In Jordanian Dinar and Saudi Riyal..Iraq expands foreign transfers with new currencies.
Read the highlighted part at the end it is in pastance hence the electronic transfer is almost done.
If they start transfers in other currencies they should be IMF article 8 compliant.
This is the most important news item today.
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Iraq expands foreign transfer channels, adding new currencies
Shafaq News/ On Thursday, the Central Bank of Iraq (CBI) announced the expansion of external transfer channels for local banks, adding the Jordanian dinar and Saudi riyal alongside the US dollar.
The CBI announced that Iraqi banks can now finance trade with Turkiye in euros, previously limited to EU countries, along with transfers in US dollars, UAE dirhams, Chinese yuan, and Indian rupees. “This step is part of the bank's efforts to expand foreign trade financing options with various currencies and channels, and it has already started taking the necessary actions to meet banks' demands for these currencies” it explained.
Moreover, the bank noted that the expansion of external transfer channels will offer transactions at the official exchange rate, streamline transfers, involve more banks in foreign exchange, and strengthen Iraq’s economic ties with other countries.
“This aligns with the bank’s efforts to meet the growing demand for foreign currencies based on Iraq's trade relations.
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"In 2024, the CBI smoothly transitioned from the electronic platform to directly accredited correspondent banks, achieving a significant shift in line with international banking practices, which has been widely praised,” it confirmed.
The Central Bank Expands External Transfer In New Currencies
Thursday 19, December 2024 11:24 | Economical Number of readings: 81 Baghdad / NINA / The Central Bank of Iraq announced the expansion of external transfer channels for local banks, to include new currencies: the
Jordanian dinar and the Saudi riyal, and to allow Iraqi banks to finance trade with Turkey in the euro, after it was limited to use with European Union countries, in addition to transfers available in currencies.
US dollar, UAE dirham, Chinese yuan and Indian rupee.
; The bank explained in a statement: “This step comes as part of its efforts to expand options for financing foreign trade in various currencies and channels,” indicating that it has begun taking the necessary measures to meet banks’ requests in these currencies. He pointed out:
“This expansion of external transfer channels provides transfer operations at the official rate, and aims to streamline the transfer and involve a larger number of banks in external transfer operations, and expand the horizons of economic cooperation between Iraq and other countries,
especially in light of the bank’s endeavor to find other channels to meet the volume of The demand for various foreign currencies according to Iraq’s dealings with those countries.” / End 3
These are the 3 zeroes on the exchange rate they will be deleting.
Which will make 0.00076/0.76.
Not the currency.
Which means if you have 100k once it goes international you would gain only 0.76/76,000 USD/ROI.
So imagine the other examples of 1:1 or higher?
With that said. You have to keep in mind the inflation aspect. In order for Iraq to have a competitive currency they would have to come out with a much higher exchange rate than 1:1 or 1:7 .
If the exchange rate reaches 1:16 (1 IQD = 16 USD), this implies the IQD has not only regained its historical purchasing power but exceeds it.
For context: 100,000 IQD = $1.6 million USD at 1:16.
Such a rate is unlikely unless Iraq’s economy experiences a massive oil boom, global investment inflow, and complete stabilization.
Now what has Iraq just done with oil?
How many companies are now pouring into Iraq?
Once the RLUSD reaches 1:1 wouldn't that be stabilization? Think about that.
Now imagine those who have 1-3 million IQD.
Iraq Stock Exchange: Global Aspirations Amidst Internal Challenges
Financial markets are one of the modern economic pillars through which savings are directed towards investment, in addition to expressing the strength and stability of the economic stability in any country. Therefore, activating and developing the stock market is considered one of the basic matters that will help achieve development in Iraq, as it will provide investors with greater opportunities to invest in stocks and achieve profits.
However, the Iraqi Stock Exchange, when compared to the markets of neighboring countries, is considered small in terms of trading value, as foreign investors’ confidence in the Iraqi market is still low due to unstable political and economic factors, as well as administrative and legal procedures that hinder the opening of accounts for foreign investors and the transfer of profits.
The market was established in 1992 under the name of the Baghdad Stock Exchange pursuant to Law No. 24 of 1991. After 2003, its name was changed to the Iraq Stock Exchange. It was governmental and at that time was able to list 113 Iraqi private and mixed joint-stock companies.
Weakness of industry and agriculture
The financial advisor to the Prime Minister, Mazhar Muhammad Salih, said in an interview with Shafaq News Agency, "Iraq inherited a one-sided economy that lives on oil revenues due to half a century of wars, conflicts, siege and economic isolation."
He added, "Unfortunately, the two most important sectors that form the backbone of the stock market's diversity are industrial manufacturing companies, agricultural companies, and the logistics companies associated with them, and these two sectors are very weak."
He continues, "The agricultural and industrial sectors only constitute 6 to 7% of the gross domestic product, and most of their activity is individual and non-contributing. It is natural for the market to follow the trend of the overall economy and its nature in terms of the degree of diversity.
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Saleh points out that “the banks’ share in the stock market dominates more than 50% of the market’s activity, and there are commercial activities associated with it. This is due to the liberalization of the national economy with high liberalism that transformed the single-rent economy into a consumer market economy linked to external supply chains due to the high financing leverage provided by oil revenues and the operating expenses associated with them.”
He stressed that "the new economic policy of the state is based on a productive partnership between the state and the private sector to raise the levels of economic diversity. Therefore, the strength of the stock market is undoubtedly linked to the strength of economic diversity in our country."
Limited market hours
The broker in the Iraqi Stock Exchange, Mohammed Madloul, said in an interview with Shafak News Agency, "The Iraqi market is still backward compared to the countries of the region. For example, Egypt and the Emirates have a price tape for stocks that remains open for 24 hours in public squares and streets, and any citizen can buy company shares from outside the market. However, the situation in Iraq is limited to specific hours, and the market ends between the seller and the buyer during these hours."
He added, "The value of shares of some listed companies is being traded at prices lower than the dinar so far, which represents an image of the small size of investment that the market is suffering from," adding that "the market value of banking sector companies increased from 6.88 trillion Iraqi dinars in 2021 to reach 10 trillion dinars in 2024."
Small market
Economic expert Dhurgham Muhammad Ali said in an interview with Shafaq News Agency, "The Iraqi market is still small due to the lack of large companies and a strong private sector in Iraq, and thus the market's performance reflects the weakness of the various Iraqi development sectors and the public's weak confidence in it."
He explained that “trading in the market is still technically less than its Gulf counterparts, and we lack sound management of investment portfolios, and the value and volume of the stock exchange’s performance is directly proportional to the efficiency of the companies whose shares are listed on it, in addition to the weakness of brokerage firms and the restrictions imposed by the market on their work and the weak influence of the Securities and Exchange Commission, the supervisor and legislator of the local stock exchange.”
Smart devices for the market
For his part, the Executive Director of the Iraq Stock Exchange, Taha Ahmed Abdul Salam, pointed out in an interview with Shafak News Agency, that "economic and political stability play an important role and the future vision of joint-stock companies."
He explained that "the number of joint-stock companies in the market has increased from 105 to 107 companies, and we are working on listing new companies, which all play a role in attracting new investors."
He added, "The Iraqi market signed a contract with the Egyptian Stock Exchange to use OMS, which allows users to trade via smart devices, and we expect it to be launched in June or July of next year."
The Iraqi Stock Exchange is expected to witness a significant increase in the coming months and years, especially with the improvement in the revenues of the listed companies and the development of their businesses, which makes it a market capable of attracting domestic and foreign investments link
The CBI will set a official rate for the dollar inside Iraq. That will end the Parallel market. This is the cash side of the currency auction.
This news is the transfer side (imports) of the auction. They are still posting it here, but it has been going thru bank for the beta-testing phase and is done. Or the CBI would not have made that announcement.
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IRAQ Central Bank of Iraq
The Central Bank of Iraq announced the expansion of foreign transfer channels for local banks to include new currencies: the Jordanian dinar and the Saudi riyal, and allowing Iraqi banks to finance trade with Turkey in euros after it was
previously limited to using them with European Union countries, It is worth noting that a smooth transition took place during 2024 from the electronic platform to directly accredited correspondent banks,
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