IRAQ SIGNS A MEMORANDUM OF UNDERSTANDING WITH THE BRITISH EXPORT CREDIT GUARANTEE CORPORATION.. AND THESE ARE ITS OBJECTIVES
Today, Tuesday, in the British capital, London, a memorandum of understanding was signed between the Sovereign Guarantees Initiative Committee and the British Export Credit Guarantee Corporation, on the sidelines of the Prime Minister’s official visit to the United Kingdom.
The ceremony was held under the patronage of Deputy Prime Minister and Minister of Planning Mohammed Tamim, where the Chairman of the Initiative Committee, Advisor to the Prime Minister Mohammed Sahib Al-Daraji signed on the Iraqi side, while the Director of the Business Group, Adam Harris, signed on behalf of the British Foundation.
The terms of the memorandum include supporting imports of production lines and industrial and agricultural technology for the Iraqi private sector from the United Kingdom.
This memorandum is valid for five years, and comes within the framework of the agreements and memoranda of understanding signed by the Iraqi government with a number of European countries, and aims to raise the efficiency of the Iraqi private sector and achieve integration with the international community.
In another context, the two sides agreed that the British Export Credit Guarantee Corporation would finance a number of vital projects for the Iraqi government, and prepare to increase the financing ceiling for productive government projects.
The signing of the Memorandum of Understanding was preceded by a joint meeting between the Iraqi delegation and the British Foundation, during which mechanisms for joint cooperation between the two sides were discussed, in a way that enhances bilateral relations between the two countries.
IRAQ CALLS ON THE WORLD TO CONDUCT A COMPREHENSIVE REFORM OF THE FINANCIAL SYSTEM AND A DIALOGUE ON TECHNOLOGY GOVERNANCE
The representative of Iraq to the United Nations in New York, Abbas Kazim Obaid, in his capacity as Chairman of the Group of 77 and China, delivered the group’s statement during the session of the United Nations General Assembly in which the Secretary-General reviewed the priorities of his term for the year 2025, in light of the circumstances and challenges facing the international community.
In his statement, the representative of Iraq stressed the complex and interconnected global challenges, including ongoing conflicts, the effects of climate change, poverty, hunger, high debt levels, limited financing for the Sustainable Development Goals, and the growing digital divide. He stressed the need to support developing countries in financing sustainable development through the Fourth Conference on Financing for Development.
He called for a comprehensive reform of the global financial system to address structural inequalities, ensure equitable access to long-term finance, and advance sustainable development efforts. He also stressed the importance of fully implementing the decisions of the Conference of the Parties on Climate Change, while supporting the Secretary-General’s efforts to achieve the Sustainable Development Goals by 2030.
Obaid also called for a comprehensive international governmental process to address the digital divide, the establishment of an independent scientific team for artificial intelligence, and the launch of a global dialogue on technology governance.
The Bitcoin community is continually exploring Layer 2 technologies (e.g., the Lightning Network) and side projects that could, in theory, offer greater compatibility with traditional finance frameworks. So theywill not be blacklisted. But the visibility on ISO-20022 platforms may be reduced. Not sure.
Institutions might prefer ISO 20022-ready cryptocurrencies if they want tighter integration with their internal systems. Where shenanigans in the blackmarket will not affect their overall system of regulatory protocol when it comes to processing transactions.
I hope you all know that the Iraqi Dinar has a lot to do with this statement by Donald Trump.
CENTRAL BANK: CLOSING THE ELECTRONIC PLATFORM ENHANCES FINANCIAL STABILITY
Two weeks after the Central Bank of Iraq implemented its decision to close the electronic platform for foreign transfers, opinions differed in economic circles regarding the impact of this measure on the financial situation in Iraq, especially in light of the current economic and political conditions.
Despite the initial criticism the decision sparked, many experts and observers believe it is a “necessary step” to address the economic challenges Iraq is currently facing, especially in terms of reducing pressure on the central bank’s reserves and enhancing the stability of the exchange rate in the local market.
The Central Bank of Iraq confirmed that closing the platform will not affect the movement of remittances at all, as remittances through this platform until 12/23/2024 represent less than 7 percent of total sales, according to a source in the bank.
The source explained to Al-Sabah that “the aim of this step is to control financial operations and work within the international scope in the process of foreign transfers and adopt the method of correspondent banks, which contributes to enhancing the stability of the financial sector in light of the current circumstances.”
The Central Bank also indicated that the strengthening of the balances of Iraqi banks that have correspondent banks abroad will continue as is, explaining that this does not mean stopping the “currency sale” operations, but rather a change in their mechanisms within a method followed all over the world. He added that the mechanism for strengthening bank balances has changed, as it is now done directly through the accounts of Iraqi banks with correspondent banks, instead of the accounts that were done through the Central Bank, and that this new mechanism is dedicated to meeting the needs of imports and foreign trade of goods, commodities and services, which contributes to supporting the financial and economic stability of Iraq.
For his part, the economic advisor to the Prime Minister, Mazhar Mohammed Salih, explained that the Central Bank had previously financed foreign trade through the currency sale window to perform two basic functions:
1.the first is to intervene in the money market to absorb liquidity and maintain the stability of the exchange rate,
2.and the second is to finance foreign trade for the private sector.
However, the Central Bank faced major challenges due to the requirements of the Federal Reserve and the US Treasury to ensure that the dollar is not used in ways that conflict with US foreign policy and national security. Salih added to Al-Sabah that “the new transfer system is based on a direct relationship between local Iraqi banks and foreign correspondent banks with a focus on compliance issues and combating money laundering.”
He pointed out that the Central Bank has strengthened the dollar accounts of Iraqi banks in foreign correspondent banks, which has reduced the direct intervention of the Central Bank and allowed a greater role for foreign banks in auditing commercial operations.
Saleh stressed that the Central Bank has taken steps to diversify the foreign currency portfolio, including the use of the Euro, the UAE Dirham, and the Chinese Yuan, to facilitate transactions with major trading partners, noting that the new mechanisms aim to facilitate foreign trade and enhance control over money transfer operations, while ensuring that goods and services reach the country properly and without violations.
The financial advisor to the Prime Minister also noted that “these new measures do not affect the flow of supplying the Iraqi economy’s need for dollars, but they are a major development aimed at enhancing transparency and compliance with international and local laws.”
In contrast, financial and banking researcher Mustafa Hantoush believes that the Central Bank of Iraq is trying to avoid the damages resulting from exporting the dollar by adopting monetary policies and currency management that ensure reducing its liability without affecting its financial strength.
Hantoush told Al Sabah that he believes that the Central Bank seeks to avoid this responsibility by authorizing foreign banks that have accounts in correspondent banks with the approval of their branches or foreign owners.
He also pointed out that if the Central Bank wanted to reduce the gap in the dollar, it should open the door to competition between banks and rely on a basket of currencies to expand the options available in the market, calling for amending the criteria for evaluating local banks and raising their financial capabilities, which would contribute to achieving stability and increasing competitiveness, and thus stabilizing the dollar price.
He
also suggested the possibility of transferring the dollar to trading platforms in the stock market, to be sold to those entitled to it through direct transactions instead of sending the dollar exclusively to banks, stressing the need to organize these operations by switching to the “Forex” market, and implementing mechanisms that ensure that funds are not transferred until the goods arrive with the banks’ guarantee.
He explained that these measures would increase tax revenues and limit illegal trade, which would contribute to strengthening the national economy.
For his part, economic expert Nabil Jabbar Al-Tamimi said: “The transfer platform at the Central Bank of Iraq was a mechanism for conducting financial transfers for merchants and importers through local banks, as the platform supervised these operations.”
He added to Al-Sabah, saying: “The Central Bank has created the necessary conditions for conducting transfers by establishing direct relations between local banks and international banks through major correspondent banks, which means that transfers can be conducted in accordance with international standards without the need for an electronic platform.”
(Mnt Goat: In other words economic expert Nabil Jabbar Al-Tamimi is saying they are ready for FOREX after implementing all these banking and financial reforms.)
Al-Tamimi explained that the Central Bank has replaced the electronic platform with regular and natural transfer mechanisms, through solid local banks, which provides merchants with direct ways to transfer money, stressing that these mechanisms contribute to their obtaining the dollar at the official price, which helps in gradually reducing inflation as a result of the stability of the official dollar price.
He also stressed that “with this measure, the need to deal in the unofficial dollar on the black market is reduced, which enhances the stability of the financial market in Iraq.”
