Frank26
[Iraq boots-on-the-ground report]
FIREFLY:They showed several individuals that were busted in the new system trying to laundry money but they can't now with this new system.
FRANK: That's right. Security and stability was the #1 thing that was needed in order to release the new exchange rate. That's why it's exciting right now.
UPCOMING US SANCTIONS THREATEN 15 IRAQI BANKS DUE TO CURRENCY SMUGGLING!
(Only 5 Iraqi banks were limited form the US dollar not 15. Also these are NOT US sanctions on restrictions by the CBI. So this article has it all wrong! ☹ Even the CBI director told the new media to stop calling them sanctions.)
In a surprising development, press reports confirmed that the US Treasury Department is preparing to impose new sanctions on more than 15 banks in Iraq, including private and government banks, in a move aimed at combating currency smuggling, which has recently become a controversial issue.
These sanctions come at a sensitive time for the Iraqi economy, which is already facing significant challenges in the currency and finance sectors. According to sources, the US government is targeting these banks for their involvement in foreign currency smuggling, which threatens the stability of the Iraqi economy and further depreciates the value of the dinar.
REASONS BEHIND SANCTIONS
US officials believe that many Iraqi banks have indirectly contributed to currency smuggling by transferring money out of Iraq illegally, which has led to a shortage in the country’s foreign currency reserves. On the other hand, these operations contribute to facilitating the financing of illicit activities, which include financing armed groups or smuggling money to other countries.
Despite warnings from Iraqi authorities about the negative effects of these sanctions, the United States appears to be moving forward with this step in response to the escalation of these activities.
IMPACT OF SANCTIONS ON IRAQI BANKS
If the sanctions are confirmed, the Iraqi banks involved could face significant difficulty in dealing with the international financial system. This means that banks could have their accounts frozen or be prevented from conducting international transactions, which would negatively affect the ability of Iraqi companies and individuals to deal with international banks. (but only if they illegally deal in US dollars. Let’s not exaggerate!)
These sanctions are likely to be an additional blow to the Iraqi economy, which suffers from a lack of investment and weak trade exchanges. But they may also be an opportunity for the Iraqi financial system to correct and move towards improving financial supervision. (Not really as importers can still go to other banks for the dollars.)
THE ROLE OF THE IRAQI GOVERNMENT IN DEALING WITH SANCTIONS
The Iraqi government is expected to exert significant pressure to curb currency smuggling, by strengthening oversight of the banking system and taking strict legal action against banks involved. These measures may include restructuring the financial and banking system and imposing new laws that ensure compliance with international standards.
CONCLUSION
US sanctions (CBI restrictions) on Iraqi banks raise many questions about the future of the Iraqi economy and relations with major powers. While the United States seeks to combat currency smuggling, the challenges facing Iraq may require radical internal solutions to ensure the stability of the financial system and open new horizons for economic growth away from these international pressures.
Mnt Goat
Another major step to fully globalizing Iraq is in the article titled “IRAQ MOVES TOWARDS GLOBALIZATION ...IMPLEMENTATION OF INTERNATIONAL ACCOUNTING STANDARDS BEGINS IN 2026”.
...in my eyes this is not going to trigger the RV but is certainly a right step in the direction we want.
Remember the CBI told us that January is the most optimistic to revalue the dinar with any substantial change in value. Why? It is because of the accounting practices and it is MOST convenient to begin a new fiscal year clean with a new rate.
Remember we may be already into February but we know they just passed the amendment to the budget law and so they have not yet even opened the 2025 budget. So there still can be a rate change coming...
FA BURNING ECONOMIC DEBATE.. IS RAISING THE EXCHANGE RATE THE MAGIC SOLUTION FOR THE IRAQI ECONOMY?
An ongoing debate among economists in Iraq about the effects of adjusting the exchange rate of the Iraqi dinar against the US dollar on the national economy, especially in the fields of agriculture and industry.
The opinions of experts and officials vary between supporters and opponents of changing the exchange rate, with a focus on how this will affect the productive sectors and the overall economy.
In 2020, the Central Bank of Iraq decided to adjust the exchange rate of the dollar against the dinar, as the purchase price of the dollar from the Ministry of Finance reached 1,450 dinars, while its selling price to banks was set at 1,460 dinars, and to citizens at 1,470 dinars per dollar.
In February 2023, the Central Bank of Iraq announced another adjustment in the exchange rate, to become 1,300 dinars per dollar, as the decision came in an attempt to control inflation and achieve stability in the general price level.
Protecting the Iraqi Dinar
In turn, economic expert Alaa Al-Fahd believes that “the current exchange rate represents a balance that protects the value of the Iraqi Dinar and maintains the general price level, which helps protect the poor classes.”
“The main reason behind the rise in production costs is due to the rise in energy prices, not the exchange rate,” he told Iraq Observer.
“The real problem that hinders the rise of productive sectors, especially agriculture and industry, is related to the energy crisis, especially electricity, as this crisis leads to higher production costs, which prevents the development of these sectors,” Al-Fahd added, noting that “countries like China have a low exchange rate for their currency, and despite that, their industry is thriving, which means that the decline in the currency may be an opportunity for the growth of local production, and not necessarily an obstacle to development.”
Historically, the Iraqi dinar has witnessed fluctuations in its value. In 1980, the dinar was equivalent to 3.3 US dollars, but its value deteriorated during the Iran-Iraq war, falling to about 4 dinars to the dollar in 1988. After the invasion of Kuwait and the imposition of an economic blockade in the 1990s, the value of the dinar deteriorated significantly, reaching about 3,000 dinars to the dollar in 1995.
Raise the exchange rate
On the other hand, Deputy Governor of the Central Bank of Iraq, Ihsan Shamran, believes that “
industry will not rise unless the state finds itself in it, and neither will agriculture unless the exchange rate is changed, as the current rate is unfair, and the Iraqi exporter sells goods at any price and makes a profit because the dollar is very cheap.”
Shamran added in a press statement that “the cheap dollar is pushing some exporters to sell any commodity inside Iraq in exchange for the dollar, as the exchange rate should be between 2,000-2,500 dinars per dollar, considering that the Iraqi currency is very strong due to its high balance.”
He pointed out that “Iraq has reserves of nearly 120 billion dollars against a trading source estimated at 103-104 trillion dinars, which gives the Iraqi currency a cover of nearly 170%, which is not a small matter, but the relationship with the dollar requires adjusting the exchange rate to achieve the required balance.”
Experts have differed on the impact of these amendments on the Iraqi economy. While some believe that devaluing the dinar enhances the competitiveness of local products and reduces the budget deficit, others believe that it leads to higher living costs and negatively affects low-income groups.
Economists believe that the real problem lies in the structure of the Iraqi economy and its heavy dependence on oil, in addition to challenges related to energy and infrastructure, which hinder the development of other productive sectors.
WOLVERINE
Get ready everyone. We are ready to start
The Iraqi president signed the amendment
budget, which will be published in the
official Iraqi gazette (Al-Waqai)
Monday, February 17, 15 days after the amendment was approved.
----
TRANSLATE IN SPANISH
WOLVERINE
Preparanse todos. Estamos listo para empezar
El presidente iraquí firmó la enmienda
presupuestaria, que se publicará en el
gaceta oficial iraquí (Al-Waqai) el
lunes 17 de febrero, 15 días después de la aprobación de la enmienda.
IT BRINGS BENEFITS TO BOTH AMERICANS AND IRAQIS. WASHINGTON IS OPTIMISTIC ABOUT AL-ZAIDI BECOMING PRIME MINISTER: WE WANT A SOVEREIGN IRAQ...