What Are The Positives Of The Central Bank Reducing Interest Rates? Al-Sudani’s Advisor Explains, 4 NOV

 What Are The Positives Of The Central Bank Reducing Interest Rates? Al-Sudani’s Advisor Explains

Money and business   Economy News – Baghdad  The Prime Minister's Advisor for Economic Affairs, Mazhar Muhammad Salih, said that the Central Bank's decision to reduce interest rates to 5.5% encourages lending.

Saleh said, "The Central Bank's reduction of interest rates to 5.5% represents an expansionary policy, because it is assumed that when this rate is reduced, all banks will do the same, whether on lending or on deposits."

He pointed out that "in terms of deposits, this decision does not encourage people to put their money in the bank, but it encourages lending," noting that "banks have a lot of surpluses, and they are encouraged to grant more credit."

"Most banks have not reached 75% of credits"

Regarding cash credits, the Prime Minister's advisor for economic affairs explained that they "should represent 75% of deposits," adding that "most banks have not reached this percentage, especially private banks, so banks can reach this percentage through this process, where they lend and move their interest, and it is an attempt."

Regarding the extent to which the interest rate in Iraqi banks is equal to that of banks in the region, Saleh said, “Banks are not obligated to adhere to this rate, and it is a reference to monetary policy.”

It is noteworthy that the Central Bank of Iraq decided on Thursday (October 24, 2024) to reduce the annual interest rate between it and the banks registered with it from 7.5% to 5.5%, and to reactivate the work of securities (Islamic certificate of deposit and money transfers) between it and the banks operating in Iraq, with an annual return of 4% for a period of 14 days, and an annual return of 5.5% for a period of 182 days.

Financial Liberation

The Prime Minister's Advisor for Economic Affairs noted that "banks have the right to lend and borrow at the interest rate they deem appropriate, in accordance with the decisions of their boards of directors. This is called financial liberalization, which has been adopted since 2004."

The Central Bank of Iraq had set the maximum investment ceiling not to exceed 50% of the total private sector deposits at the bank, and that the bank’s investment ceiling in a single auction should not exceed (500) billion Iraqi dinars.   https://economy-news.net/content.php?id=49383

MARKZ : BANK STORY BY MATT AT CBD GURUS, 4 NOV

 EXCERPTS FROM MARKZ CHAT 

Member: Mon Nov 11 my bank closed, Veterans Day

1995 Bank Story by Matt at CBD Gurus:

Matt: At the time I was a Limo Driver and would pick up people at hotels and the airport in Minneapolis. There were a lot of businesses and conventions in Minneapolis along with a lot of financial places there. Offices of the Federal Reserve is still there.

One day in front of the Hyatt I picked up a guy with no luggage or computer or anything (Which was unusual) …..It was a 20 minute drive to the airport and as we drove we got talking and I asked him “What do you do?  He said he meets with all the financial guys in Minneapolis.

He continued. “I work with a division of the government …we are going to be changing things around at financial institutions, and dealing with the power of money around the world….the structure. I met with Wells Fargo and a couple more at the Federal Reserve here. I was just in town doing a couple days of business. ( I do not know if he worked for the Treasury or another branch of the Government)

I asked him what he meant by changing the structure of money and this and that? He started talking about empires and changes like the British empire, the Dutch Empire, the Roman Empire ect…(I just listened and kept driving- I did not know anything about this stuff back then)

I asked him where is the financial power going to then – if you changing things?  “just call it “Asia” he said. “  Things will be all right- just different. I asked him where do we fit in the whole thing? He said “We aren’t running the show anymore after this” It’s somebody else’s turn. We have to get ready for it.

Now this was in 1995….I asked him “When is this all going to happen?” He said “We are planning it for 2024, but I think we can move it up to 2023” 

Later on I find out what he was talking about when he said the money and power was going to change. He was talking about the RV….That is what he was talking about. And the time is now. We don’t know the exact date and hour…but it’s going to happen.

LATEST UPDATE FROM DINARLAND @DINARREVALUATION

DINAR REVALUATION REPORT: Latest Developments in the Project to Delete Zeros from the Iraqi Dinar in 2024, 4 NOV

Latest Developments in the Project to Delete Zeros from the Iraqi Dinar in 2024

The project to delete zeros from the Iraqi Dinar (IQD) has been a topic of significant interest and debate in recent years. As of November 3, 2024, the Central Bank of Iraq (CBI) has been considering the redenomination of the currency, a process that involves removing a certain number of zeros from the nominal value of the dinar. This initiative aims to simplify financial transactions and enhance the stability of the currency.

Background and Rationale

The concept of redenomination, or removing zeros from the currency, is a common practice used by countries to address hyperinflation and the decline in the value of their local currency. In the case of Iraq, the idea is to make the currency more manageable and reduce the impracticality of handling large denominations in daily transactions. 1

Historical Context

The origins of the Iraqi Dinar scam can be traced back to the early 2000s, following the U.S.-led invasion of Iraq in 2003. After the overthrow of Saddam Hussein, the Iraqi economy was in turmoil, and the new government introduced a series of new banknotes to replace the old currency, which had become virtually worthless. The new Dinar, while more stable than its predecessor, was still valued at a fraction of a U.S. cent.  1

Current Status and Challenges

Economic Considerations

Economists and policymakers in Iraq have been divided over the feasibility and timing of the redenomination project. While some argue that removing zeros could enhance the currency's stability and improve the country's image before investors and the international community, others are concerned about the potential economic disruptions and the initial confusion it might cause among residents and consumers. 2

Technical and Logistical Challenges

The process of redenomination involves several technical and logistical challenges, including printing new currency, modifying accounting systems, and training individuals on how to use the new currency. These challenges require careful planning and implementation to ensure that the transition is smooth and does not lead to economic disruptions.  3

Public Perception

Public perception and trust in the currency are crucial factors in the success of the redenomination project. Previous attempts to delete zeros from the Iraqi Dinar have been met with skepticism and resistance due to the lack of preparation and the potential for economic instability. 3

International Examples

Several countries have successfully implemented redenomination in the past. For example, Turkey removed six zeros from its currency in 2005, Brazil did so on multiple occasions in the 1980s and 1990s, Zimbabwe removed twelve zeros in 2009, and Venezuela removed five zeros in 2018. These cases provide valuable lessons and insights for Iraq as it considers its own redenomination process. 4

Potential Benefits and Risks

Benefits

Simplified Transactions: Removing zeros can make financial transactions more manageable and reduce the impracticality of handling large denominations.Enhanced Stability: It can contribute to enhancing confidence in the national currency and improving the country’s image before investors and the international community. Accounting Efficiency:  It can facilitate accounting operations and financial transactions.

Risks

Initial Confusion: The transition period may cause confusion among residents and consumers. Economic Disruptions: Poor planning and implementation can lead to economic disruptions and potential instability. Public Skepticism: Past failures and skepticism can undermine public trust in the currency.

Conclusion

As of November 3, 2024, the project to delete zeros from the Iraqi Dinar remains a topic of ongoing discussion and debate. While the potential benefits of redenomination are significant, the challenges and risks must be carefully considered and addressed. The success of this project will depend on thorough planning, clear communication, and the implementation of effective measures to ensure a smooth transition.

BANK STORY FROM MARKZ, 4 NOV

BANK STORY

MZ: We have a really fun bank story from someone that works at a bank. This is a banking employee and I cannot tell you which bank. They asked (outside of the bank) about Nesara.  The other persons eyes got really big and their jaw dropped.

 They said “How do you know anything about this?” The bank employee told what they know about Nesara and the other said….”We have been signing a lot of NDA’s in our preparation for this , all of the employees are under a gag order and cannot speak about it ……

and we will be transitioning to a Wealth Management location .” They also made the comment that “the new money comes out in November. “  They have completed their training and have a new DelaRue machine.

WOLVERINE: " I’ve just spoken to a high up contact. It’s defiantly here"...

DINAR REVALUATION REPORT: Latest Updates on Iraq Economic Monetary Reform Completion 2024, 4 NOV

  Latest Updates on Iraq Economic Monetary Reform Completion 2024

Iraq has made significant strides in its economic and monetary reforms, with a focus on reducing oil dependence and enhancing fiscal sustainability. As of November 3, 2024, the country has achieved notable progress in several key areas, including banking reforms, non-oil revenue growth, and poverty reduction.

Banking Reforms and Financial Sector Modernization

Prime Minister Mohammed Shia Al-Sudani has emphasized the government's commitment to modernizing the financial sector and combatting money laundering. The Central Bank of Iraq (CBI) has completed 95% of banking transfers through an electronic platform, with the remaining 5% expected to be finalized by the end of 2024. 3 This transition to a fully electronic system is a crucial step in aligning Iraqi banks with global standards and fostering a more robust investment environment.

Non-Oil Revenue Growth and Economic Diversification

The Iraqi government has made significant progress in diversifying its revenue sources. According to Prime Minister Al-Sudani, non-oil revenues have increased by 6%, and the poverty rate has decreased by 17.6%. 4 These achievements are part of a broader strategy to reduce the country's reliance on oil and promote sustainable economic growth.

Fiscal Sustainability and Social Spending

Despite the challenges posed by oil price volatility, Iraq has taken steps to ensure fiscal sustainability. The International Monetary Fund (IMF) has recommended controlling the public wage bill and increasing non-oil tax revenues to protect critical social and investment spending. 6 The government has also initiated reforms in the pension and electricity sectors to enhance efficiency and reduce fiscal burdens.

International Support and Cooperation

The United States Treasury Department has reaffirmed its support for Iraq's economic reforms, praising the country's rapid progress. US Deputy Treasury Secretary Wally Adeyemo highlighted the 6% economic growth rate and expressed readiness for further cooperation to advance economic development. 3 This international support is crucial for Iraq's continued economic transformation.

Project Completion and Infrastructure Development

The Iraqi government has achieved 62% of its project targets across various sectors over the past two years, with a focus on infrastructure, wastewater treatment, and road and bridge projects. 4 These projects have not only improved living conditions but also contributed to economic growth and job creation.

In conclusion, Iraq's economic and monetary reforms have seen significant progress in 2024, with a focus on reducing oil dependence, increasing non-oil revenue, and modernizing the financial sector. While challenges remain, the country's commitment to these reforms, coupled with international support, positions it well for continued economic growth and stability.