NOTES FROM ADAM : We are literally around the corner from notifications!! @DINARREVALUATION #iqd

 

AN ECONOMIST ANSWERS THE FEASIBILITY QUESTION: HAS ELECTRONIC PAYMENT IN IRAQ ACHIEVED THE DESIRED RESULTS?

 AN ECONOMIST ANSWERS THE FEASIBILITY QUESTION: HAS ELECTRONIC PAYMENT IN IRAQ ACHIEVED THE DESIRED RESULTS?

“Still not up to par?”

Economist Munar Al-Abidi raised a question about the feasibility of electronic payment in Iraq and whether it has achieved the desired results after its use in many government institutions.

Al-Obaidi said in a clarification received by Al-Jabal, “Has electronic payment achieved the desired results after two years of moving towards its widespread use in most state facilities and institutions?” He explained that “the importance of electronic payment in any country is not measured by its ability to reduce the volume of cash circulating outside the banking system, as real cash exists to fulfill its role in circulation, not to be physically stored within financial institutions.” 

He added, “The true measure of success for electronic payment strategies is the extent of development of the trust structure in the banking system, which is accurately measured by the ratio of the broad money supply (M2) to the narrow money supply (M0).” 

Al-Abidi pointed out that, “To clarify what these percentages are in a simplified manner: 

Suppose a person has 100,000 dinars in cash:

• If the entire amount is kept in cash, M0 = 100,000.
• But if he deposits 30,000 on his electronic card and withdraws 70,000 in cash, then:
• M0 = 70,000
• M1 = 30,000

He pointed out that “if he transferred 15,000 dinars from his bank account linked to his electronic card to a fixed deposit at the bank, the indicators would be:

• M0 = 70,000
• M1 = 15,000
• M2 = 15,000″. 

He pointed out that “the more people trust the banking system and electronic financial transactions, the more their electronic balances (M1) increase, and the more their confidence in the feasibility of banking investment increases, the higher the value of their long-term deposits and consequently the increase in (M2). It is not important the amount of money supply, whether inside or outside financial institutions, as much as their ability to move it effectively more than once and the ability to raise the value of M2 at the expense of M0.”

Therefore – and this is what Al-Ubaidi says – the effect of these meanings is as follows:

•  A higher M1/M0 ratio indicates greater confidence in daily dealings with the banking system.
• A rising M2/M0 ratio indicates increased individual confidence in investing within the banking sector.

Al-Obaidi continued, saying, “Iraq’s data over the past two years, between March 2023 and March 2025, showed that the M2/M0 ratio rose from 1.11 to 1.25, an increase of 12.4%, reflecting an improvement in reliance on banking services and electronic payments. However, despite this improvement, the ratio remains low compared to other countries such as Saudi Arabia, where the ratio reached 6.4 during the same period.”

According to Al-Abidi, “An important question may arise: How can M2 be so much larger than M0?” He answered, “This can be done through the cumulative role of the banking system: If the person mentioned in the example deposits 15,000 dinars into his card account, and the bank re-lends 10,000 of them to another person who in turn re-deposits them, the total money circulating within the system becomes larger than the original monetary base, and thus the ratio of M2 to M0 rises. Therefore, when this ratio in Saudi Arabia is 6.4, this means that banking operations conducted on the same monetary mass are circulating quickly, which indicates the efficiency of the banking sector and its ability to gain the confidence of customers in the banking sector.”

He considered that “despite the positive growth in electronic payment indicators in Iraq, there is still a long way to go to reach global levels. However, the general trend indicates an encouraging gradual improvement in individual confidence in the banking system, albeit at a slow pace.” He explained: “Also, the M2/M0 ratio in March 2025 decreased slightly compared to February 2025 due to the decline in the value of deposits in the sector, which is an indicator that requires close monitoring and work to correct the ratio to be in a positive direction.” 

He continued: “Measuring the success of electronic transactions must be subject to clearly adopted objectives, one of which is to bring the M2/M0 ratio to the 3-point mark by gradually reducing the money supply and withdrawing it from circulation, and increasing the number of deposits and banking transactions by pressuring private and public institutions to adopt banking transaction mechanisms, most importantly electronic payments, and providing appropriate incentives to customers to encourage them to continue using them.” 

STATUS OF THE RV , PART. 3 BY MNT GOAT

 STATUS OF THE RV , PART. 3

Article 3 Begins Here:

IRAQ MPS SET TO APPROVE ANTI-MONEY LAUNDERING LAW

Members of Iraq’s counter-terrorism force take part in an intensive security deployment in Baghdad’s Al-Adel district October 28, 2014. The elite counter-terrorism unit was deployed to the streets of the capital Baghdad on Tuesday to chase sleeper cells, while heavily armed and masked members patrolled the streets of Baghdad’s Sunni neighborhood of Al-Adel to carry out vehicle checks and search for people who are wanted. REUTERS/Ahmed Saad 

IRAQ IS STEPPING UP EFFORTS TO CURB MONEY LAUNDERING AND TERRORISM FINANCING.

Majda Mohsen, ZAWYA

July 21, 2015

Iraq is stepping up efforts to curb money laundering and terrorism financing.

Iraq’s parliament is expected to soon endorse a new law that aims to combat money laundering and terrorism financing, the government’s economic adviser said.

Mazhar Mohammad Saleh told TR Zawya that the draft law, which was approved by the cabinet in June, would be more inclusive than a 2004 law that was drawn up by the Coalition Provisional Authority. He said the new law would cover tax evasion, smuggling of antiquities and cash as well as corruption.

“The new law will draw additional policies, legislations and procedures to chase and trace money and smugglers through a national council,” Saleh said.

“It will also meet Iraq’s financial interest and open the way for the country to conduct economic activities at the international level,” he added. “Between 3-5% of Iraqi GDP has been lost due to smuggling during the past 10 years as a result of money laundering.”

(Mnt Goat – this last statement highlighted is exactly where I am going with getting into the details of the AML today. One thing leads to another. They needed sound AML laws in order to move ahead internationally.) 

The Financial Action Task Force (FATF) said in June that Iraq has not made sufficient progress to stem money laundering and terrorism financing. It said Baghdad needed to adequately criminalise such acts, establish a legal framework for identifying, tracing and freezing terrorist assets, establish effective customer due diligence measures and a financial intelligence unit, introduce suspicious transaction reporting requirements and put in place a supervisory and oversight program for all financial sectors.

(Mnt Goat – yes, this is why we didn’t see and could not have seen the RV back then. Get it now?) 

“Punishments imposed under the old law were ridiculous, with those convicted of money laundering facing no more than four years in jail,” said legal expert Tariq Harb.

The draft law is being introduced at a time when global efforts are being exerted to cut off the funding of militant group Islamic State, which has taken control of large swathes of Iraq and Syria, and whose main sources of revenue include bank looting and extortion, control of oil fields and refineries and cash smuggling.

The Iraqi government and several global financial institutions have taken steps to prevent banks in territories held by Islamic State from accessing the international financial system, FATF said in a report issued in February.

Building confidence

Naim Khudair, director general of the Anti-Money Laundering Office at the Central Bank of Iraq, said the government had pledged to pass new legislation for anti-money laundering and terrorism financing by October 2015.

“There are instructions to give special importance to monitoring bank transactions by politicians and their families in addition to monitoring their dealings in real estate and gold,” Khudair said.

Central Bank Governor Ali Al Allaq said the new law would help reassure foreign investors.

“The new law will facilitate the entry of big companies into Iraq and increase their confidence in the country’s economic environment,” he said.

The deteriorating security situation, poor governance and inconsistent regulations have kept Iraq at low ratings of global rankings for doing business, according to the World Bank.

Mithaq Al Hamidi, a member of parliament’s economy and investment committee, said that while it would prove difficult for Iraq to recover smuggled funds, the new law would have a greater impact in preventing illegal transactions.

MP Najeeba Najeeb, another member of the committee, said that the new draft law was backed by all political parties. But she said that more cooperation between the executive, legislative and judiciary branches were needed to tackle corruption and money laundering.

© Zawya 2015

END OF PAST ARTICLES

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RV UPDATE: Back screen rate for dinars showed up as approximately $5 this morning at JPMorgan Chase

 

TRANSFORMATION IS A FINGERPRINT… “ESREFLAK” RESHAPES THE RELATIONSHIP BETWEEN CITIZENS AND MONEY.

 TRANSFORMATION IS A FINGERPRINT… “ESREFLAK” RESHAPES THE RELATIONSHIP BETWEEN CITIZENS AND MONEY.

Baghdad/Al-Masala: Iraq has achieved a qualitative leap in the electronic banking sector, ranking third in the Arab world in the number of bank cards issued, with a rate exceeding 46.5 cards per 100 people. This rate puts Iraq ahead of Jordan and Morocco, and close to the Gulf states, which have long led the field.

This progress was based on a dual strategy that combined institutional support from the Central Bank of Iraq with popular support through awareness campaigns that met with a remarkable response, most notably the “Spend It” campaign, which sparked a wave of cultural change in the way people handle money.

In a short period of time, the campaign was able to break through the walls of cash habits, replacing them with easy and safe digital options. Hashtags like #spendyours and #makeyouruseseasier flooded social media platforms, transforming from mere advertising slogans into real-life experiences shared by people.

Haider Al-Zaidi tweeted on the “X” platform, saying: “This is the first time I have paid with a fingerprint and without cash at Abu Ammar’s store. Thank you to the #SpendYou campaign, which taught me this feature and facilitated the procedures.” This is a common testimony among new users of electronic payment.

The campaign invested more in field presence than in billboards, entering popular markets and signing partnerships with restaurants, gas stations, and even food stalls, giving it a popular feel uncommon among official digital transformation campaigns.

The Central Bank of Iraq confirmed in its latest data that electronic payment transactions increased by 62% during the first quarter of 2025 compared to last year, with more than 15 million card and point-of-sale (POS) payment transactions recorded. This reflects widespread acceptance of a more reliable technical infrastructure.

The campaign focused on the concept of simplicity of use and security of the experience, removing the psychological and cultural barriers associated with fear of financial technology, especially in a country where a large portion of the economy still operates in cash and on the margins of banking.

The campaign was integrated into a comprehensive national vision for the transition to a cashless economy. However, it did not follow the traditional path of digitization, opting instead for gradualism and partnership, using a language relatable to the people and tangible services on the ground.

Most Iraqi cities have witnessed a growing demand for card and mobile payments. This trend is evident in transportation stations, small shops, and even kiosks, which now display signs reading “We support you, spend it,” a direct reflection of the shifting business and societal mentality.

“Asreflak” gained double power because it wasn’t just a top-down decision, but rather the product of a need from below. Field monitoring showed that people were ready to embrace this change, but were waiting for trust, and now they have found it.

STATUS OF THE RV , PART. 3 BY MNT GOAT

 STATUS OF THE RV , PART. 3

Article 2 Begins Here:

IRAQ’S CENTRAL BANK UNDER INVESTIGATION FOR ALLEGED MONEY LAUNDERING

Country’s Supreme Judicial Council also probing allegations of involvement in terrorist financing by Central Bank of Iraq, along with 13 private banks

Published date: 26 December 2020  

Iraq’s Supreme Judicial Council is investigating the country’s central bank and 13 private banks over alleged involvement in money laundering and terrorist financing operations, lawmakers and officials have told Middle East Eye.

In response to a parliamentary probe that ended last month, the council is understood to be investigating cases of customs and tax evasion and potential fraud in connection with the foreign exchange auction run by the Central Bank of Iraq (CBI) and the 13 private entities.

A statement issued by the Supreme Judicial Council on Thursday said that the Rusafa Investigation Court, which oversees cases of integrity, money laundering and economic crimes, had decided to “bring in” the directors of the banks “for violating the procedures of the Anti-Money Laundering and Terrorism Financing Law (No 39) of 2015″.

“Biden will not change policy towards Baghdad, Iraq’s deputy prime minister says”

The statement did not mention any details of the “violations,” or the names of the banks involved. However, the Parliamentary Finance Committee revealed the existence of “suspicious operations” concerning officials in the CBI, who were reported to be aiming to exploit the foreign exchange auction.

MPs and bankers told Middle East Eye that the CBI, which does not deal with individuals, had become a hub for money laundering and currency smuggling due to weak supervisory measures.

To acquire US dollars, Iraq has an account with the Federal Reserve Bank of New York, which draws on Iraq’s vast oil reserves. As the Baghdad government sells oil in US dollars, it uses the currency to buy Iraqi dinars from the CBI in order to finance salaries and public services.

The CBI then sells the dollars to private banks with a mark-up of 10 dinars on the dollar. Instead of bringing the dollars back into the country, the CBI is understood to deposit it in foreign banks, outside of the country, in exchange for invoices presented by the private banks to cover imported goods, lawmakers and bankers told MEE.

‘False invoices for fake goods’

“The game is that these [private Iraqi] banks give false invoices for fake goods,” Mohammed Saheb al-Darraji, a member of the Parliamentary Financial Committee and the chairman of the parliamentary probe, told MEE.

“In other words, there are no goods for the money deposited outside Iraq, and this is money laundering, as the source of this money is unknown or illegal.

“The CBI has to investigate the invoices and impose fines. But the CBI has stopped checking bills since 2016, under the pretext that they are not responsible for this matter,” he added.

“The operation is deliberate. The CBI is ignoring this step due to bribes and political influence in order for the money laundering process to take place properly.”

‘There are no goods for the money deposited outside Iraq, and this is money laundering as the source of this money is unknown or illegal’

– Mohammed Saheb al-Darraji, chair of parliamentary probe

The investigative committee chaired by Darraji revealed that the period from 1 January to 1 September had seen the transfer of $27bn out of Iraq, while receiving no more than three percent of its customs revenues.

According to customs instructions, the merchant who imports goods from abroad must pay 15 percent of the value of the goods as customs, meaning that the annual customs revenues must reach 15 percent of the value of the sums transferred outside Iraq in dollars when it is transferred under the pretext of importing goods. “The customs revenues that Iraq is supposed to get are 15 percent of the value of the amount that was transferred, that is, $4bn. The actual receipt is only three percent, or $418m,” Darraji said.

“This means that the rate of waste reaches 12 percent. Where did this go?”

Until last week, the CBI used to buy $1 at 1,182 dinars from the Iraqi government and then sell it to private banks and financial transfer offices for 1,190 dinars.

Lawmakers and bankers told MEE that the private banks would then sell $1 to the final beneficiary at a price of 1,250 dinars, a difference of up to 60 dinars per dollar.

“The daily profit from this operation reaches $11m, while the monthly profit reaches $220m, while the annual profit reaches $2.64bn,” Sabah al-Saaidi, a member of the Parliamentary Integrity Committee, said in a televised parliament session last month.

“The only beneficiary of this operation is a group of private banks. Neither the government nor the citizen are beneficiaries of this process.”

Panic as prices rise

Most Iraqi political forces depend on illegal sources of funding, including through money laundering, commissions, extortion and oil and drug smuggling, lawmakers said.

There are at least 52 private banks in the country, according to the public records of the CBI, and most are either used or owned by political forces to participate in the foreign currency auction and conceal their funding sources, Parliamentary Financial Committee investigations revealed.

In an attempt to curb the smuggling of the dollar and reduce the annual budget deficit for 2021 – around $43bn – the Iraqi Ministry of Finance raised the dollar exchange rate to 1,450 dinars on Saturday, which immediately caused the prices of goods to rise sharply, causing panic among citizens.

Iraq hurtling towards a financial crisis that could leave millions unpaid.

While the government has defended the decision to devalue the dinar, which means it will get more Iraqi dinars from the central bank, the move threatens to spark popular demonstrations across the country.

A key adviser to Iraqi Prime Minister Mustafa al-Kadhimi told MEE that devaluation, tax increases and austerity measures were the “only option” to address the liquidity crisis after proposals to reduce public salaries had been rejected.

“The devaluation is a response to the urgent need to stop the collapse of the Iraqi economy, reduce the budget deficit and stop the bleeding of foreign currency – and this [is in response] to pressure from the World Bank and the International Monetary Fund,” the adviser said.

“Iranian and Turkish goods have been invading Iraqi markets, and the competing power of Iraqi goods… is almost non-existent, with complete reliance on oil sales. All these factors have forced the government to search for other financial resources to reduce the budget deficit.

“The country is heading for a real disaster and Kadhimi is trying to stop the bleeding with shocking measures,” the adviser added.

“All political forces know this and agreed to it, but they have actually started trading this issue, and a number of them have begun to mobilise demonstrations to protest against the government’s actions.”

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🚨 APRIL 1: Iraq’s Global Trade Switch Goes Live !! @DINARREVALUATION #iraqidinarinvestor #iraq