DINAR REVALUATION

Tuesday, December 31, 2024

FIREFLY: CHECKMATE!! : IRAQ MUST ADD VALUE TO THE DINAR ONCE STOPS THE CURRENCY AUCTION #iqd

Iraq’s traders face uncertainty as 2025 approaches, 31 DEC

Iraq’s traders face uncertainty as 2025 approaches

The Central Bank of Iraq (CBI) has announced the termination of its electronic platform for monitoring and transferring US dollars abroad by the end of 2024. The decision, which aims to streamline financial transactions and align with global banking standards, has sparked a mix of optimism and concern among financial experts, traders, and policymakers.

CBI’s Decision: A Turning Point

Experts have described the decision as a “bold step” with significant economic and regulatory implications. For years, the platform facilitated dollar transfers, monitored financial compliance, and curbed money laundering. However, critics argue that its removal could create challenges, such as reliance on black-market transactions or inflationary pressures if adequate regulatory measures are not implemented.

Kazem Al-Shammari, a member of Iraq's Parliamentary Economic Committee, emphasized the need for oversight. “While the Central Bank traditionally maintains currency reserves and ensures a stable exchange rate, it has also taken on dollar sales due to economic and legal chaos,” Al-Shammari said, highlighting the importance of ensuring that licensed Iraqi banks deliver dollars to legitimate traders and industrialists, especially as some foreign banks have contributed to economic harm.

He revealed that “Parliament plans to invite the CBI Governor for discussions after its legislative recess. Enhanced oversight mechanisms will also be introduced to monitor the currency exchange process, ensuring proper usage and minimizing risks of misuse or sanctions.”

Simplifying Transfers: A New Framework

Uday Al-Alawi, head of the Iraqi Economic Alliance, outlined the previous transfer process, which involved multiple approvals from the CBI, the Federal Reserve, an auditing company, and the transferring bank. He explained that “this system was prone to delays, as a halt by any of these entities disrupted transactions.”

“The new system simplifies these steps by allowing banks to transfer funds directly to intermediary banks, bypassing the Federal Reserve and CBI, though the auditing company remains involved. This change makes the initiating bank accountable to both the CBI and global financial standards,” Al-Alawi continued, adding that only five Iraqi banks currently meet the criteria to operate under the new framework, potentially causing delays as the system scales.

Transparency and Compliance

International economic expert Nawar Al-Saadi described the termination of the platform as an effort to enhance transparency and reduce bureaucracy. “This measure aims to ensure that dollar transfers serve their intended purposes, such as legitimate imports and economic support,” he explained, warning that without clear mechanisms, “the move could lead to higher reliance on the black market and increase inflation, potentially destabilizing Iraq’s financial market.”

Al-Saadi added that “the absence of the platform’s strict oversight could also heighten risks of money laundering and illegal financial activities, which would undermine Iraq’s standing in the global financial system.”

Economic Repercussions

Economic researcher Diaa Al-Muhsin echoed concerns about potential fallout, saying, “Demand for dollars in parallel markets could surge, driving up exchange rates and reducing purchasing power,”

“Higher costs for imports might discourage traders, leading to reduced market supplies, inflation, and unemployment.” He stressed the importance of gradual implementation, increased dollar availability, and support for affected sectors to mitigate these risks.

CBI’s Transition Strategy

The Central Bank clarified that this transition is part of a long-term strategy initiated in 2023 to reorganize financial transfers. By 2024, 95% of transactions had shifted to direct mechanisms between Iraqi and foreign correspondent banks, with only 5% remaining on the electronic platform.

CBI highlighted that trade with major partners like the UAE, Turkiye, India, and China—accounting for 70% of Iraq’s imports—now leverages alternative currencies such as euros, yuan, and dirhams. It reassured that the transition is designed to minimize disruptions, with measures like pre-audit mechanisms and channels for personal transfers in place.

“The official dollar rate will reflect true economic activities, stabilizing prices and controlling inflation,” CBI stated, warning that “rates outside official channels represent practices by those circumventing legitimate pathways.”

EXCERPTS FROM MARKZ, 31 DEC

EXCERPTS FROM MARKZ

MZ: Today in Iraq- Monday December 30th…..the auction was $279 million 695 thousand 336 dollars. So there was an auction today.

Member: Maybe it was a private bank that had that auction???

Member: MilitiaMan says Sudani and Soliel say it will be on Jan 2….woohoo

MZ: that is pretty close to what we are being told right now. ….there is so much coming together

Member: My IMF contact is saying the 2nd

MZ: They are not the only ones looking at that date.

Member: I thought they had to go by the 31st or their contracts would be null and void?????

Member: If everything happens by Jan1- we may get notifications on the 2nd??? Fingers crossed.

Member: I believe the countdown is on….

MZ: ”With the beginning of the new year-US dollar enters new phase in Iraq” They are talking about the changing of the auction system and how things are going to work. In the next couple of days the system will go from 95% to 100% during that timespan. There is pure gold in the articles today on that change in the system that is coming to Iraq

MZ: “Financial liquidity delays the payment of salaries to Iraqi employees” In the next couple of days they will have full access.

MZ: “Iraq in the list of the most attractive countries for investments” in the last 2 years they have gone from the bottom of the list to the top of the list. We are watching the economic reforms that they told us about in their white paper reforms. And part of that is to make the dinar more valuable. To return the dinar to its former glory as the most valuable currency in the world…...

Member: sounds like a reinstatement to me!

MARKZ: RENO HAS NO STARTED!!! @DINARREVALUATION

The Central Bank of Iraq begins the week with foreign transfers that constitute 90% of its sales, 31 DEC

The Central Bank of Iraq begins the week with foreign transfers that constitute 90% of its sales

Shafaq News/ Foreign remittances in the Central Bank of Iraq’s dollar sales reached more than 90% on Sunday, with the participation of 15 banks in the daily currency auction.

Shafaq News Agency correspondent reported that the bank sold 296 million, 396 thousand, and 196 dollars in its auction today, covering it at a basic exchange rate of 1310 dinars per dollar for documentary credits and international settlements for electronic cards, and at a rate of 1310 dinars per dollar for foreign transfers, and at a rate of 1305 dinars per dollar in cash.

He added that most of the dollar sales went to boost balances abroad in the form of remittances and credits, which amounted to $268,496,196, or 90%, compared to cash sales of $27,900,000.

Our correspondent indicated that one bank bought cash dollars, while the number of banks that met requests to enhance balances abroad was 14 banks, and the total number of exchange companies participating in the auction was 43 companies.

TIDBIT FROM MILITIAMAN, 31 DEC

Militia Man

Article: "The Central Bank of Iraq pursuant to its law 56 of 2004 as amended is responsible for determining the categories of Iraqi banknotes paper and metal, their measurements and their shapes, printing paper notes and minting metal coins."

What's not normal about this...is they don't have any coins. They don't have any metals. Why are they talking about it now, today? That's powerful...

If that 'mechanism' is now changed as Saleh says, that mechanism means there's going to have to be significant change...That means the value of the exchange rate is going to change. You don't need coins at an exchange rate of 1310. It doesn't work that way. The value has to be there.