FIREFLY:On our television we're now seeing Kurdistan news on our television.
We are seeing the Kurdish news is now talking about Iraq is planning on a currency redenomination.
They're saying Iraq is going to delete the three zeros and this will bring value to the currency of Iraq and it will facilitate financial transactions.
FRANK: ...Does it get any better than that?! ...Re-denomination means they will replace the 3-zero note with lower notes because the new exchange rate will only work with the new lower notes they're about to give you.
Senior US Treasury Official and Iraqi Prime Minister Meet at UNGA 2024
A significant diplomatic engagement took place at the United Nations General Assembly (UNGA) 2024, where a senior official from the U.S. Department of the Treasury met with the Iraqi Prime Minister. This high-level meeting underscores the commitment of both nations to foster economic cooperation and address financial security concerns.
Significance of the Meeting
The U.S. Department of the Treasury, established in 1789, holds a pivotal role in promoting economic prosperity and ensuring the financial security of the United States. Its responsibilities include advising the President on economic and financial issues, promoting sustainable economic growth, and enhancing governance in financial institutions. Given its extensive duties, including the production of coin and currency, disbursement of payments, revenue collection, and managing the federal government's borrowing, the Treasury Department's engagement with Iraq signals a strategic partnership.
Economic and Security Implications
The Department also collaborates with other federal agencies, foreign governments, and international financial institutions to encourage global economic growth, improve living standards, and mitigate economic and financial crises.
Its involvement in national security through economic sanctions, targeting financial support networks of security threats, and enhancing financial system safeguards highlights the depth of its influence.
Enhancing Diplomatic Ties
The meeting between the senior US Treasury official and the Iraqi Prime Minister represents a critical step in strengthening bilateral relations. It reflects the shared interest in fostering economic stability and security in the region, potentially leading to collaborative efforts in trade, investment, and financial regulation.
Outlook for US-Iraq Relations
The successful meeting at UNGA 2024 lays the groundwork for future diplomatic and economic collaborations between the United States and Iraq. It is expected to open channels for dialogue on mutual interests, including trade agreements, financial reforms, and counter-terrorism financing.
Future Engagements
As both nations continue to navigate the complexities of global finance and security, the U.S. Department of the Treasury's engagement with Iraq will likely play a crucial role in shaping the future of their bilateral relationship. The meeting at UNGA 2024 marks a significant milestone in their diplomatic history, with potential long-term benefits for economic stability and security cooperation.
One big US concern was Iran’s exploitation of Iraqi banks to evade sanctions, but that problem appears to have been resolved
A view of the meeting between Deputy Secretary of the U.S. Treasury Department Wally Adeyemo and Iraqi Prime Minister Mohammed Shi’a al-Sudani. (Photo: Iraqi Media
WASHINGTON DC, United States (Kurdistan 24) – Deputy Secretary of the U.S. Treasury Department Wally Adeyemo and Iraqi Prime Minister Mohammed Shi’a al-Sudani met on Monday on the sidelines of the opening of the UN General Assembly (UNGA.)
This marked Sudani’s second meeting that day with a senior U.S. official, as he also saw Secretary of State Antony Blinken.
One of the biggest concerns Washington had regarding Iraq’s financial sector was that it was being exploited by Tehran to evade sanctions.
That problem appears to have been resolved, and the U.S. read-out of their meeting was broadly positive, including Adeyemo’s praise for the significant growth in Iraq’s non-oil economy
Iranian Sanctions Evasions through Iraqi Banks
The problem of Iran’s use of Iraqi banks to evade sanctions was rooted in a mistake made by the George W. Bush administration, when, in March 2003, it launched Operation Iraqi Freedom (OIF) to overthrow Saddam Hussein’s regime.
There were good, solid reasons for that war, rooted in traditional, national security concerns. But when OIF was launched, the Bush administration believed that it had already won in Afghanistan and that OIF would be equally easy.
Neither was true, of course. As a senior Pentagon aide later told this reporter, “We should have argued that overthrowing Saddam was necessary—not that it would be easy.”
That overconfidence bred a lack of rigor in the entire operation. It included how the new Iraqi government would obtain hard currency. The Bush administration looked to that government to be a big success—a model of democracy for the entire region.
So it provided Iraqi banks easy access to U.S. dollars, through the Federal Reserve Bank of New York. However, that mechanism was subsequently exploited by Iran to evade sanctions. The Wall Street Journal published a major
report on this issue earlier this month.
The “New York Fed’s process to move Baghdad’s oil earnings lacked key money-laundering safeguards,” it said, “resulting in illicit transfers that financed terrorist groups for years.”
After Saddam’s overthrow, “Washington agreed to hold Iraq’s earnings from oil sales—tens of billions a year—at the New York Fed,” the Journal explained.
“To circulate the proceeds back into Iraq, the Fed began shipping dollars in cash to Baghdad and processing commercial wire transfers from Iraq’s private banks for international trade, hoping to revive its shattered economy after years of war and sanctions,” the Journal continued.
But the system “lacked a key check that is standard in international banking: it didn’t require the banks to divulge specifically who was getting the funds they were wiring out of Iraq.”
And that is how the U.S. ended up funding Tehran’s activities.
As early as 2012—over 10 years ago—the Obama administration was warned of the problem. But Barack Obama had opposed OIF. He thought it was an unnecessary war, driven by a hot-headed Republican president. To prevent a future such disaster, at least in Obama’s eyes, regarding Iran, as president, Obama fixed on establishing much better ties with Tehran.
That was behind his push for the Iranian nuclear deal. It also meant that he did not want to address the issue of Iran’s exploitation of Iraq’s banking system. Indeed, it was not really until the Biden administration that the U.S. took effective measures to deal with it.
The Federal Reserve has set up a pilot system in which dollar transfers to Iraqi banks go through a major U.S. bank, Citigroup, which does the standard due diligence that should have been done all along.
Thus, as the U.S. readout of the meeting between Adeyemo and Sudani states, they discussed “Iraqi banking sector reform, financial relations with the United States, and combatting illicit finance.”
Moving Away from Saddam Hussein’s State-Dominated Banking System
Under Saddam’s Baathist regime, many aspects of the economy were highly centralized, falling under the government’s control. That includes the banking sector.
Both the International Monetary Fund (IMF), as well as the U.S., have pushed for an end to that centralized system.
“The restructuring of banks is in line with the [Iraqi] government’s program for comprehensive banking reform,” Mudher Muhammad Saleh, Sudani’s Advisor for Financial Affairs, recently told Shafaq News.
“State-owned banks dominate 88% of banking sector investments, leaving only 12% for the private sector,” he said. “This imbalance has hindered competition and prevented the banking sector from reaching its full potential.”
Indeed, according to Mahmoud Dagher, a former official of Iraq’s Central Bank, two of the largest state-owned banks—the Rafidain and Rashid banks—remain under restrictions, dating back to Saddam’s 1990 invasion of Kuwait, which limit “their ability to conduct international financial transactions,” as Shafaq News reported.
But Sudani’s government has been working on addressing all these problems. Thus, “Deputy Secretary Adeyemo congratulated Prime Minister Sudani on Iraq’s significant progress on banking sector reform, which has broadened Iraq’s international financial connectivity and increased financial inclusion,” the U.S. readout said.
“Deputy Secretary Adeyemo emphasized Treasury’s support for the Central Bank of Iraq (CBI) and the Prime Minister’s reform agenda,” it continued, while he “also applauded Iraq’s 6.0 percent growth in the non-oil economy.”
Kuwait is not the same damn thing that's happening in Iraq. Iraq's money is inflated. Kuwait never had to inflate their dinars. They never had large bank notes like Iraq does. They never had to change them in for lower denominations. None of That shit is true.
Outside of the fact that they increased the value for the Kuwait dinar, nothing else matches...All Kuwait had to do was re-denominate their currency without deleting zeros. They just changed the way Kuwait dinar looked. That was it. Iraq's case is a little bit different...they added 3 zeros. They're talking about deletion of the zeros...
Pimpy
Don't be discouraged. Everything is on track. Iraq is doing what they need to do to get out of trouble. Leaving the 3 zeros on puts a smile on my face. Only if the exchange rate would change, that would be a great combination...
I want the same thing you do. Trust me, I would love nothing better to wake up in the morning and find out that the zeros are still on the dinar but they've magically changed the exchange rate to $3.22. That would be awesome.
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Pimpy
I want the same thing you do. Trust me, I would love nothing better to wake up in the morning and find out that the zeros are still on the dinar but they've magically changed the exchange rate to $3.22. That would be awesome.
Q & A WITH THE PROFESSOR
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.
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.
The Governor of the Central Bank announces the imminent adoption of the phone in completing banking operations in digital banks
9/25/2024 Baghdad - WAA - Wissam Al-Mulla
TheGovernor of the Central Bank, Ali Al-Alaq, announced today, Wednesday, the success of the digital transformation and electronic payment plan inIraq, while stressing that digital banks will allow citizens to managetheir operations through the phone.
Al-Alaq told the Iraqi News Agency (INA): "Through the data that was discussed in the electronic paymentconference, it clearly indicates the success of the digitaltransformation and electronic payment plan, and the percentage rose from 20 percent a few years ago to 48.5 percent, which is double thepercentage," indicating that "this percentage came during the last twoyears."
Headded that "there is a major transformation supported by a nationalstrategy and a serious and direct government direction by the PrimeMinister and giving the issue the momentum it deserves by providing thenecessary infrastructure," explaining that "Iraq now has advancedinfrastructure to accommodate electronic payment tools and financialservices of all kinds so that we can soon move to the transformation todigital banks in which the mobile phone will be the one leading thevarious operations.
This facilitatesservices for citizens, reduces the chances of fraud, reduces thechances of corruption, and provides important data at the national levelon the nature of transactions, their content, and oversight of them andthe compliance achieved through the large system."
Hecontinued: “Many requests have been submitted to the Central Bank toestablish digital banks, and this is evidence that the trend isreceiving the attention of investors. There are more than 60 requeststhat the Central Bank is currently examining carefully to be able tomeet the requirements and conditions that achieve success, because wemust ensure that the first step in digital banks is a successful step,” stressing “the conditions, controls and rules that digital banks operateunder, but they represent a major shift in banking services, andthrough them, citizens will be able to manage their operations throughmobile phones.”
Hepointed out that "a large percentage of Iraqis own mobile phones, andthis is an advantage that we must invest in to carry out this task."LINK
