Delete The Zeros And Revalue The Iraqi Dinar , 23 OCT

 Delete The Zeros And Revalue The Iraqi Dinar  

Economical 10/23/2024 Ali Daadoush  Scientific concepts and nomenclature in economics vary according to the specialization and branches derived from it.
 
When talking about precise specialization, it is necessary to name economic variables by their scientific names, and one of these names is the term renaming the currency (Redenomination) or as it is called 
(deleting zeros from the currency), and countries usually resort to it to deal with runaway inflation and the decline in the value of the local currency, as it is replaced by Exchange the old currency into a new currency at a fixed price by deleting at least 3 zeros from the old currency.

Currency revaluation, when it comes to hyperinflation, becomes necessary; Because it requires a very large number of old banknotes to facilitate trade exchange, especially in local markets, and small banknotes become useless, as
 
the individual needs millions of banknotes in exchange for purchasing simple or necessary household or food needs, and
 
an example of this is what happened in the year. 2006 when Zimbabwe renamed its currency at the rate of old (1000 Zimbabwean dollars) to a new Zimbabwean dollar. In addition,
 
 (deleting zeros from the currency) may also occur when a country joins a monetary union, as happened in the  eurozone, and begins using a currency such as the euro instead of its local currency.
 
When the euro was introduced in 1999, member states used the new currency for the first time.
 
Once in electronic payments and accounting, it then switched from its local banknotes and coins to the euro in 2002.
 
There are several reasons behind renaming the currency (deleting the zeros), and they can be summarized as (
 
     controlling inflation,
     trade and economic facilitation,
     political factors such as changing governance, for example, as well as technical considerations such as
     modernizing financial systems, which are usually part of a larger project to modernize financial systems in the country.

The state, such as converting to new digital systems for dealing with currency). From what has been reported, we find that
 
 (deleting zeros) is not carried out randomly, but rather
 
is implemented after a comprehensive study of the economy and the challenges it faces,
 
and must be accompanied by other economic and financial measures to protect the economy from financial fluctuations, and
 
therefore, renaming the currency is a complex decision that requires study. Comprehensive of the country's economy and politics, and must be implemented while minimizing potential negative impacts on the economy and citizens.    https://alsabaah.iq/104624-.html   

IRAQ: SUMMARY OF ACCOMPLISHMENTS FOR OCTOBER 2024 PERIOD: BY MNT GOAT, 23 OCT

 IRAQ: SUMMARY OF ACCOMPLISHMENTS FOR OCTOBER 2024 PERIOD:

• Announced that removing zeros from the local currency is a process that has taken place in more than 60 countries over the past years,” said Mazhar Mohammed Saleh, the Prime Minister’s financial advisor. “This step comes after economic inflation occurs in countries, and therefore they resort to deleting zeros in order to keep up with prices in the markets,” he explained. 

• The Trade Bank of Iraq announced the opening of the cash deposit center in the Karkh side. He explained that “this center receives all cash deposits onlyfor all customers,” indicating that “this is a new service that the bank will launch with the aim to contribute to reducing the pressure of cash deposits on its other branches in Baghdad.

• The Central Bank of Iraq decided to close the Babylon Bank. Refer the bank to forced liquidation based on the provisions of Article No. 69 of Banking Law No. 94 of 2004. The reorganization of the banks. Some were merged or liquidated, as my CBI contact told us was coming.

• At the start of 2024, the Cabinet approved a contract with UK-based professional services firm Ernst & Young (EY) to study the merger of Industrial Bank, Real Estate Bank, and Agricultural Bank [Agricultural Cooperative Bank into a single entity.

• The Governor of the Central Bank, Ali Al-Alaq, announced today, Wednesday, the success of the digital transformation and electronic payment plan in Iraq, while stressing that digital banks will allow citizens to manage their operations through the phone.

• The Prime Minister stressed that the government  has made great strides in the financial and banking reform file, and 95% of bank transfers have been completed through the electronic platform, and less than 5% remains to be completed by the end of this year,

• Iraqi Prime Minister Mohammed Shia al-Sudani announced that Iraq will switch to a correspondent banking system to conduct 100% of foreign transfersearly next year. Currency auctions end the end of 2024.

• MP Sharif Suleiman praised, on Tuesday, the visit of Prime Minister Mohammed Shia al-Sudani to New York to participate in the 79th session of the United Nations, stressing that Iraq is qualified to control “important” files and is on the verge of “major” economic changes and an urban revolution in line with global developments. 

• Al-Sudani on the sidelines of the United Nations General Assembly to discuss reforming the Iraqi banking sector, financial relations with the United States, and combating illicit financing.” According to the statement, “presented to al-Sudani the significant progress made by Iraq in reforming the banking sector, which has led to expanding Iraq’s international financial outreach and increasing financial inclusion.”
• 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.

• PM Al-Sudani participated in a dialogue session held in New York by the American Chamber of Commerce and Al-Monitor, in the presence of an elite group of investors, businessmen, representatives of American companies, and the Iraqi-American Business Council. His Excellency pointed to the new reality of Iraq, which is witnessing an economic and developmental renaissance in all its sectors, and has also taken great strides in the field of energy investment and associated gas.

• The revealing the drafting of an integrated draft law to regulate electronic payment operations.

• Advisor to the Prime Minister and Chairman of the Supreme Committee to Support the Iraqi Dinar, Qasim Al-Dhalimi, announced the committee’s success in restoring the citizen’s confidence in the dinar, while indicating that it provided mechanisms to preserve the solidity of the dinar and the financial bloc.

• The Securities Commission announced the launching of its new website to promote investment in Iraq. While it indicated that an agreement had been concluded with Egypt to update the electronic trading system, it confirmed the development of a strategy to transform Iraq into a regional investment center.

• As part of its financial reform efforts, Iraq’s Cabinet has approved the allocation of 4 billion dinars [$3 million] to the Iraqi Securities Commission for the modernization and maintenance of electronic systems used for stock and bond trading.

• The Patriotic Union of Kurdistan confirmed that it is working to support and assist the disputed areas and is  working to activate Article 140 of the permanent Iraqi constitution and implement all its paragraphs

• Iraq increased its gold holdings to 152.6 tons, after its gold holdings were 148.3 tons, which represents 11% of its remaining reserves.

• The Undersecretary of the Ministry of Oil for Refining Affairs, Hamid Younis, announced the start of aviation fuel export operations from Iraqi ports.  He pointed out that the export process is a step in the right direction, to enhance Iraq’s role globally among the countries producing and exporting oil and its derivatives.

• The Central Bank of Iraq told Kurdistan that the agreement concluded between the Kurdistan Regional Government and the federal government obliges all employees to open bank accounts. That employees who do not open a bank account and do not register in the “Hesabi” project until March 2025, will not be able to receive their salaries.

• The Supreme Committee for Digital Transformation, headed by Prime Minister Mohammed Shia Al-Sudani, approved the strategic plan for digital transformation.

• Rafidain Bank announced that the number of effective and completed branches of the comprehensive banking system has reached 44 branches, distributed in Baghdad, Anbar, and Najaf, in addition to the border crossings of Zurbatiyah, Safwan, Arar, and Trebil.

• The results during 2023 and 2024 recorded a qualitative leap in the volume of transactions in electronic payment operations and the use of modern banking technologies. The rate of digital transformation and electronic payment increased to 48.5% compared to 20% in the past years.

• The Securities Commission announced today, Thursday, the signing of an agreement with the International Finance Corporation to develop the Iraqi market, and while it indicated the preparation of a guidebook to raise the transparency of companies, the new website of the Iraqi Stock Exchange will cover spot stock prices and is a qualitative leap.

• T he Iraqi Securities Commission revealed a project with the Qatar Stock Exchange that will allow for the joint establishment of companies, leading to “dual listing” that will allow the listing of Iraqi shares in both the Iraqi and Qatari markets.

• Indicated that the meeting coincides with the launch of financial transfers to Turkey, according to a new mechanism carried out in the euro currencyand implemented within Turkey through its banks.

• The Ministry of Finance said in a statement received by the Iraqi News Agency (INA): “The World Bank issued the Business Ready 2024 (B-READY) report, which showed that Iraq is witnessing a major transformation in improving the business environment and public services, which has made it competitive globally.

• The digital transformation process in the Iraqi banking sector, which is proceeding at an accelerating pace, coincides with the emergence of so-called digital banks, which are a new experience for the entire world. The CBI received about (60) to (70) requests to work with digital banks

• Iraq has become an economic power that should not be underestimated, and has all the qualifications and capabilities to join the World Trade Organization (WTO) after completing all preparations for that.

• Council of Ministers approves the National Strategy for Bank Lending in Iraq on 8/18/2024, which was launched by the Central Bank on 5/25/2024,  CBI makes a clear announcement of the beginning of the actual phase of implementing its third strategies for banking reform, which includes the national strategy for lending, environmental and social standards, and corporate governance for banks.

• CBI draws a clear roadmap  in agreement with the global Oliver Wyman Company to start developing the banking sector.

• The Federal Court interprets the phrase Iraq is fully sovereign in the Constitution Today, Tuesday (October 8, 2024), the Federal Supreme Court issued a decision that included the interpretation of the phrase (fully sovereign) contained in Article (1) of the Constitution of the Republic of Iraq for the year 2005.

• The US Energy Information Administration announced that Iraq exported more than 54 million barrels of crude oil and its derivatives to the United States during seven months of the current year.

• The Parliamentary Finance Committee is expected to discuss the 2025 budget next November, amid a general trend to pass it easily and not amend it significantly.

• Finance Minister Taif Sami Mohammed stressed, on Thursday, the need to adhere to timetables to achieve economic reforms, as outlined in the strategies.

• The Parliamentary Finance Committee expected, on Sunday, that non-oil revenues in the 2025 budget would reach 30 trillion dinars, represented by electricity collection, taxes, and revenues from the Baghdad Municipality and all municipal departments

• The International Labor Organization confirmed on Wednesday that the current government has developed programs and policies that help facilitate the transition to the formal economy.

• The Prime Minister stressed that “the government has regained citizens’ confidence, which is an important achievement that must continue, especially in the service sector,” noting that “infrastructure projects are a priority for the government, and it is imperative to complete them, especially the stalled ones.”

https://mntgoatnewsusa.com/latest-mnt-goat-newsletter/

Coffee with MarkZ and Andy Schectman. 10/23/2024

With the participation of 3 Arab countries.. BRICS summit discusses getting rid of America’s economic dominance, 23 oct

 Economy News – Follow-up

The activities of the BRICS summit begin today in Kazan, the capital of the Republic of Tatarstan in Russia, amid aspirations to strengthen economic cooperation among the countries of the group to protect them from the challenges it faces amid an openness to increasing the number of bloc countries after increasing to 10 during the current year after only 5. The five new ones are Saudi Arabia, Egypt, the UAE, Iran and Ethiopia.

The summit will focus on food and energy security issues, with special attention to the Middle East, and the main title of the meeting will be: “BRICS” and the Global South to jointly build a better world.

The meetings are participating in 36 countries, including 22 at the highest level and the leaders of 6 international organizations, discussing issues of interaction between the countries of the global majority, in solving urgent crises, including improving the structure of international relations, ensuring the sustainable development of food security and energy, in addition to the worsening situation in the Middle East.

Get rid of the dollar

The events, which are scheduled to last until October 24, are at the top of the idea of getting rid of the dollar in inter-doctions between the bloc countries at the top of the agenda of events, especially with the increasing US sanctions on Russia since the start of the war in Ukraine, one of which was the control of the United States over payment and transfer systems globally, especially as it is the source of the dollar currency used in global trade and most of the cash reserves of countries as well.This comes at a time when applications for new countries to join BRICS membership are increasing, which is one of the points to be considered during the summit.

It is noteworthy that although central banks have worked to diversify their holdings, including gold, about 58% of foreign exchange reserves are in dollars, and the effects of the dollar network put US banks at the center of global payments systems.

All banks deal in dollars through a correspondent bank in America, enabling the issuing country of the green currency to monitor flows for signs of terrorist financing and evade sanctions.

After the outbreak of the war in Ukraine, the West froze $282 billion of Russian assets held abroad, disconnecting Russian banks from the SWIFT system and preventing them from processing payments through US banks. Washington also threatened to impose “secondary sanctions” on banks in other countries supporting the Russian war effort, and even European policymakers who support sanctions were horified by the speed at which Visa and MasterCard closed their doors in Russia (two American companies that the eurozone relies on for retail payments).

The Russian agency Sputnik quoted the economics professor, Wafaa Ali, as saying that the BRICS summit comes at a time when the world is suffering from a state of erosion of confidence in light of wars and economic crises.

Not easy

The agency quoted international economist Dr. Karim Al-Mayor as saying that the transition to a new mechanism for payment between countries is not an easy measure, but it will be gradual and will require time, as countries move in this direction.

The mayor pointed out that “China and Russia have already begun the process of easing dependence on the US dollar, given the importance of the dollar in international transactions, which gives the United States additional power.”

The mayor described “the dollar as not just a means of trade, but a means of American dominance,” saying that mutual investments between the BRICS countries will enhance the group’s presence, noting the experience of payments far from the dollar between Brazil and Argentina in addition to the experience of dealing with local currencies between the UAE, India, Russia and China, especially in the energy sector.

The number of people subject to US sanctions increased by more than 900% (to about 9,400 people) in the two decades to 2021, according to the British newspaper Economist.

The British newspaper The Economist reported that the BRICS bridge payment system according to the Russian designation is scheduled to be built within a year, allowing countries to make a cross-border settlement using digital platforms operated by their central banks, according to The Economist.

The newspaper expected that discussions during the summit would focus on the race to reshape the fundsition paths. China has long bet that payments technology would reduce America’s strength to being at the center of global finance (by controlling money transfer systems), and the BRICS plan may provide cheaper and faster transactions, and these benefits may be enough to tempt emerging economies.

According to the Economist, the new BRICS plan, which focuses on cryptocurrencies managed by central banks, appears to be inspired at least in part by an experimental payments platform called “M Bridge” developed by the Bank for International Settlements along with central banks in China, Hong Kong, Thailand, the UAE and Saudi Arabia, as well as 31 other observer members.

In another economic context, Russian President Vladimir Putin, during his meeting with the head of the new development bank of the BRICS, Dilma Rousseff described the BRICS development group bank as the promising financial institution, noting that the bank has financed projects worth $33 billion since 2018.

https://economy-news.net/content.php?id=49054

ANALYSIS OF IRAQ NEWS: BANKING REFORM METHODOLOGY AT THE CENTRAL BANK (2016-2026) BY MNT GOAT, 23 OCT

BANKING REFORM METHODOLOGY AT THE CENTRAL BANK (2016-2026)

The steps of banking reform that the Central Bank has been taking since 2016 began when Mr. Ali Mohsen Al-Alaq was appointed Governor of the Central Bank of Iraq on 9/9/2014, which is a difficult and complex stage in Iraq’s security and economic history.

Iraq was facing security and economic shocks due to the occupation of 40% of the country’s territory by the terrorist ISIS and the global drop in oil prices in June 2014 by 75%. Al-Alaq was reassigned again on 1/23/2023 after the emergence of new crises and challenges at the economic, financial and banking levels, focusing on the lack of control over the unprecedented rise in the US dollar exchange rate and the rise in the annual inflation rate to (7.5%) in January 2023.

The Central Bank worked from 2016 to 2020 to address the effects of the economic and security shocks, the most prominent of which was the government’s inability to pay employees’ salaries on time. The Central Bank was able to use its foreign exchange reserves and the method of rediscounting treasury transfers from government support in the amount of 16 trillion dinars, and the crisis was overcome at the time.

In 2015, in light of these difficult economic conditions, the Central Bank began to move to develop its plans for the coming years and draw up a methodology for banking reform and structural, technical and administrative development of the Central Bank.

THE ISSUANCE OF ITS FIRST STRATEGY (2016-2020):

This resulted in the issuance of its first strategy for the years (2016-2020), which included 5 main objectives and 140 sub-objectives, 129 of which were achieved, at a rate of 92%, during the years of implementing the strategy. It contributed to establishing the basic structures and pillars for moving to a new stage of financial and banking reform, accompanied by the strategic banking projects plan for the years (2019-2023) and the issuance of the second strategy (2021-2023).

THE ISSUANCE OF THE SECOND STRATEGY (2021-2023):

The issuance of the second strategy (2021-2023) was to complete the achievement of the sub-objectives that could not be implemented in the first strategy, numbering (11) sub-objectives, during which the government continued to resort to the Central Bank and obtain (30) trillion dinars, and the total amount owed by the government became (46) trillion dinars.  

During the second term of the Governor, which began in 2023, the Central Bank worked on studying the achievements of the two previous strategies and diagnosing the foundations of the desired reform. The efforts to prepare the third strategy continued throughout 2023, and the foundations and foundations were built to set the goals for this new strategy for the years (2024-2026),

THE ISSUANCE OF THE FOURTH STRATEGY (2024-2026):

The next strategy, the fourth for the years (2024-2026), which derived its main and sub-goals from the state’s general  economic policies and its strategy for financial and banking reform adopted by the government in the government program and from Central Bank Law No. 56 of 2004. It included programs with clear goals and initiatives for a period of three years in a special, complex economic and financial circumstance fraught with risks and challenges at the level of internal and external economic and financial relations.

The third strategy identified the main goals with 7 goals, 24 sub-goals and 75 initiatives to achieve the main and sub-goals, and charted the path for banking and financial reform according to the following strategic goals:

• 1.Supporting and enhancing monetary stability.
   
• .2Enhancing digital transformation, activating electronic payment and supporting cyber security.
  
  
• 3.Enhancing financial inclusion .
  
  
• 4.Maintaining a sound financial system

.

• 5.Developing the organizational structure and developing human resources capabilities.
  
  
• 6.Enhancing the position of the Central Bank locally and internationally.
  
  
• 7.Enhancing compliance of the banking sector and the non-banking institutions sector in line with international standards.

 Programs, policies and initiatives have been identified to achieve the goals, and perhaps the most prominent program is the launch of the National Strategy for Bank Lending in Iraq (2024-2029) and the approval of the Council of Ministers to implement it, which will restructure banking financing in Iraq in addition to leaving the electronic platform and adopting correspondent banks in foreign transfers, protecting the financial system, enhancing financial inclusion, managing monetary and financial stability, developing oversight and supervision, developing regulation in the banking sector, completing the development of the infrastructure for digital transformation, licensing digital banks, implementing regulatory policies in the Central Bank in accordance with the frameworks and technologies adopted in global central banks, raising the capabilities of human resources, developing banking operations, strengthening the bank’s internal and external relations, and representing it locally and internationally.

What has been presented for the ten years of the financial and banking reform process confirms that the next two years will inevitably result in the transition to comprehensive and radical reform of the Iraqi banking sector and its transformation into a solid sector that contributes to sustainable development.

https://mntgoatnewsusa.com/latest-mnt-goat-newsletter/

FRANK26….10-22-24….BANK ON THE CENTERS ….& GOLD PROMO

Minister of Communications: We will start negotiating with international companies to operate the fifth generation of mobile phones, 23 oct

 Minister of Communications: We will start negotiating with international companies to operate the fifth generation of mobile phones

Minister of Communications Hiyam Al-Yasiri explained the contents of the Cabinet’s decision to negotiate with international companies on fifth-generation technology. While confirming that the ministry will proceed with this, she explained that it will include the national license that the ministry is working on, revealing positives related to internet speed, electronic payment services, and cybersecurity.

Al-Yasiri said in an official statement, followed by "Al-Eqtisad News", that "today the Council of Ministers took an important decision regarding the national mobile phone license, as the Council of Ministers had previously issued a decision to grant the license for the mobile phone opportunity with fifth-generation technology to the Ministry of Communications to establish a government company and launch a government license with modern technology

And today, after efforts that lasted several months, the Council of Ministers issued a decision to form a direct negotiation team with global operators and authorize the team to negotiate directly in person with a number of global operators with experience, competence and specialization in the field of the national license with fifth-generation technology, as well as those who have extensive experience and those who have the desire to work in Iraq and those who have experiences in Middle Eastern countries."

She added, "The decision authorized the Ministry of Communications to negotiate with these international companies to choose the best of them, as well as to provide financial support to prepare the preliminary procedures for launching the project, which will be completed, God willing, in the coming months. Iraq, thank God, and with the strenuous efforts of the National Services Government, succeeded in convincing international operators to work in Iraq, as it is an attractive environment for investment and supports foreign investors, and provides investors with all the possibilities for success, developing Iraqi infrastructure, and providing the best services to citizens.

We succeeded in convincing a number of international operators who are among the first class in terms of experience and specialization, and the global name. On the other hand, during that period, we were also in direct contact with the Communications and Media Commission to prepare the technical requirements necessary to launch the license, and the Commission is still carrying out some procedures in terms of calculating the license price, determining frequencies, etc., and in a continuous and strenuous effort in this field. On the other hand, we worked with the Retirement Fund and the Guarantee Fund to secure the necessary funding for the project, ensuring that a wide segment of the Iraqi people benefit from the revenues of this project."

She added, "This project is distinguished by the fact that for the first time in the history of Iraq, there will be a government mobile license with modern technology, which is the fifth generation technology, which differs from the current fourth generation technology and previous generations in terms of providing very high internet speeds, as well as other advanced services that support digital transformation, cybersecurity, artificial intelligence, and others. In addition, this license is distinguished from all licenses currently operating in Iraq in that its revenues return entirely to the state in reality, and it will be directed towards maximizing the state's financial resources in order not to keep oil as the only primary source of income for the Iraqi state. Today, most countries in the world have begun to move towards launching government licenses in order to maximize their revenues and increase the state's resources through the communications sector. Iraq was also one of the pioneering countries in this, and in reality, there is great support from the Prime Minister and daily follow-up." 

The Council of Ministers decided today, Tuesday, that in order to proceed with the procedures for implementing the national mobile phone license project, the Council decided to form a team headed by the Minister of Communications to negotiate with global operators from reputable international companies, with experience and competence in the field of building, operating and managing mobile phone networks with fifth generation technology (5G), who have expressed interest and desire to work in Iraq, and to choose the best in terms of the global brand and the breadth of work experience in the Middle Eastern countries, and other selection quality criteria.  link