MZ: in Iraq: “Central Bank governor opening foreign channels to foreign currencies eliminates the black market” they are talking about partnering with neighboring countries and carry more of a “basket of currencies” so they do not need the US dollar for trade. Including Jordan, Saudi Arabia, and different countries around them .
MZ: They want to split the value of the Iraqi dinar based on gold, oil, reserves and a basket of partnering currencies. This should mean a much higher value for the Iraqi dinar. They are making “real world moves” to support the value of their currency.
MZ: On the bond side I have noticed a serious increase in the number of deals that flippers are making. And offers that flippers are making with immediate closures on those deals. They are telling bond people “What if those goes on longer- you should sell to us right now”
MZ: Why are historic bond flippers willing to spend a lot more money right away- then they were before? Do they sense how close we are? Do they know something on this front? This kinda surprised me
MZ: Flippers are suddenly willing to spend billions of dollars to pick up boxes of historic bonds ect….IMO they would not be spending this money unless they felt they would get it back quickly with a profit…They have to know it is coming.
Member: so like flipping a house. You buy it a bit cheaper ..then resell it at a profit . got it….that is very interesting
Member: I have heard $4.20 in country in Iraq right now
MZ: I have heard that rumor as well….dont have anything confirmed yet
Advisor to the Prime Minister, Mazhar Mohammed Salih, confirmed today, Wednesday, that tightening control over suspicious financial transfers reduces manipulation of exchange rates and the stability of the national currency, while indicating that limiting speculation reduces the use of foreign currencies in unproductive operations.
Salih said in a statement to the Iraqi News Agency (INA): "The Prime Minister's directives to the monetary and financial authorities stressed the intensification of inspection and control procedures for financial transfers and monitoring speculators, which remain of great importance in enhancing currency stability and reducing speculation that is harmful to the national economy, through mechanisms leading to combating illegal speculative activities, including specifically: tightening control over suspicious financial transfers that conflict with the rules of compliance and transparency in a manner that reduces illegal activities, such as money smuggling or manipulation of exchange rates, which maintains the stability of the value of the national currency."
He added that "taking strict measures against speculators and manipulators in the currency market strengthens confidence in the financial system and demonstrates the strength of government policy in protecting the national economy, and increases the confidence of citizens and investors in the country's financial system, in addition to directing resources towards the real economy to invest in the available opportunities in it, whether industrial, agricultural or service," noting that "by limiting speculation, the use of foreign currencies in unproductive operations is reduced, which helps to provide them to finance imports or beneficial investments."
He continued that "the protective measures against currency speculation come to limit the negative effects resulting from the impact of regional crises, through preventive measures that reduce the exploitation of economic and political crises in the region to achieve illegitimate gains, which enhances the stability of the local market."
Saleh explained that "the importance of limiting speculation and speculators' opportunities remains in enhancing the efficiency of the banking system through the role of monitoring financial transfers, which undoubtedly contributes to revealing the loopholes in the banking system and enhancing governance and transparency in it, as such measures are in line with the comprehensive reform plan for the financial and banking sector, and aim to enhance financial stability and prevent violations that negatively affect the national economy."
FIREFLY: ECONOMIST ON TV ARE EXPLAINING THE PROCESS OF THE RV AND THAT THE PLANS OF RV IS DONE!!, 25 NOV
Frank26
[Iraq boots-on-the-ground report]
FIREFLY:Economist on television is explaining about how a revaluation works. They're giving us examples of other countries and after that how the currency is linked or pegged to a basket of other currencies.
Wow...It's being told to us constantly now every day. The planning of the revaluation they say is done and now apparently this currency is going to be linked or pegged to a basket of other currencies.
FRANK: If they tell you it's going to be pegged to a basket of other currencies,...it means we have a new exchange rate because that's the only reason the other currencies in the basket will play along with it...They also want to fluctuate (bounce up and down) with the value of your currency that is about to go insane!
Governor of the Central Bank, Ali Al-Alaq, confirmed today, Thursday, that opening channels in foreign and Arab currencies achieves stability in the exchange rate and gradually eliminates the black market.
The media advisor of the Trade Bank of Iraq (TBI), Aqeel Al-Shuwaili, said in a statement received by the Iraqi News Agency (INA): "The governor of the Central Bank visited the Trade Bank of Iraq and appreciated the bank's efforts to expand its customer base of importing merchants and the procedures to facilitate their transactions in a way that contributes to achieving stability in the exchange market. "
The governor of the Central Bank stressed - according to the statement - the need to make efforts to achieve fluidity and provide the best banking services to the bank's customers.
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The governor pointed out that "the Central Bank's continued opening of multiple external channels in foreign and Arab currencies achieves continuous stability in the exchange rate and gradually eliminates the black market."
The governor pointed out that "the Central Bank's continued opening of multiple external channels in foreign and Arab currencies achieves continuous stability in the exchange rate and gradually eliminates the black market."
The statement We’ve referred to highlights the Central Bank of Iraq's efforts to stabilize its currency exchange system and reduce the influence of the black market by opening multiple external channels for foreign and Arab currencies.
By diversifying its access to foreign exchange sources, the Central Bank aims to ensure a steady supply of foreign currencies, thereby stabilizing the official exchange rate and discouraging the use of unofficial or black market channels.
This strategy is significant because Iraq has faced challenges with currency instability and the depreciation of the dinar in the past, with black market trading often exacerbating these issues.
By increasing the availability of foreign currencies through official channels, the Central Bank hopes to increase trust in the formal banking system, reduce speculative activities, and gradually phase out parallel market activities.
The move aligns with broader monetary policies that central banks often use to combat exchange rate volatility and inflation, promoting greater confidence in the national currency.
However, the success of this policy will depend on factors like consistent foreign exchange inflows, effective regulation, and broader economic stability within the country.
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The Central Bank of Iraq (CBI) is working to stabilize the exchange rate of the Iraqi dinar (IQD) through various measures, including efforts to diversify its foreign currency reserves. The exchange rate of the Iraqi dinar is influenced by several factors, such as oil revenue, geopolitical conditions, and inflation expectations. Since Iraq's economy is highly dependent on oil exports, the CBI's strategy for stabilizing the currency involves increasing its foreign exchange reserves and diversifying these reserves to reduce reliance on a single currency, particularly the U.S. dollar.
Key strategies the CBI uses for currency diversification and stabilization include:
1. Diversification of Foreign Currency Reserves
Currency Basket: By holding reserves in a range of foreign currencies, including the U.S. dollar, the euro, the British pound, and potentially other major currencies, the CBI reduces the risk associated with fluctuations in any single currency. If the value of the dollar drops, for example, the value of reserves denominated in euros or other currencies may increase, helping to buffer the impact on the dinar's exchange rate.
Stabilizing Effects: This diversification helps insulate the dinar from external shocks, such as a sudden depreciation of the U.S. dollar or global economic crises that might affect the dollar-based assets.
2. Building Up Foreign Exchange Reserves
Increasing Reserves: The CBI's effort to build up foreign exchange reserves, especially through foreign investments and oil revenue inflows, gives it a stronger buffer against short-term volatility in the exchange rate. Having more reserves enables the central bank to intervene more effectively in the foreign exchange market when needed to stabilize the dinar.
Oil Revenue and Foreign Reserves: Since Iraq's economy is largely oil-dependent, oil price fluctuations can impact the availability of foreign currency. The CBI works to manage these fluctuations by ensuring it has a reserve cushion in other currencies to maintain exchange rate stability.
3. Active Intervention in the Foreign Exchange Market
Market Operations: The CBI frequently intervenes in the foreign exchange market by buying and selling foreign currencies. These interventions help to smooth out short-term volatility in the exchange rate of the dinar and maintain confidence in its stability.
Currency Auctions: One common tool used by the CBI to manage the exchange rate is the currency auction, where the CBI sells foreign currencies (mainly U.S. dollars) to commercial banks. By adjusting the amount of foreign currency sold, the CBI can influence the dinar's exchange rate.
4. Monetary Policy and Interest Rates
Interest Rate Adjustments: The CBI can adjust interest rates to influence inflation, attract foreign capital, and stabilize the exchange rate. By raising interest rates, it can make the dinar more attractive to investors, increasing demand for the currency and strengthening its value.
Inflation Control: Managing inflation is crucial for exchange rate stability. By maintaining low and stable inflation rates, the CBI can prevent the dinar from losing value in real terms, which would otherwise lead to depreciation.
5. Supporting Non-Oil Exports and Foreign Investments
Diversification of the Economy: To reduce its reliance on oil, the CBI encourages diversification by supporting other sectors of the economy, such as agriculture, manufacturing, and services. By boosting exports from these sectors, Iraq can generate foreign currency inflows that will help stabilize the exchange rate.
Foreign Direct Investment (FDI): The central bank and government policies aim to attract foreign investment, which would bring in foreign currency and help strengthen the dinar. Ensuring a stable exchange rate makes Iraq more attractive to investors, who prefer a predictable currency environment.
6. Managing External Debt and Fiscal Policies
Debt Management: The CBI works with the Iraqi government to manage external debt and ensure that it does not become a burden on the foreign exchange reserves. By keeping debt levels manageable and ensuring that Iraq's fiscal policies are sustainable, the central bank can help maintain the dinar's value.
Balanced Fiscal Policy: Coordination between the CBI and the Iraqi government is key to maintaining a sound fiscal and monetary policy. Avoiding excessive deficits and ensuring efficient management of public finances contributes to overall macroeconomic stability and helps to prevent devaluation pressures on the dinar.
Conclusion
The diversification of foreign currency reserves by the Central Bank of Iraq is one element of a broader strategy aimed at stabilizing the exchange rate of the Iraqi dinar. By reducing dependence on a single foreign currency (such as the U.S. dollar), increasing reserves, and promoting sound monetary policies, the CBI helps cushion the Iraqi economy from external shocks and contributes to the long-term stability of the dinar. This, in turn, enhances confidence in the currency, reduces inflationary pressures, and creates a more predictable environment for businesses and investors. However, the success of these policies also depends on the broader political and economic stability of Iraq, as well as global factors such as oil prices and geopolitical events.
