MILITIAMAN
What is expected from Iraq is a real effective exchange rate. I think that is what's coming.
I think everybody has that expectation and they're openly telling them that expectation is real. They're doing it through media. That's happening.
TV outlets have been describing the on goings in Iraq and also the neighboring countries and the trading partners. To me the expectations are amazing.
BRICS+ Nations Determined to Trade in their Own Currencies
Geopolitical Analyst: 11-29-2024
The global economic landscape is undergoing a significant transformation as the BRICS+ nations — Brazil, China, Egypt, Ethiopia, India, Iran, the Russian Federation, South Africa, and the United Arab Emirates — intensify their efforts to trade using local currencies.
This development, emphasized during their 16th summit in October 2024, highlights a collective determination to reduce reliance on the US dollar and euro, two currencies that have long dominated international trade.
An economic and political imperative drives these countries to promote trading in their currencies. The reliance on major currencies often leads to increased transaction costs and vulnerabilities tied to the fluctuations and availability of these currencies.
For many nations, particularly those in the Global South, trading in currencies like the US dollar is fraught with challenges. Countries such as Ethiopia, whose currency (the birr) is not widely accepted internationally, face significant barriers when trying to engage in trade or to repay debts typically denominated in foreign currencies.
One principal advantage of using local currencies is lowering transaction costs. By trading in their own currencies, BRICS+ countries can streamline the process, making it easier and more efficient to conduct cross-border transactions. This financial autonomy not only enhances trade fluidity but also allows these nations to avoid the pitfalls of relying on currencies that are often tied to political agendas and economic sanctions.
Historically, certain currencies have garnered trust and value because they are backed by nations with robust economies and stable political systems. The US dollar, the euro, the British pound, and the Japanese yen have served as the currencies of choice for international trade, providing a sense of safety for traders and investors alike.
However, the need to transact in these dominant currencies can create economic bottlenecks for developing countries. For instance, if a country cannot earn enough of these major currencies through exports, it struggles to fulfill its import needs or pay off debts, which can hinder economic growth and overall development.
In the unique case of Russia, the country faces extensive sanctions due to its aggressive foreign policies, particularly its conflict with Ukraine. Here, diversifying currency options may offer a pathway to navigate these sanctions, allowing Russia to engage in international trade with alternatives to the dollar or euro.
The political motivations behind this shift are equally compelling. The imposition of sanctions, particularly through the SWIFT (Society for Worldwide Interbank Financial Telecommunication) system, has increasingly been used as a tool to exert pressure on nations. Established in 1973, SWIFT has become the backbone of international payments, facilitating secure communication between financial institutions globally. It has been used to impose financial sanctions on various countries, including Iran, Russia, and North Korea, effectively restricting their access to international financial markets.
By moving towards local currency trading, BRICS+ nations can potentially insulate themselves from future sanctions that utilize the current financial infrastructure which they cannot control. In doing so, they seek to reclaim their financial sovereignty and create a more balanced global trading environment.
While the move towards trading in local currencies is promising, it is fraught with challenges. The success of such a shift will depend on the willingness of these countries to establish robust financial systems capable of facilitating international trade without relying on the major currencies. Moreover, trust in local currencies must be cultivated among member nations and their trading partners for these currencies to gain acceptance on the global stage.
In conclusion, as BRICS+ nations embark on this journey towards de-dollarization, they navigate a complex landscape dominated by longstanding economic practices and geopolitical intricacies.
While the ambition to trade in local currencies holds the potential to reshape international trade dynamics and enhance economic resilience, its realization will require concerted efforts, cooperation, and trust among member states. The outcome of this initiative could largely determine the future of international trade and finance as a whole.
Sandy Ingram
Here's why Vietnam's currency keeps floating downward compared to the US dollar. According to Reuters the Vietnamese Dong has experienced depreciation against the US dollar due to a combination of global and domestic factors.
1. The strengthening of the U.S. dollar.
2. Interest rate differentials. Vietnam's Central Bank has maintained lower interest rates to stimulate economic growth.
3. Trade and investment flows. Fluctuations in Vietnam's trade balance and foreign direct investment can influence currency values.
4. Inflationary pressures. Higher domestic inflation rates can trade the purchasing power of the VND leading to depreciation.
5. Speculative activities. Market speculation and currency hoarding can amplify exchange rate volatility. These five factors are the same factors representing the exchange rate between the USD and IQD.
Iraq is preparing for an electronic revolution in electronic payment as 2025 approaches
Mawazine News – Baghdad
The head of the electronic payment team in Iraq, Nabil Al-Najjar, confirmed on Friday that Iraq will witness a major transformation in the field of electronic payment next year.
Al-Najjar explained in a statement to the official agency, followed by “Mawazin News”, that “the number of electronic payment cards in Iraq exceeded the barrier of 18 million cards, which means that a third of the population uses this method.” He added that “there is a government trend that supports electronic payment through a series of decisions that will contribute to this major transformation in the Iraqi economy.”
Al-Najjar pointed out that “Iraq is about to make huge digital campaigns in line with the economic decisions adopted by the government of Prime Minister Mohammed Shia Al-Sudani, and 2025 is expected to witness a qualitative leap in electronic transactions.”
CHELLA CC HIGHLIGHTS NOTES
Iraq’s economic outlook is strong, with advancements in digital finance, foreign investments, and banking reforms, as highlighted by key officials.
Jeff Nope, they haven't stopped [the "auctions"]. They're resuming. They sell U.S. dollars daily abroad...because...