Pimpy
As you're aware Iraq has some issues with protesters charging the US Embassy. I'm glad it has not escalated.
Iraq has been doing a great job about staying out of all these little conflicts. We don't want them to get involved in these conflicts. They need to stay on a straight and narrow. They've been doing a great job of this. Let's hope that continues. This would be good for both the dinar as well as the stocks.
Shafaq News/ On Thursday, Iraq Future for Economic Studies and Consultations attributed the rise in the dollar's value against the dinar to a drop in foreign currency transfers and an inability to meet the demand for foreign currency to cover imports, warning that the dollar could continue to climb, potentially reaching 1,600 dinars in the coming period.
Key Reasons
The recent rise in the dollar exchange rate against the Iraqi dinar, which has reached around 1,550 dinars per US dollar, is driven by several factors, according to Manar Alobaidy, head of the economic institution.
Alobaidy told Shafaq News Agency that the increase is primarily due to a "decline in transfers of other currencies, specifically the Emirati dirham and Chinese yuan," resulting from significant restrictions imposed by correspondent banks that manage these currencies. He added that banks involved in the Citi-Pilot project are "cautious about opening accounts for new companies," restricting their transactions to those firms they have previously worked with.
The expert further explained that the "inability of transfer mechanisms to meet the demand for foreign currency" for importing high-value goods, particularly mobile phones and gold, is driving importers to the parallel market to satisfy their needs.
Remedies
Alobaidy pointed out that "the dinar's decline against the dollar is expected to continue, possibly reaching 1,600 dinars per dollar in the coming months unless the problems are addressed with practical solutions:
1. Expanding the network of correspondent banks worldwide, especially in the UAE and China.
2. Controlling fiscal policy by limiting the entry of certain types of goods to reduce demand relative to supply.
3. Pressuring banks participating in the Citi-Pilot project to be more open to accepting a wider range of customers.
4. Temporarily banning the import of certain goods to ease demand for foreign currencies until more organized and streamlined solutions for foreign transfers are found."
No Economic Justification
Economic and financial expert Abdul Rahman Al-Mashhadani attributed the recent rise in Iraq’s dollar exchange rate to political factors rather than economic ones.
Al-Mashhadani told Shafaq News, “The dollar had stabilized for a long period at around 149,000 to 150,000 dinars per $100, especially after streamlining the process of converting traveler dollars at the airport and resolving bottlenecks with currency exchange and payment companies operating there.”
“There are no economic reasons or justifications behind the rise because the Central Bank is still supplying large amounts for foreign trade, which is the key element covering traders’ needs,” he emphasized.
Al-Mashhadani noted that the increase is likely driven by regional unrest and fears that Iraq could become a target. “This has led traders to settle accounts between creditors and debtors, especially those with foreign obligations. The fear of instability may cause an increase in the exchange rate, impacting traders' ability to fulfill their obligations,” he said.
He added, “The second issue is the panic among the public during such crises, prompting people to convert their assets into dollars for fear that the situation could worsen, potentially forcing them to travel or even migrate, either within Iraq or abroad,” highlighting that “the dollar remains the safest option, as it is in high demand in the markets.”
The local market exchange rate has climbed to around 155,000 dinars per $100, following military actions in Lebanon, Iran, and Israel.
'MarkZ
[via PDK]
“Finance Committee: Discussion of 2025 budget tables will begin next month” That is November.
Why is that important?
The rate. They are still settling out 2024 and 2023…now suddenly they are going to be ready for 2025 and its tables?
I believe this tells us we will soon have a rate in order for them to fix those tables.
Shafaq News/ The Central Bank of Iraq has initiated euro-based financial transfers to Turkiye.
The announcement was made during a meeting between the Governor of the Central Bank of Iraq, Ali Al-Alaq, and the Turkish ambassador to Iraq Anil Bora Inan, along with representatives from Turkish banks operating in Iraq, according to a statement from the Central Bank.
According to a statement from CBI, the new mechanism, implemented for the first time, facilitates financial transfers to Turkiye in euros through Turkish banks. “This system aims to streamline trade coverage with greater speed and efficiency, offering a smoother process for business transactions between the two countries.”
The meeting also focused on ensuring the success of the new mechanism by addressing its requirements, particularly in managing the high volume of transfers from traders and the business sector.
“The Turkish bank representatives expressed their readiness to implement the system and meet the regulatory and oversight demands in coordination with international auditing firms.” They also emphasized their efforts to expand relationships with accredited correspondent banks.
Turkiye’s ambassador praised the Central Bank of Iraq for its efforts in managing the shift to external transfers and commended the bank's measures to organize and facilitate these processes. He highlighted the importance of continued direct coordination between the Central Bank and licensed banks to ensure the smooth operation of this new system, according to the statement.
Mnt Goat
Prime Minister Mohammed Shia al-Sudani expressed, on Thursday, Iraq’s readiness to enter into a partnership with American companies in the oil industry sector, revealing at the same time his government’s intention to establish a new Iraqi bank.
This came during his participation in New York...can the news get any better?
Finally the US is engaging Iraq and seriously taking on partnerships, especially in the energy sector. So we know if the US is invested in Iraq something is up….
Clare Article: " I raq announces population census results at over 45 million amid slight increase in males " Quote: "...