, more than once, successfully were Turkey and the former Yugoslavia.
In his statements, Ali Mohsen Al-Alaq, Governor of the Central Bank of Iraq, considered that the bank responded to global economic challenges such as rising energy and raw material prices by amending some monetary policies in line with the international situation and to enhance confidence in the Iraqi dinar and prevent a sharp decline in its value.
Al-Alaq pointed out that the Central Bank of Iraq increased its holdings of foreign exchange and gold reserves to strengthen the country's financial position and stability, in order to enhance its ability to confront potential economic crises.
Commenting on this, economic researcher Ali Daadoush said in an interview with Al-Mada, “The process of deleting zeros is linked to the Central Bank of Iraq,” indicating that “the issue is not new and was previously discussed about 14 years ago. “
Daadoush pointed out that "the process of deleting prices is psychological, as the commodity worth a thousand dinars will be worth one dinar and remain at the same value."
The economic researcher pointed out that "removing zeros leads to flexible dealing with the local currency and strengthens it, and may lead to increased production and diversification of the economy, and thus enhance the value of the Iraqi dinar."
For his part, economic affairs expert Mustafa Hantoush said in an interview with Al-Mada, “The issue of removing zeros from the Iraqi currency is only arithmetic and keeps the currency at the same value. That is, when you sell a house for 100 million, it will be sold for 100 thousand.”
Hantoush added that "countries resort to deleting zeros when there is an expansion in the value of the printed currency and problems occur in the book value and accounting entries, for the purpose of restoring accounting balances."
The economic researcher went on to say, “Iraq is currently suffering from problems with the exchange rate,” indicating that “the value of printing and replacing the currency costs Iraq time, effort and millions of dollars.”
Hantoush said, “The situation now requires focusing on how to maintain the value of the Iraqi currency against foreign currencies.”
According to the latest data, the Central Bank of Iraq's foreign reserves cover 83.62% of the broad money supply, which covers the cost of importing 15 months, while the global standard rate is 20%, covering 6 months of importing.
Foreign exchange reserves are a tool used by all central banks to maintain the stability of the local currency exchange rate against foreign currencies, as well as to reduce exposure to external crises by maintaining liquidity in foreign currency to absorb shocks in times of crisis.
The Iraqi currency is under great pressure, which has caused its price to decline against the dollar during the past period, including the increase in the Iraqi budget deficit. Two weeks ago, Mazhar Salih, financial advisor to Iraqi Prime Minister Mohammed Shia al-Sudani, said that Iraq will face a budget crisis in 2025 due to the decline in oil prices, the country's main source of revenue. Salih said in an interview with Reuters: “We do not expect major problems in 2024, but we need stricter financial discipline in 2025.” link
Member: So are we waiting for an event or is Iraq far enough along to say “Just do it”???
MZ: I always heard there would be a distraction event….we shall see. But I think they have already started the process and its rolling out. We just don’t know the process enough to gauge the timing. They will keep grinding away at it until its seen at every level. imo
Member: Has the HCL (Hydro Carbon Law) in Iraq passed yet?
MZ: Not officially announced yet….but we are seeing signs of it in the salaries being paid , money moving and the Kurdish region just sent around $100 billion in non oil revenue and taxes to the Baghdad treasury. Seems to be enormous things happening around the HCL.
Member: Did Zimbabwe just get liberated ?! Title deeds to land being given out to humanity, along with trust funds set up for the people
Member: What are the best currencies to have?
MZ: My favorites are IQD, VND, Indonesian Rupiah , Zim …….have you noticed Iraq is meeting with Vietnam, Indonesia and all countries with all the currencies we hold. Interesting.
Thank you MarkZ for all your time, and encouragement daily….. PDK
MarkZ Update- Some highlights by PDK-Not verbatim
MarkZ Disclaimer: Please consider everything on this call as my opinion. People who take notes do not catch everything and its best to watch the video so that you get everything in context. Be sure to consult a professional for any financial decisions
Member: Good Morning Everyone! RV There Yet???
Member: Feeling like something good is about to happen!
Member: So, I have theory on the Dinar RV; Al Sudani ended his UN meetings in NYC yesterday. He gets home, tells his citizens FIRST then announces to the world! So tomorrow seems appropriate for me.
Member: Let’s all pray your theory is right!!
Member: Next week starts our new fiscal year…..could that be what they are waiting for ?
MZ: Good question….sure looks like they are preparing
Member: Seeing that the Fiscal year ends on Sept. 30th could this be the when the reset happens ????
Member: it looks like lots of changes coming Oct 1st due to the new fiscal year….That is next Tuesday or one week from today.
Member: Maybe the reason the budget will not pass and close down the government is to force banks to be Basal 3 and the new fiscal year as a republic with USTN
Member: Oct 1st - all banks must be Basel 3 compliant - think things will shake up in the banking world? Curious to see this impact.
Member: A rumor is the US Corporation goes away on October 1 as well as all out bogus, fiat money
MZ: Overnight last night was quiet on the bond side and Prosperity Package side for me….It’s like the whole world is waiting for an event. The question is “What event”???
MZ: Hopefully the quiet means there are more NDA’s, and I know many are moved into position. I just have not heard what to expect on timing….I hope the quiet is because of how close we are.
Member: So are we waiting for an event or is Iraq far enough along to say “Just do it”???
MZ: I always heard there would be a distraction event….we shall see. But I think they have already started the process and its rolling out. We just don’t know the process enough to gauge the timing. They will keep grinding away at it until its seen at every level. imo
Member: That’s one heck of a slow roll out…..snails in molasses in February are faster than this roll out.
Member: I wonder what are you contacts saying now that it didnt happen in the last few days?
Member: I still think it could be a shotgun start?? Bonds and T4b at same time??
Member: For those asking about the dinar: .00076 take three zeros off .76. That makes your currency more valuable.
Member: Has the HCL (Hydro Carbon Law) in Iraq passed yet?
MZ: Not officially announced yet….but we are seeing signs of it in the salaries being paid , money moving and the Kurdish region just sent around $100 billion in non oil revenue and taxes to the Baghdad treasury. Seems to be enormous things happening around the HCL.
Member: Bara and Jentell thinkin tomorrow morning they pull the trigger on the RI…
Member: Did Zimbabwe just get liberated ?! Title deeds to land being given out to humanity, along with trust funds set up for the people
Member: What are the best currencies to have?
MZ: My favorites are IQD, VND, Indonesian Rupiah , Zim …….have you noticed Iraq is meeting with Vietnam, Indonesia and all countries with all the currencies we hold. Interesting.
Member: Still hoping the Venezuelan Bolivar is on that list to go.
Member: , Rumor has it that we are encouraged to register on the QFS website. Is this true or just another ploy to mislead the people?
MZ: It’s a rumor …Don’t fall for it. This is to mislead everyone…..If they want to prove it- I would be happy to be proven wrong.
Member: Many out there trying to prey on desperate people.
Member: When we go in for exchange, how will we receive funds? By card? What info will we have to give to receive funds? Fingerprints?
Member: I am sure we will get cards……hopefully highly secure cards ……I heard high limit cards.
Member: are we getting 800 # from Dinar Recaps or to our personal email from where we exchanged for Dinar?
Member: Probably both…..And from all dinar sites as well……we may get many notifications.
Wishing MarkZ, all the fantastic MODS and Family the best day ever!!!!!
