WTO Accession talks are expected the first quarter of this year between Iraq and WTO. Why?
Iraq is transitioning into a "Market Economy" which means their resources will be allocated and price determinations will be based upon new demands for their currencies exchanged on the market.
A market rate will be formed from these WTO meetings to determine a fair price in trade.
Explanation:
Market Rate Definition:
The "market rate" refers to the price at which a currency is currently trading on the open market, determined by supply and demand.
International Rate:
When you talk about an "international rate" for a currency, it simply means the rate at which you can exchange your domestic currency for another foreign currency on the global market.
Key Point:
While banks or exchange services might offer slightly different rates to customers (adding a margin for profit), these rates are still based on the underlying market rate.
Yes, to have an international rate for a currency, you must also have a market rate, as the international rate is essentially the current market value of that currency in relation to other currencies on the global foreign exchange market (forex).
Prime Minister Mohammed Shia Al-Sudani, on Thursday, the progress of work on the project of restructuring Al-Rashid and Rafidain banks and its entry into force soon
The Sudanese media office said in a statement received by {Al-Furat News}, that “the latter is a special meeting to discuss the development of the work of government banks, in the presence of representatives of Ernst and Young Auditing and Financial Consulting Company.”
He reviewed the plan of the restructuring of Al-Rasheed and Rafidain Banks, and the technical and administrative procedures related to the project, which include a comprehensive review and structural administrative reforms in order to provide integrated banking services to citizens and companies.
The Prime Minister explained that “the percentage of completion of the project for the structuring of Rafidain Bank has reached its final stages, stressing its entry into force during the next few period, within the framework of a plan that has been studied and implemented according to the standards and parameters drawn down.”
Al-Sudani added that “government banks with their current structures are not able to open up and address problems, and therefore they have been restructured in a way that ensures the availability of all possibilities and openness with modern international technical specifications.”
. The prime minister’s visit aims to address various issues of mutual interest between Iraq and Iran, including the Syria crisis, the containment of militia groups, and the enhancement of security cooperation.
The significance of this diplomatic engagement in the context of Iraq’s historical role in the Arab League and its potential return to a strong economic position through regional partnerships and trade agreements.
This is not merely a recent development; rather, it has been part of a long-term strategy involving various international stakeholders, including the United States and the Arab Monetary Fund (AMF). The overarching theme is that Iraq is positioning itself to regain its former prominence in the region, potentially leading to a revaluation of the Iraqi dinar.
🌍 Diplomatic Engagement: Al Sudani’s visit underscores Iraq’s role as a mediator in Middle Eastern affairs.
🛡️ Regional Security: Discussions focus on combating terrorism and enhancing border security between Iraq and Iran.
🔗 Trade Cooperation: Emphasis on revitalizing trade agreements and collaborations, particularly concerning energy and infrastructure.
💧 Water Resource Management: Upcoming meetings with Turkey highlight the necessity of managing water resources for future industrial development.
📈 Economic Revaluation: Potential discussions about the revaluation of the Iraqi dinar as Iraq seeks to strengthen its economy.
🤝 International Alliances: Iraq’s strategic partnerships with both regional and international entities are explored.
📊
Long-term Strategy: The speaker emphasizes that these developments are part of a broader, ongoing strategy rather than isolated events.
Key Insights
🌐 Iraq’s Historical Role: Iraq has historically been a pivotal player in Arab politics, serving as a mediator in regional disputes. Al Sudani’s revival of this role could stabilize the region and enhance Iraq’s influence in future discussions surrounding Middle Eastern geopolitics.
🔍 Focus on Security: The discussions between Iraq and Iran center on the necessity of controlling militias and terrorist groups. This focus on security reflects a broader strategy aimed at stabilizing the region, which is essential for economic growth and attracting foreign investment.
🚧 Infrastructure Development: The collaboration on infrastructure, including railways and energy sectors, points to Iraq’s commitment to improving its economic situation. The successful implementation of these projects will require effective management of resources, including water and electricity.
💧 Water as a Strategic Resource: The importance of water management is highlighted, particularly in the context of upcoming meetings focusing on water resource allocation with Turkey. This emphasizes the interconnectedness of various regional issues, including energy, trade, and security.
📉
Expectation of Currency Revaluation: The speaker suggests that Iraq’s efforts to stabilize its economy and strengthen its currency could lead to a significant revaluation of the Iraqi dinar. This is rooted in Iraq’s historical economic relationships and current negotiations with international partners.
🔄 International Relations: Iraq’s diplomatic overtures to both Iran and the United States signal an attempt to balance relationships between competing regional powers. This could place Iraq in a unique position to act as a mediator while ensuring its own national interests are met.
📜 Long-term Economic Planning: The commitment to a detailed economic strategy that includes both regional cooperation and international partnerships indicates a forward-thinking approach. This strategy is essential not only for immediate stability but also for long-term growth and development in Iraq.
Economic and banking adviser Samir Al-Nusairi explained that the closure of the electronic platform on 31/12/2024, which was used in the Central Bank to pre-examine and control the transparency of foreign transfers, ensure its access to the final beneficiary and overcome suspicions of money laundering and terrorist financing, is not as some believe that the closure of the platform is a closure of external transfers while it is a change in mechanisms to achieve fluidity and speed by reducing loops.
Al-Nusairi said in a televised interview that it is not normal for the Central Bank or the US Federal Bank to practice executive procedural operations, but the task of central banks is supervision and control. The electronic platform was a stage in this direction, and now we have reached the stage practiced in the countries of the world in accordance with international banking standards through the direct relationship between local banks and correspondent banks.
He added that transfers in other currencies will enable Iraqi banks that do not have correspondents in American banks to make transfers through correspondent banks in other countries such as China, Turkey, the United Arab Emirates, India, Europe, Jordan and Saudi Arabia. This will lead to expanding the number of Iraqi banks participating in foreign transfers and reduce pressure on other banks.
He stresed that the exchange rate announced as the parallel rate does not express a price fact, firstly, because Iraq does not apply to the situation of the parallel market, which is achieved only when it has sources of dollars and currencies other than the Central Bank, such as private sector exports, transfers, residents abroad, tourism and others, so it has exchange rates that correspond to the official exchange rate of the central bank, and that speculating in dollars on the black market is accounted by law.
Second, the limitation of the sale of the cash dollar for travelers and with a tight mechanism made the sales of the cash dollar at the lowest level, so the circulating of it is what is what is left for travelers, and we should look at the price in which the central bank covers.
All foreign operations of imports and personal transfers for study and treatment abroad are legitimate purposes, which explains the stability of prices by the current inflation rate, which is by 3.1% below the inflation rates in the Arab, regional and neighboring countries.
This means that the Central Bank has achieved a basic objective of monetary policy.
Al-Nusiri was surprised that some calculate the revenues of banks from the sale of dollars by measuring the difference between the market price and the official price, which is a big mistake because banks do not transfer at the market price but at the official price monitored by the Central Bank, indicating that the foreign currency sale window is dedicated to secure the Iraqi dinar for the purposes of the operational budget of the Ministry of Finance and to finance banks’ balances in foreign currencies for external transfers and the coverage of the cash dollar for travelers and other legitimate needs of citizens.
...their banks are now handling all the currency exchanges from the region and around the world. Not just the dollar, they are exchanging dinar and the increased value is about to be seen by us.
...the contractors received their exchanges, Iraq has removed all the corruption, ISIS, and now they have digital banking in the banks taking the control of the money out of the hands of the CBI.
The amendment for the rate changes was done last weekend and the Iraqi people know the rate is changing AND the banks in Iraq are operating with the basket of currencies for international business as we speak.
