5 new decisions from the Central Bank of Iraq regarding the dollar
A meeting between the Central Bank, companies, banks and leaders of security agencies reached new decisions in the context of facing the exchange market crisis.
And a statement by the central bank stated, “The governor of the Central Bank of Iraq, Ali Mohsen Ismail, received, yesterday, Thursday, a number of leaders of the security services and owners of exchange companies and brokers in the sale and purchase of foreign currency.”
The meeting, according to the statement, discussed ways of coordination and procedures between the Central Bank and the concerned agencies, and defining roles and tasks in light of the directives of the Commander-in-Chief of the Armed Forces.
During the meeting, the following was directed:
1- The Central Bank is the only entity responsible for monitoring and inspecting banks, exchange companies, and non-banking financial institutions licensed by the Central Bank, based on its law.
2- The transfer of cash (in dinars and dollars) and any other currencies is permitted inside Iraq for all natural and legal persons, including banks, exchange companies and mediation companies in the sale and purchase of foreign currency, and their branches in all governorates.
3- With the aim of preventing the exit of cash funds across borders and ports, which exceed what is specified in the instructions of the Central Bank (10,000) ten thousand dollars, the competent security authorities follow up and inspect vehicles on the roads and paths leading to the borders to prevent smuggling and take legal measures in coordination with the Central Bank, with Providing the bank with the amounts of the discovered banknotes and their serial numbers.
4- The sums sent from banks and companies to their branches are accompanied by documents from the sending party showing the details of the sender and the recipient, and they are presented at the external control points upon request, and in the event of a suspicion or a need for confirmation, a contact is made with the Banking Control Department at the Central Bank on the numbers (07809224663 - 07853330555). - 07721111418 )
5- Banks and companies shall notify the Central Bank in the event that they are subjected to procedures or inspection visits, or interference in their business by non-employees.
The governor praised the role of the security authorities in uncovering attempts to smuggle dollars in the past days.
From the CBI site
The Governor of the Central Bank of Iraq receives a number of leaders of the security services and owners of exchange companies
His Excellency the Governor of the Central Bank of Iraq
During the meeting, the following was directed:
- The Central Bank is the sole authority responsible for monitoring and inspecting banks, exchange companies, and non-banking financial institutions licensed by the Central Bank, based on its law.
- The transfer of cash (in dinars and dollars) and any other currencies is permitted inside Iraq for all natural and legal persons, including banks, exchange companies, mediation companies in the sale and purchase of foreign currency, and their branches in all governorates.
- With the aim of preventing the exit of cash funds across the borders and ports, which exceed what is specified in the instructions of the Central Bank (10,000) ten thousand dollars, the competent security authorities follow up and inspect vehicles on the roads and paths leading to the borders to prevent smuggling and take legal measures in coordination with the Central Bank, while providing the bank The amounts of banknotes discovered and their serial numbers.
- Amounts sent from banks and companies to their branches are accompanied by documents from the sending party showing the details of the sender and the addressee , and they are submitted at the external control points upon request . )
- Banks and companies shall notify the Central Bank in the event that they are subjected to procedures, inspection visits, or interference in their business by non-employees.
Media Office
24/2/2023
The Sadrist movement comes out of its retirement by announcing the rejection of one
constituency in the elections
In the first declared political act since the leader of the Sadrist movement, Muqtada al-Sadr, suspended political action and participation in the process In political politics in Iraq, the leader of the Sadrist movement, Hakim Al-Zamili, announced his objection to amending the election law, which The coordination framework seeks to pass it in the Iraqi parliament. Al-Zamili published, through his official Facebook account, a video clip of the representative of the Shiite religious authority in Najaf Abd al-Mahdi al-Karbalai, and attached a comment saying, "No to the closed list, not to the single district." Al-Karbalai, the representative of the supreme Shiite authority, Sayyid Ali al-Sistani, says in the clip, “The opinion of the religious authority is Neither to the closed list nor to the one constituency.”
He adds, “The closed list closes the way for Voters choose who will represent them in parliament. Yesterday, the Iraqi parliament failed to hold its session devoted to discussing several issues, most notably the amendment of the election law Provincial and district councils. The Council included the discussion of the proposed third amendment law to the Provincial and District Council Elections Law No. 12 of 2008 contained in From the Legal Committee and the “Regions and Governorates that are not organized in a region” committee, within its agenda, while what was done The session, chaired by the First Deputy Speaker of Parliament, Shah Wan Abdullah, was postponed for half an hour. The parliament's media department said in a short statement that the House of Representatives had postponed its session until Monday Next. And in Baghdad, the thirty-fourth conference of the Arab Parliamentary Union will start in the Iraqi capital, Baghdad, today, Saturday, during The period from 25-26 February. The parliament's media department said in a short statement that the House of Representatives had postponed its session until Monday Next. And in Baghdad, the thirty-fourth conference of the Arab Parliamentary Union will start in the Iraqi capital, Baghdad, today, Saturday, during The period from 25-26 February.
The parliament's media department said in a short statement that the House of Representatives had postponed its session until Monday Next. And in Baghdad, the thirty-fourth conference of the Arab Parliamentary Union will start in the Iraqi capital, Baghdad, today, Saturday, during The period from 25-26 February.
Arab parliamentary delegations from most countries
The conference will discuss Arab support for enhancing Iraq's stability and sovereignty, with the participation of the heads of the councils and parliaments of the Arab member states The Federation, in addition to many parliamentary organizations and institutions that have observer status in the Federation. On Friday, the Iranian Mehr Agency revealed that an official visit by the Secretary-General of the Supreme Council is imminent Iranian National Security General Ali Shamkhani to Baghdad, with the aim of signing security agreements.The agency reported in Yesterday's news said, "The Iranian side, through Foreign Minister Hussein Amir Abd Allahian, informed Iraq Officially, the scheduled visit of the high-ranking Iranian official, through a verbal meeting between Lahian and National Security Adviser Qassem Al-Araji. And the agency stated that «Allahian expressed his regret at the failure to implement the previous agreement between the two countries to form a security committee A joint higher office between the two countries to follow up on borders and security developments in the region. Abdullahian also confirmed to Al-Araji that Iran "categorically rejects" the existence of groups he described as "hostile and separatist" within the borders of Iraq, pointing to "the continued presence of these groups, especially in The Kurdistan region of Iraq is unacceptable. The Iranian Foreign Minister indicated that «the visit of the Secretary-General of the Iranian Supreme Council will witness the signing of agreements security about this aspect,” according to the agency.
Steps to enhance {the strength of the dinar} and diversify monetary reserves
The Monetary Authority in Iraq expanded its efforts to strengthen the strength of the dinar and diversify cash reserves, after issuing the second package of facilities for obtaining foreign currency, during which it organized foreign trade financing operations from China directly and in the Chinese yuan currency, in a step explained by a number of specialists in the matter. Economic, as a gesture that may aim to reduce the "dominance" of the dollar over the Iraqi economy.
Governmental directives and central bank decisions were welcomed by a number of economists, especially the decision to reduce the sale of foreign currency against the dinar, stressing that these steps would control inflation rates, which witnessed clear increases as a result of the Iraqi market’s almost total dependence on imported materials and commodities, pointing out The survival of the parallel exchange rate rise is a temporary matter resulting from the regulatory conditions taken by the Central Bank in managing external transfer requests submitted by local banks.
Despite the "two packages" issued by the Central Bank, and the accompanying government measures that succeeded in aborting the rise in the exchange rate of the dollar, however, the foreign currency, and since the decision to sell it at an official price of 1332 dinars, is still "climbing", recording an exchange rate of 153 thousand dinars per hundred. Dollars, which affected (according to observers) commercial activity and the movement of buying and selling various materials in the local markets, prompting the Central Bank to allocate hot phone numbers to receive public remarks, complaints and inquiries related to outlets selling foreign currency in dollars.
The economist, Nabil Al-Marsoumi, commented on the Central Bank’s decision to regulate the financing of foreign trade with China in the yuan currency, saying: “Iraq began diversifying its cash reserves five years ago, but the dollar prevails because oil revenues are in dollars and has only a few Chinese yuan, as it tries Iraq today is restoring the value of the dinar through a strategy that is now being pursued by other official banks in the Middle East, which includes relying on the Chinese yuan currency for the purpose of trade exchange with China, in addition to the European euro, the Emirati dirham and the Jordanian dinar.
Al-Marsoumi believes, "The Iraqi authorities are seeking to provide other foreign currencies for local dealings besides the US dollar, as many countries have begun to take the same steps as the Central Bank of Iraq and others have already begun to implement them, as Saudi Arabia issued a decision that includes obtaining the Chinese yuan instead of the US dollar." The dollar in exchange for oil sold to China, while Egypt decided to replace the security bonds with the yuan instead of the dollar.
Despite the importance of these steps, however, Al-Marsoumi indicated that “in light of the pricing of oil in dollars and as long as oil exports dominate Iraqi exports, with the disappearance of non-oil exports, it becomes impossible for Iraq to liberate itself from the dollar, as Iraq ultimately needs the dollar to obtain yuan."
Contrary to the previous opinion, the economist, Nabil Jabbar Al-Tamimi, explained in a statement to “Al-Sabah” that “the purpose of the recent Central Bank decisions to finance foreign trade with China in the yuan currency aims primarily to pass remittances away from the dollar, and the requirements of that currency.” ".
Al-Tamimi indicated that, behind this step, the central bank aims to pass remittances worth 5-10 billion dollars with China, to finance trade and enhance commodity exchange for the Iraqi private sector, noting that the Iraqi central bank will use for that process the cash reserves available in Chinese banks, Which is equivalent to about one and a half billion dollars, which I expect to increase in the future.”
In the same context, the specialist in economic affairs, Dr. Ahmed Al-Rawi, praised, via “Al-Sabah”, the decision to adjust the exchange rate, describing it as “a political and economic decision at the same time. The dollar is in compliance with the decisions aimed at preventing the smuggling of the dollar abroad,” indicating at the same time, that “the persistence of the gap between the new official price and the parallel price in the market comes because the currency window has adopted electronic transfers, and this may determine who can obtain the official dollar, including small merchants and citizens, Which will push them to resort to asking for dollars from the parallel market, and thus an increase exchange rate.”
Dr. Al-Rawi also indicated that there is a cash mass in Iraqi dinars that exceeds 90 trillion dinars, most of which are held by citizens, indicating that this hoarding is caused by their lack of confidence in the Iraqi banking system, and therefore citizens, in anticipation of a decrease in the dinar, try to transfer their savings to dollars, which increased the demand for the parallel market, suggesting control In view of the continued high exchange rate, work to diversify the window to include some citizens for the purpose of travel and for some merchants who deal in cash more than electronic transfers, while tightening control over smuggling and money laundering, which is the main reason for the demand for the dollar and its high price.
“Beware of converting the dollar abroad.” A warning from the Turkish Central Bank to the banks
Turkey's central bank has warned the country's lenders against transferring any dollars to their correspondent bank counterparts abroad, according to people familiar with the matter, in the latest measure aimed at protecting the Turkish lira.
The warning comes after commercial banks net transfers of $2.3 billion to overseas deposit accounts in the first six weeks of the year, said one of the people, who asked not to be identified because the information is confidential.
The outflow of hard currency is hampering efforts to keep the lira stable and control inflation in the run-up to elections scheduled for May.
There are no regulations preventing banks from transferring capital to their correspondent banks abroad, though Turkish officials say they want to keep available cash in the hands of the monetary authority.
The foreign currency lenders' dealings have come under increasing scrutiny in recent months, with the central bank ordering them not to conduct large transactions with foreign banks after official trading hours.
The final warning applies to all commercial lenders operating in Turkey, including branches of foreign banks. The central bank declined to comment.
debt payments
Commercial bank debt payments are also causing an outflow of foreign currency and putting pressure on the lira. Banks have reduced their total foreign debts by half to $50 billion since the end of 2017, due to the high cost of foreign currency borrowing and the low domestic demand for hard currency loans.
The percentage of extending external borrowing at banks decreased to 92% in the second half of last year, compared to more than 100% in mid-2021, which transformed its position into a net repayment of external debt.
The central bank spent as much as $108 billion to keep the lira relatively stable last year, according to Bloomberg Economics estimates. Despite this, the lira remained the second worst performing emerging market currency.
Minister: The timing of the US measures on the dollar in Iraq was not innocent
link later
/ The Minister of Labor and Social Affairs, Ahmed Al-Asadi, considered, on Saturday, that the timing of the measures imposed by the US Treasury Department to limit currency smuggling in Iraq was "not innocent", because they were applied a few days after the formation of the current federal government headed by Muhammad Shia'a. Sudanese.
Al-Asadi said during his hosting of the Al-Rafidain Dialogue Conference held in Najaf, "The Iraqi delegation to Washington had a very positive atmosphere," noting that the Foreign Minister spoke with us at the meeting of the State Administration Coalition and talked about his meetings, and said: He had more than 20 meetings in Washington and spoke in 3 think tanks in Washington, and the atmosphere was very positive even in applying the controls imposed by the US Treasury. It is not a negative thing in reality, but the reaction and the impact it left on the Iraqi money market was negatIve
He added, "We have all been groaning for years and complaining about the currency auction and its badness," adding that "the timing chosen by the US Treasury was certainly not an innocent timing. Three days after the government took over its duties, it began applying these controls, but we in the Iraqi government dealt with It was a challenge and we dealt with it positively."
And the minister continued by saying, "We all want to put in place a tight mechanism that prevents manipulation of the currency auction, which everyone complains about without exception," stressing that "manipulation, harm and money laundering is the reason for the high exchange rate of the dollar against the dinar in Iraq.
Will the “Chinese Dragon” take over the Iraqi economy?
The Central Bank of Iraq organized the financing of Iraq's foreign trade with China directly in the Chinese Yuan currency. This step is the first of its kind after the package of measures that facilitate access to foreign currencies. The bank also initiated, in a statement, to take urgent measures aimed at compensating for the dollar shortage in the local market, which prompted the Iraqi Council of Ministers to agree to re-evaluate the Iraqi dinar against the dollar during the current month.
Strengthening bank balances
This step comes by the Central Bank to strengthen the balances of Iraqi banks that have accounts with Chinese banks in the yuan currency. The bank stated in the statement that the second option would be by strengthening the balances of Iraqi banks through the accounts of the central bank with JP Morgan Bank and the Development Bank in Singapore. The financial advisor to the Prime Minister, Mazhar Muhammad Salih, said that the first option depends on the reserves of the Central Bank of the yuan, while the other option will take advantage of the bank’s reserves in US dollars in the JP Morgan Bank and the Development Bank in Singapore, as it is scheduled that these banks will work to convert the dollar into Yuan and payment to the ultimate beneficiary in China.
Today, China is working to open up its financial markets gradually to raise the role of the Chinese yuan globally, in addition to the endeavor of some countries to diversify their dealings in foreign currencies.
The Advisor to the Prime Minister for Financial Affairs, Mazhar Muhammad Salih, said that this is the first time that imports from China are funded in yuan, and Iraq's imports from China are funded by dollars only.
Gas exploration
Yesterday, Iraq signed contracts for exploration and development of oil and gas fields with three international energy companies, including two Chinese companies, in a number of provinces. The Chinese Geo-Gad company will supervise the exploration and development of oil and gas fields in Diyala Governorate and Maysan Governorate in the south of the country, while the Chinese United Energy Group Ltd. will explore and develop an oil and gas field in Basra Governorate, at a time when the Emirates-based Crescent Petroleum Company signed contracts. Exploration and development of three oil and gas fields in the provinces of Diyala and Basra as well.
armed attack
Last Monday, a number of tribal militants in Dhi Qar governorate launched an armed attack on the Chinese company that implements Nasiriyah airport in southern Iraq. Sources said that the Police Command and the Operations Command were inquired about the shooting incident at the Chinese company executing Nasiriyah International Airport. The employees of the Chinese company, but there are no human losses, and the sources indicated that this matter occurs in the event of encroachment on the agricultural land belonging to the citizens without informing them before starting any project.
Research paper: Washington's emphasis on the dollar is a message to the factions that al-Sudani can benefit from
Former government advisor and researcher at the French National Center for Scientific Research (CNRS) Hisham Daoud wrote about the strategic and political dimensions of the dollar exchange rate crisis against the dinar in Iraq, stressing that the repercussions and consequences of the financial crisis resulting from the dollar are "the most dangerous since 2003" because they are not limited to Not only on the economic situation, but it also has geo-strategic repercussions, and it will have a great impact on the political power relations in Iraq.
Daoud stated in a research paper he wrote for the Emirates Policy Center (EPC), followed by "NAS" (February 25, 2023), that the goal of restricting the Federal Reserve in New York is to ensure Baghdad's compliance with an electronic system that guarantees transparency in dollar transactions and to stop money laundering and dollar "smuggling". To neighboring countries, and this constitutes an incentive for the Iraqi authorities to adopt more prudent financial and economic policies. "This American policy also includes a strong message to the Iraqi factions loyal to Iran, which depend to a large extent in exercising their influence on networks of corruption and money laundering."
Daoud pointed out that in the medium term, the Iraqi prime minister could benefit from the tightening US monetary policy to weaken his distant opponents, such as the Sadrist movement, as well as weaken his "close allies" in the coordination framework, who aspire to expand their sphere of influence and exercise extended executive powers.
The research paper indicated that, while the United States is likely to ease its financial policy towards Iraq, it is not possible for it to accept the return of the previous situation to what it was. The electronic financial system will be implemented gradually, and factions linked to Iran will have to deal with it as a fait accompli.
The following are excerpts from the paper:
The crisis was exacerbated to some extent by rumors, misunderstandings, and a state of uncertainty, which led to a halt in the demand for some imported goods, which became expensive and were seen as unnecessary, and thus affected small traders who are today threatened with leaving the market and joining the ranks of Jobless. The World Bank estimates the unemployment rate in Iraq at 14.5% among the general population, and 27.5% among youth. The crisis has also prompted many merchants to resort entirely to the informal market (let's call it the parallel market), or even to load trucks with dollars and transport them out of Iraq.
Over the years, the armed factions and parties took control of the banking and private financial sector (full control or owning a majority stake in banks), and used the dollar auction system either to achieve huge profits (by taking advantage of the low price of selling dollars by the Central Bank of Iraq), Or to launder illegal money (resulting from smuggling, embezzlement of public property or commissions), or to send money to both Iran and Syria. The result is that these factions are now relying heavily on the regime to recycle their income. However, there is a problem with the new US restrictions towards the monetary system in Iraq represented in the fact that they affect individuals and importers, as well as financial institutions linked to the factions without any kind of exception or discrimination. However, the armed factions have huge sums of money at stake, and pressure from the New York Federal Reserve could incentivize them to "clean up".
And while the United States is likely to ease its financial policy towards Iraq, it is not possible for it to accept the return of the previous situation to what it was. The electronic financial system will be implemented gradually, and factions linked to Iran will have to deal with it as a fait accompli. By using disguised sanctions against pro-Iranian elements, supporting the approach of the Iraqi prime minister and his successor, the Dawa Party, and exerting direct pressure on Tehran, this new US policy may bear fruit. In any case, this crisis shows that all pressure cards are in the hands of the United States, such as the dollar weapon, as well as its ability to collect and extract data, in light of the fact that the information infrastructure of the main Iraqi ministries and institutions is entirely American industry, and the American military aid to Iraq, and the sanctions weapon, Perhaps resorting, as a last resort, to targeted strikes targeting militia leaders and their facilities.
In the meantime, the Iranian position has been greatly weakened due to the continuation of the protest movement in the country and the high rates of inflation (one of the motives for smuggling dollars from Iraq to Iran is to pump dollars into the market for the purpose of slowing down the decline in the value of the Iranian riyal and the resulting inflation and financing the budget deficit); And the continuation of drone attacks (by Israel and with the approval of Washington) on strategic facilities in Iran. In light of this state of weakness, the Iranian regime now needs to rely on an Iraqi government backed by Washington. Therefore, Iran is likely to exercise its hegemony over Iraqi factions and militias, and limit these factions' obstruction of the Iraqi government's efforts to implement policies to adhere to the new monetary systems.
At the local level in Iraq, there are fears of a slowdown in commercial activity, and a delay in approving the 2023 budget (which was supposed to be approved at the end of January, and to be approved within two months after that). The worsening economic crisis may also lead to social unrest, especially before the month of Ramadan, which will begin at the beginning of the last third of March, and thus the possibility of re-igniting the protest movement in the country. Moreover, the Sadrist movement may find itself increasingly besieged and excluded from informal decision-making positions and financial resources, and thus may threaten to organize mass demonstrations and possibly resort to street clashes.
conclusions
Today, Iraq has come to the conclusion that it is necessary to get rid of the dominance of the informal sector and abandon the cash-based economic model, and move towards an organized banking sector that would make way for the growth of the private sector. The commitment of Iraqi Prime Minister Muhammad Shia al-Sudani to make his rule an opportunity to launch major development projects sends two somewhat contradictory messages. He appears to be sending a message to the factions that he will not attempt to change the status quo, while at the same time encouraging them to transcend political and factional differences to focus on the economy. However, it is clear that the aspirations of economic development require adherence to international standards, transparency and the fight against corruption, standards that the dominant factions currently see as weakening them organizationally, socially and politically. After it became a wealthy class that relied for an important part of its income on the dollar auction system, these same factions created a weapon that Washington can now use against it.
An American diplomat indicates the advantages of Fouad Hussein's visit to Washington and does not rule out the appearance of the Sudanese in the White House
The former US ambassador to Iraq, Douglas Silliman, indicated, on Saturday, a number of positive issues that resulted from the Iraqi Foreign Minister Fouad Hussein's visit to Washington, suggesting that an invitation from the White House be sent to Prime Minister Muhammad Shia'a Al-Sudani to visit the United States of America.
Suleiman is the president of the Arab Gulf States Institute in Washington and served as US ambassador to Iraq from September 2016 to 2018.
In his article, Silliman said, “Fuad Hussein, Iraq’s deputy prime minister and foreign minister, visited Washington February 9-15. As the first high-level representative of the new Iraqi prime minister, Muhammad al-Sudani, Hussein came to the United States seeking to broaden and deepen "Financial and economic relations" with the United States, stating that his focus on economic issues - not security - shows that US-Iraqi relations were "healthy" and had reached a new stage.
In addition to more pressure, a letter dated February 2 from the new chairman of the US House of Representatives Foreign Affairs Committee on Baghdad's relations with the Kurdistan Regional Government, and another letter dated February 10 from three other members of Congress, accused the Sudanese government of siding with the regime. Iranian complicity with money laundering operations carried out by the Iranian Revolutionary Guard in Iraq, and discrimination against Iraqi Kurds; The two letters showed that many figures in Washington remain focused on the negative — or at least the politically charged — aspects of relations with Iraq. From the Iraqi point of view, Hussein arrived in the wake of the currency crisis and the sharp decline in the value of the Iraqi dinar as a result of the application by the Central Bank of Iraq of the new controls imposed by the US Treasury on the exchange of dollars in the Iraqi market.
Silliman continued, "Hussein's choice to go to Washington was a wise choice due to his decades of political experience and friendship with high-ranking US officials in four US administrations. During his week-long visit, Hussein met with Secretary of State Anthony Blinken, and envoy John Kerry, USAID Administrator Samantha Power, Deputy Secretary of the Treasury Wally Ademo, and other administration officials.Hussein, with Blinken, chaired the Cabinet-level High Coordination Committee for the US-Iraq Strategic Framework Agreement, which National Security Adviser Jake Sullivan also attended.Hussain has attended meetings in Congress, spoken to US business representatives, addressed think tanks, and appeared in US and international media.
And he added, "To refute Washington's powerful narrative about the Sudanese government's complicity in expanding Iranian influence in Iraq, Hussein pointed to the prime minister's actions that contradict Iranian goals in Iraq, especially his public statement in January about his support for the continued presence of US military forces in Iraq." ".
He explained, "Hussein came to Washington for several specific goals. First, he wanted to avoid imposing US sanctions on Iraq because of its dollar market, trade with Iran, importing natural gas and electricity from it, and business dealings with Russia. With regard to Iran, he achieved some success under the pretext that Iraq Need to obtain US dollars to carry out legitimate international trade, and that Iraq depends on Iran for more than 40% of its electricity production.US sanctions may cut off Iranian gas and electricity supplies, which could have catastrophic effects on Iraq and the region.At the time Himself, other members of his entourage worked with US Treasury and Federal Reserve officials to craft the technical details by which the CBI would monitor the final destination of US dollar deals in Iraq to bolster confidence in reducing US dollars reaching Iran.The strongly worded paragraph on currency markets in the HCC joint statement showed success in getting some flexibility from Washington, but also made it clear that the US expects a lot from Iraqi action.
Likewise, the delegation argued that Russia is an important part of the Iraqi economy, so Washington should ease restrictions on deals with Russia. For example, Russian oil giant Rosneft bought a 60 percent stake in an oil export pipeline. The main pipeline in Iraqi Kurdistan in 2017, and in 2018 committed to financing the gas pipeline in the Kurdistan Region.However, it seems that Washington did not find the arguments for the need to show flexibility in deals with Russia convincing. The former US ambassador pointed out that "Hussein sought to obtain more investments from the US government and the private sector in order to acquire the large amount of gas that is burning in Iraq, and therefore, it is wasted. Hussein argued that Iraq spends $4 billion every year to import natural gas and electricity from Iran, and wants the support of the US government and the private sector to replace those imports, and use the money that is saved to provide services to the Iraqis. Some members of the entourage expressed their willingness to re-examine past gas acquisition deals that had faced political opposition or had disappeared within the Iraqi bureaucracy. The joint statement showed the US government's strong support for the continued development of Iraq's energy sector.
“Behind the scenes,” he said, “Hussein and his entourage sought to diminish the concerns of the administration and Congress that al-Sudani was the result of Iranian support. They argued that political support for the prime minister comes not only from pro-Iranian political parties, but also from the two main Kurdish parties, the Sunni parties, and the Christians.” In addition to Sudani's stated support for US forces, the Iraqi delegation pointed to Sudani's early policy focus on providing services to the Iraqis and taking steps to confront corruption. Washington, and argued that this matter would help the prime minister pursue policies such as economic and administrative reform that do not enjoy the support of pro-Iranian parties and militias.From the viewpoint of a high-ranking and trusted Iraqi Kurdish official, these arguments were not only a point of response to fears of Iranian hegemony and its militias in Baghdad, but also a tangible step Washington could take to bolster the prime minister's position against potential pro-Iranian rivals.
He pointed out, "Hussein's greatest achievement is simply putting Iraq back on the foreign policy map in a positive way. It appears that the senior US officials involved in the Supreme Coordination Committee, and the intense public debates that Hussein conducted on Iraq, have persuaded many in the US administration to review how to make progress on the objectives of The long-standing US policy of a prosperous, democratic and sovereign Iraq, following his visit, will need Baghdad and Washington to take concrete steps to build confidence.”On the Iraqi side, Baghdad must faithfully implement its commitments on the dollar market. To broaden the agenda beyond financial flow, Baghdad should consider repeating more trips to Washington by cabinet-level officials, particularly those with economic portfolios. It would be wise for Baghdad to select cabinet officials capable of convincingly arguing that Iraq is committed not only to signing a memorandum of understanding with the private sector, but also to doing business, perhaps with the full implementation of a number of test cases for notable businesses. Finally, tangible progress in addressing issues facing Iraqi minorities—particularly Iraqi Kurds, Yazidis, and Christians—could garner greater political support from Washington.
"While Washington remains skeptical, it should consider reciprocal visits by senior US officials, and call for more discussions of Baghdad's economic agenda, particularly with regard to gas acquisitions and climate issues," said the head of the Arab Gulf States Institute in Washington. If Washington feels sufficient commitment from the Sudanese and his government to the agenda set by the foreign minister, it would not be out of the question to invite the prime minister to visit Washington.
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An economist explains about replacing the dollar with the yuan in dealing with China
Economic expert Abd al-Rahman al-Mashhadani explained, on Saturday, the process of trade exchange with China in yuan instead of the US dollar, while stressing that the process will be under the supervision of the Singapore Development Bank and the American J Morken Bank.
Al-Mashhadani said in an interview with Al-Maalouma agency, "The decision came to facilitate the process of transferring money to China to finance trade and reduce auditing procedures," noting that "the Chinese yuan is considered one of the global currencies that can be relied upon in all countries of the world."
He continued, "The decision is part of the options to diversify the financing of Iraqi trade with the major countries of the world," noting that "the mechanism will be in two ways, the first is: making part of the oil export money block to Iraq in Chinese yuan, on the basis of which commercial transactions will be settled, and the second It is: they give dollars to these banks in order to obtain Chinese yuan for trade financing purposes.”
And he added, "The purchase process for Iraqi merchants will be by buying dollars from the electronic platform, and the money is transferred to China in yuan to finance import purposes," noting that "Iraq's problem with regard to the dollar is the merchants' lack of commitment to the official transfer process through the electronic platform so far."
And the Central Bank of Iraq had announced earlier about the second package of facilities to obtain foreign currency, including reliance on the yuan currency to organize the financing of foreign trade from China
Deputy: America is going through a state of weakness, and Iraq should invest that economically
On Saturday, the representative of the Al-Fateh Alliance, Ali Al-Jamali, accused America of trying to thwart all contracts that are not concluded with it, while stressing that the American role has reached a stage of weakness in the Middle East in general and Iraq in particular.
Al-Jamali said in an interview with Al-Maalouma agency that "the American role has reached a stage of weakness in the Middle East in general, and Iraq in particular," pointing out that "we are counting on the capabilities of Siemens in cooperation with available Iraqi expertise to find a real solution to end the electricity and energy crisis in Iraq." .
He continued, "The electricity crisis in Iraq is not limited to the establishment of production stations only, but rather Iraq needs to develop dilapidated transmission lines in view of the studies of specialists," noting that "the current time is an opportunity to exploit America's weakness in declaring a gradual separation from America."
And he added, "The government must take a position to impose the interest of the Iraqi people before America imposes its interest on Iraq, especially with regard to the energy and electricity file," noting that "Washington considers the electricity file to be one of the political files that, if obtained, will return the country to its normal role."
And the former deputy of the State of Law coalition, Wael Abdel Latif, had spoken earlier to Al-Maalouma agency, that “America will not allow the German company Siemens to work inside Iraq without its prior approval, while he confirmed that Washington considers itself a guardian of Iraq since 2003 until now.”
Renewed targeting of international coalition convoys in Iraq
An RT reporter in Iraq reported, on Sunday, that a convoy of the International Coalition was targeted by explosive devices in the south of the country.
Our correspondent stated that a convoy of the International Coalition was targeted with two explosive devices in Diwaniyah Governorate, southern Iraq.
He added that the targeting did not result in any casualties.
It is noteworthy that the operations targeting the convoys of the international coalition in Iraq stopped during the past months, but they returned recently with the return of the political file in the country.
Vietnam becomes a new destination for foreign companies
Sunday 2/26
Learn about the conditions of America on the Sudanese before his visit to Washington
Well-informed American sources revealed that the visit of Iraqi Prime Minister Muhammad Shia al-Sudani to Washington has become hostage to providing evidence and evidence of progress in combating money smuggling to Iran, commitment to the government program, especially in terms of getting rid of dependence on Iranian energy sources, and compliance with the sanctions imposed on Russia.
During his presence in Washington in the second week of February, Iraqi Foreign Minister Fouad Hussein discussed the restrictions imposed by the Federal Reserve on dollar transfers to Iraq, and offered to receive Al-Sudani to discuss the details of plans related to stopping money smuggling operations carried out by banks affiliated with the "Coordination Framework" militia. .
US officials met the offer with reservations, and said that the invitation will be extended to the Iraqi prime minister when the US administration is certain that Al-Sudani is carrying out his commitments, that he is not subject to the authority of pro-Iranian groups that support his government, and that he needs to act in accordance with the declared political agenda.
Hussein heard assurances from US officials stating that Al-Sudani's declaration of his desire for the US forces to remain in Iraq was beneficial, but not sufficient, especially since the presence of these forces serves the security interests of Iraq and does not serve the interests of the United States alone.
Douglas Silliman, the former US ambassador to Iraq and director of the Arab Gulf States Institute in Washington, said, "Although Hussein's visit was planned for a long time, it was his misfortune that he had to deal with senior officials from President Joe Biden's administration at a time when they were still focused." On the Russian invasion of Ukraine, the downing of the Chinese spy balloon, and the fears that Iran and Russia will use the Iraqi banking system to circumvent US sanctions and obtain dollars.
Silliman indicated that the new chairman of the Foreign Affairs Committee in the US House of Representatives, Michael McCaul, sent a letter on the tenth of February to the White House accusing the Sudanese government of “biasing the Iranian regime, complicity with money laundering operations carried out by the Iranian Revolutionary Guards in Iraq, and discrimination against the Kurds.” ".
This atmosphere put Hussein in a difficult position in terms of defending Al-Sudani, and he was unable to remove doubts about the prime minister's true loyalties. Hussein was informed that unless Al-Sudani provides evidence on the ground that he is working to combat money smuggling, and that he does not practice dual policies, the White House will not be ready to receive him.
Although Hussein failed to convince the US administration to receive Al-Sudani, he succeeded in easing the pressure imposed on the Central Bank of Iraq, especially after he said that these pressures could push Iran to cut off the gas supply, which provides about 40 percent of Iraq's need for electricity, in addition to Many other economic consequences related to import financing.
The former US ambassador believes that the Iraqi foreign minister came to Washington "to avoid imposing US sanctions on Iraq because of the dollar market in it, trade with Iran, importing natural gas and electricity from it, and business dealings with Russia."
This indicates that the continuation of the smuggling of dollars to Iran is about to put the Sudanese government on the brink of an abyss, had Hussein not rushed to save the situation, but he did so in exchange for guarantees confirming Al-Sudani's keenness to actually combat smuggling, and gradually reduce trade rates with Iran. , and to comply with the restrictions imposed on Russia, even though it has important oil projects in Iraq. Including that the Russian oil giant Rosneft has owned a 60 percent stake in the main oil export pipeline in Iraqi Kurdistan since 2017, and it also committed in 2018 to financing the gas pipeline in the Kurdistan region, which are projects prior to the Russian invasion of Ukraine.
Hussein's defenses of al-Sudani included saying that his government is not entirely affiliated with the coordination framework and that it is supported by the Sunni coalition and the Kurdish parties, and that these two parties have influence that cannot be ignored.
Observers say that the foreign minister's defenses of the prime minister to avoid sanctions and ease pressure on dollar transfers succeeded, but not without a price, which is that it turned into political restrictions that justify imposing more control over the government's actions.
In order to prove the seriousness that may provide justifications for inviting the Sudanese to visit Washington, the Central Bank of Iraq has begun efforts to impose its own control over the dollar market, so the Governor of the Central Bank of Iraq, Ali Al-Alaq, held a meeting in which a number of leaders of the security services and owners of exchange companies and brokers in buying and selling foreign currency participated. During which he informed them that “in light of the directives of the Commander-in-Chief of the Armed Forces, the Central Bank is the only entity responsible for monitoring and inspecting banks, exchange companies and non-bank financial institutions licensed by the Central Bank. And that, with the aim of preventing the exit of cash across the borders and ports, which exceed what is specified in the instructions of the Central Bank at ten thousand dollars, the competent security authorities will follow up and inspect vehicles on the roads and paths leading to the borders to prevent smuggling and take legal measures in coordination with the Central Bank, while providing the bank with the amounts of papers Discovered coins and their serial numbers.
The bank also demanded that “the sums sent from banks and companies to their branches be accompanied by documents from the sending party showing the details of the sender and the recipient, and to be submitted at external control points when requested, and in the event of a suspicion or need for confirmation, contact is made with the Banking Control Department in the Central Bank . ”
Observers say that following up on the implementation of commitments is now under the consideration of the US embassy in Baghdad. Among the most prominent indications of this was that the US Ambassador to Baghdad, Alina Romanowski, held a meeting in Erbil with Minister Hussein to discuss the results of his visit to Washington, where the two parties agreed “on the need to create a joint mechanism to follow up on the desired results of the Iraqi delegation’s visit to Washington.”
Adviser to the Prime Minister: There are no preconditions for Al-Sudani's visit to Washington (Tweet)
Sudanese advisor: America's relationship with Iraq is not governed by conditions
The media advisor to Prime Minister Hisham Al-Rikabi confirmed today, Sunday, that America's relationship with Iraq is not governed by conditions or controls.
Al-Rikabi said in a tweet, followed by Mawazine News, "America's relationship with Iraq is not governed by conditions or controls, and the ruler in it is mutual interests."
And he added, "Talk about the existence of preconditions for the Prime Minister's visit to Washington is just an attempt to distract public opinion from the diplomatic efforts being made by the National Service Government at various levels."
Al-Sudani's office issues a notice
Today, Sunday, the office of Prime Minister Mohamed Shia Al-Sudani warned against circulating untrue news aimed at confusion and confusion.
Al-Sudani's office stated in a statement received by "Baghdad Today", that "we call upon all media outlets to exercise accuracy in the presence of those who claim to represent the Prime Minister's office and who transmit untrue news aimed at confusion and confusion, and we stress the need to deal only with well-known official media platforms."
The media advisor to the Prime Minister, Hisham Al-Rikabi, had denied, earlier today, Sunday, the talk about the existence of preconditions for the visit of Prime Minister Muhammad Shia Al-Sudani to the US capital, Washington.
Al-Rikabi said in a statement, "The talk about the existence of preconditions for the visit of Prime Minister Muhammad Shia'a al-Sudani to Washington is just an attempt to distract public opinion about the diplomatic efforts made by the national service government at various levels."
Economists call for the elimination of dollarization of the Iraqi economy
Iraqi economists called on state officials to eliminate dollarization in the economy, in order to meet the growing demand for the dollar currency.
And the Central Bank of Iraq launched a series of measures to counter the rise in the exchange rate of the dollar against the dinar, including the settlement of private sector trade between Iraq and China, in the yuan currency through the American JPMorgan Bank.
The economist, Mahmoud Dagher, told Al-Iqtisad News that businessmen and importers have begun to increase their numbers to go to banks to obtain dollars to cover imports, and this is a very important step that will contribute to reducing the demand for dollars in the parallel market.
He added that selling goods in foreign currencies inside the Iraqi market increases demand, and this is called dollarization, a procedure that shakes the citizen's confidence in his currency.
On the other hand, economist Aqil al-Ansari told Al-Iqtisad News that the state must control dollarization by preventing the sale of goods in the local market in dollars or any other currency except for the Iraqi dinar.
He stressed that this matter will lead to reducing the demand for the dollar, and therefore the dollar will go to the main needs to cover Iraq's imports of goods, indicating that the last consumer must pay in the dinar currency, while the main importer is the one who buys the dollar from the banks.
He pointed out that what is happening now is the organization of foreign trade for Iraq, which is a very important measure for the Iraqi economy and ends the chaos that was taking place.
The Minister of Finance chairs a meeting to implement the draft system for modernizing financial management systems
The Ministry of Finance announced, today, Sunday, that the IFMIS modernization system project will provide 5 positive features, while it indicated that among these features is improving control over accounts and not exceeding appropriations in the budget.
A statement by the ministry, received by the Iraqi News Agency (INA), stated that "Minister of Finance, Taif Sami Muhammad, chaired the coordination meeting with the steering committee to implement the IFMIS modernization system project."
The statement added, "The meeting was attended by the representative of the World Bank, Salam Maarouf, and the representative of the AARC consulting company, which is responsible for preparing bidding documents to purchase the requirements of the system, in the presence of the directors of the budget, accounting, legal, administrative, and information technology departments in the ministry."
He pointed out, "During the meeting, a presentation was heard by the consulting company regarding the preliminary selection document to be published with the aim of attracting discreet companies to implement the system project, which in turn will contribute to increasing the speed of electronic communication of the Ministry of Finance with the rest of the ministries and institutions, and improving the process of monitoring accounts." and not to exceed the financial appropriations established in the budget.
He continued, "The new system also provides a safe and integrated information environment for financial management operations in a way that allows safe transmission of information between ministries and government departments, and secures an integrated environment in which information is available in a timely and accurate manner to all concerned parties regardless of their geographical locations."
Finance: IFMIS will contribute to improving control over the accounts and not exceeding the appropriations in the budget
link
The Ministry of Finance announced, on Sunday, that
the IFMIS modernization system project will provide several advantages, including improving control over accounts
and not exceeding appropriations in the budget.
And a statement by the ministry, received by Mawazine
News, stated that “Minister of Finance, Taif Sami Muhammad, chaired the coordination meeting with the
steering committee to implement the IFMIS modernization system project.”
The statement indicated, “The meeting
was attended by the representative of the World Bank, Salam Maarouf, and the representative of the AARC consulting company, which is responsible
for preparing bid documents to purchase the requirements of the system, in the presence of the directors of the budget,
accounting, legal, administrative, and information technology departments in the ministry.”
He added, “During the meeting,
a presentation was heard by the consulting company regarding the preliminary selection document
to be published with the aim of attracting discreet companies to implement the system project, which in turn will contribute to
increasing the speed of electronic communication of the Ministry of Finance with other ministries and institutions, and improving
the process of monitoring financial accounts.” And not to exceed the financial appropriations established
in the budget.
He continued, “The new system also provides
a safe and integrated information environment for financial management operations in a way that allows for a safe transmission
of information between ministries and government departments, and secures an integrated environment in which
information is available in a timely and accurate manner to all concerned parties regardless of their geographical locations.”
The Central Bank and the Arab Monetary Fund are discussing indicators of financial inclusion in Iraq
His Excellency the Governor of the Central Bank of Iraq, Ali Mohsen Ismail, received the Director General of the Arab Monetary Fund, Dr. Abdul Rahman Al-Hamidi.
His Excellency the Governor said in his speech: The Arab Monetary Fund has provided unremitting efforts in support, advice and training to the Central Bank of Iraq and its cadres, in implementing field surveys related to indicators of financial inclusion in Iraq.
For his part, Dr. Al-Hamidi praised the role of the Central Bank of Iraq in consolidating the work of the fund, and supporting its policies and programs, while expressing the fund's readiness to provide technical support and capacity-building in areas related to the bank's work, praising the role of the Central Bank of Iraq in launching the payments platform (Bunu) in the field of Coverage of payments for intra-trade using various types of currencies.
It is noteworthy that the Central Bank of Iraq is an active member of the Arab Monetary Fund, and is considered one of the largest shareholders among central banks and financial institutions, and invests part of its foreign reserves with it.
From the CBI website and they tweeted it too
The outcomes of the meeting between the Governor of the Central Bank and the Director of the Arab Monetary Fund
The Governor of the Central Bank of Iraq meets the Director General of the Arab Monetary Fund
His Excellency the Governor of the Central Bank of Iraq, Mr. Ali Mohsen Ismail, received the Director General of the Arab Monetary Fund, Dr. Abdul Rahman Al-Hamidi.
His Excellency the Governor said in his speech: The Arab Monetary Fund has provided unremitting efforts in support, advice and training to the Central Bank of Iraq and its cadres, in implementing field surveys related to indicators of financial inclusion in Iraq.
For his part, Dr. Al-Hamidi praised the role of the Central Bank of Iraq in consolidating the work of the fund, and supporting its policies and programs, while expressing the fund's readiness to provide technical support and capacity-building in areas related to the bank's work, praising the role of the Central Bank of Iraq in launching the payments platform (Bunu) in the field of Coverage of payments for intra-trade using various types of currencies.
It is noteworthy that the Central Bank of Iraq is an active member of the Arab Monetary Fund, and is considered one of the largest shareholders among central banks and financial institutions, and invests part of its foreign reserves with it.
Central Bank of Iraq
Media Office
26/2/2023
Is Saudi Arabia preparing for the collapse of the petrodollar and US dollar dominance?
![A foreign currency dealer counts US dollars at a money exchange company in Karachi, Pakistan, 20 May 2022. [Yousuf Khan - Anadolu Agency]](https://i0.wp.com/www.middleeastmonitor.com/wp-content/uploads/2022/05/AA-20220520-27926764-27926757-DOLLAR_HITS_ALL_TIME_HIGH_AGAINST_PAKISTANI_RUPEE.jpg?resize=1200%2C800&quality=85&strip=all&zoom=1&ssl=1)
One of the most illusory phenomena in our current existence is the money we use for buying, selling and hoarding on a daily basis. It is, to put it simply, in the air, backed up by nothing and reliant on nothing, yet at the same time highly delicate and sensitive to geopolitical and monetary shifts.
The currencies we all use are reliant on the strength and performance of the US dollar, and that dollar is backed up by debt and the global trust in itself and its delicate monetary system. There was a time, half a decade ago, when the dollar and other prominent currencies were backed by gold, that secure and stable asset largely immune to the wild swings and falls of today's debt-based system.
That was until US President Richard Nixon took the dollar off that gold standard in 1971, in a pivotal and momentous move which both secured America's supremacy in the global economy – at least until now – and deemed Washington and the subsequent monetary system to a future of inevitable crashes, and many say an eventual collapse.
Since then, especially in this digital age, fiat money consists of little more than digits on a screen, based on a system of automated calculations and manual interventions. Businesses procure money and employees are paid it, yes. Consumers spend it and it is essential to survival and attaining basic necessities, true. Yet the fact remains that at any time, the amount can be seized, altered, or removed from an account with little immediate impact on an economy, as it is not backed by any material or tangible assets subject to limitations.
We deal with mere numbers on a screen, which a bank can quite literally edit at will. With physical cash, this is not entirely the case, but even that is subject to that reality. As our world becomes ever more digitalised and less reliant on cash, this will only grow. As the Wolf of Wall Street popularised, our current monetary system, along with its markets and stocks, are simply "fugazy".
A major part of that system and America's hegemony over it, of course, has been the 'petrodollar' – the payment of US dollars for the trade and sale of oil globally from Saudi Arabia and other member states in the Organisation of the Petroleum Exporting Countries (OPEC) – following the deal struck between Washington and Riyadh in 1974, coincidentally a mere three years after Nixon took the dollar off the gold standard.
That deal not only secured military defence of the kingdom through guarantees by the US, but also secured a stable stream of foreign purchase of US Treasury bonds and debt – a strategy of recycling the petrodollars back unto Washington – through the Gulf state's reserves. Like any good business, that stable stream successfully resulted in many more streams of reserves, powered by the subsequent rolling success of the dollar and the increase of global trust in its stability. It was one of the machine's most essential components.
So when it was revealed last year that Saudi Arabia is considering trading its oil with China in the yuan, it was no small matter or minor shift. Many analysts at the time – largely pro-Western – played it down as merely a symbolic gesture, a tactic to pressure the US or send a political message. Almost a year on, however, the kingdom seems to be serious in those potential intents. At Davos in January, Finance Minister Mohammed al-Jadaan revealed Riyadh's willingness to trade in not just the yuan, but also a variety of other currencies.
Saudi Arabia has not been the only country, as other considerable US allies such as India, Pakistan, and UAE have also struck deals with Russia or China to pay for oil or other commodities in their various respective local currencies. Iraq was the latest to distance itself from dollar dominance, announcing this month that it plans to regulate foreign trade from China directly in yuan.
Those states' decisions – predicted soon to be joined by many more – have represented a huge shift towards a more decentralised global monetary system away from the dollar, primarily due to a major miscalculation by Washington in its hard-hitting sanctions against Russia at the outset of Moscow's invasion of Ukraine.
Without defending the Kremlin and its so-called 'special military operation', and without condemning sanctions which do have their uses as a non-physical measure and financial pressure, the US seems to have scored a devastating self-goal against its currency when it cut Russia off from the SWIFT payment system and froze over $350 billion of its gold and foreign exchange reserves. That act alone massively reduced trust in the dollar-based monetary system amongst many countries, especially those in the Global South which have long been sceptical of US hegemony, causing them to further question the viability and risk of holding their reserves in the mighty dollar.
That is exactly why the Ukraine war is such a pivotal issue – it is a gamble the US is willing to take to re-secure the dollar's fortunes, having the potential to restore trust in it as a stable currency worthy of remaining the dominant global reserve exchange. That is if Ukraine wins and lands a Russian defeat. If Kyiv loses and Moscow scores a victory, though, it would spell a further disaster for the dollar. There lies one of the primary reasons why so much is reliant on the results of the war in Ukraine.
In that equation, Saudi Arabia does not intend to rely on the outcome of the war to determine its foreign and economic policies. It insists on maintaining excellent relations with the US while at the same time expanding its ties with Russia, China, and other powers to the east. it will continue to trade largely in dollars in the foreseeable future, but will at the same time be open to accepting other currencies even if that comes at the apparent expense of American hegemony and represents a breach of the petrodollar agreement with Washington all those decades ago.
The kingdom's interest in joining BRICS – the economic bloc consisting of Brazil, Russia, India, China, and South Africa – is part of that policy outlook, along with Iran's, Turkiye's, Algeria's and Egypt's who also aim to join the bloc. Rather than an exclusive club for the developing world's fastest-growing economies, they view BRICS as an opportunity for countries in the Global South to band together to either match the dominance of the US dollar or secure a place in the attempt to do so.
Due to discuss the expansion of the bloc this year, BRICS is soon to decide on the potential membership of those nations. If Saudi Arabia is accepted and joins it, it would be hailed as a momentous blow to the dollar and the end of petrodollar recycling, as the kingdom would then be more economically interconnected with the likes of China and India in particular.
Already, analysts and economists are speculating on potential of countries selling their US dollar reserves, particularly the effects of a mass dump by some of the most prominent holders. China, for instance, is the largest at $3.184 trillion in reserves, while India's numbers $573.7 billion and Saudi Arabia's $457.66 billion. If they were to sell or drop even a fraction of their reserves, especially in a coordinated effort, it would severely dent the US dollar's strength and reputation even further.
This is not certainly not the first time the American currency's dominance has been threatened, nor is it the first time total global dollar reserves held by central banks have dropped significantly, as they have been declining for the past two decades or so and were at some of the lowest levels even prior to the Ukraine war.
Now it is different, however, and there has never been a threat to the dollar's supremacy as significant as this. There is a good reason central banks throughout the world last year bought the most gold on record since 1950, in an effort to combat rising inflation and financial instability. They know best the fragility of our precarious monetary system, as they aim to stabilise themselves with the asset that would forever remain valuable.
Whether the counter to the US dollar will be the yuan, a BRICS currency, or some other gold or asset-backed currency in the future, Saudi Arabia sees that the current global reserve may be on the decline for good. The kingdom is preparing to diversify its reserves and trade practices for whatever may lay ahead.
The Rise of BRICS: The economic giant that is taking on the West
Parliamentary Legal: The government's measures are useless in stabilizing the exchange rate
The Parliamentary Legal Committee stated that the government's measures have not yet succeeded in stabilizing the exchange rate of the dinar against the dollar and curbing prices in the markets.
Meanwhile, an economist criticized the multiplicity of random exchanges that led to different exchange rates and speculation.
A member of the Legal Committee, Raed Al-Maliki, told Al-Sabah: The government's measures have not yet succeeded in stabilizing the dollar's exchange rate, despite setting the official price at 1130 dinars to the dollar, as the exchange rate still exceeds 150,000 dinars for every 100 dollars. He added that the prices of goods and services are still very high, and they exceed the prices that were when the dollar exchange rate was 1146 dinars per dollar, as we view this matter as a criterion for the soundness and effectiveness of the government's measures. He pointed out that the committee will not wait long on this matter, as the government bears the difference in the price of the dollar between the official and parallel sale in the market. Al-Maliki pointed out that the measures to arrest a person or speculator in the market will not suffice, because the country's foreign trade is large and depends on the dollar, so these steps so far are not sufficient or convincing.
For his part, the economist, Saleh Al-Hamashi, said: The problem of the currency market lies in the monetary policy followed by the Central Bank and the window for selling the currency, in addition to the absence of real and organized stock exchanges within the country, including Al-Kifah, Al-Harithiya, New Baghdad, Al-Kadhimiya and Al-Shorja.
Specialists: The price of one hundred dollars will settle at 135 thousand dinars
Specialists in economic affairs focused on the need for government agencies to take measures to limit the effects of the parallel market for selling foreign currency, stressing that this matter is a continuation of the steps taken with the aim of stopping the "climbing of the dollar", whose exchange rates touched the limits of 153 thousand dinars per 100 dollars. That the exchange rate stabilize within three weeks, at the price of 135 thousand dinars for every 100 dollars in the parallel markets.
The economist, Dr. Abd al-Rahman al-Mashhadani, believes during his interview with "Al-Sabah" that the success of the government and the central bank in stabilizing the exchange rate is mainly related to window sales of dollars. If it stabilizes above the rate of $50 million, the parallel exchange rates will be close to the official rate. , It is expected that the exchange rate will stabilize within three weeks, at a price of 135 thousand dinars per 100 dollars.
Al-Mashhadani pointed out that the price difference witnessed by the parallel markets will prompt small traders to regularly through the official window to sell the currency in order to obtain remittances, as the difference in selling dollars in exchanges and markets is high for merchants, in addition to other financial costs that accompany remittances.
Al-Mashhadani favored the continuation of the work of "speculators" and their endeavor to confuse the market, especially in light of the presence of a number of banks that have become outside the work of the single window, calling for taking appropriate measures to reduce this phenomenon, which is now greatly affecting the overall economic reality in the country.
He attributed the confusion in selling the currency to the ineffectiveness of monetary tools in Iraq, as the interest rate was not well invested, and the bonds offered are also ineffective, and even compulsory saving is not an appropriate option at the present time as a result of the problems arising due to a “living crisis” caused by poor The administration that accompanied the process of changing the previous exchange rate, which led to the citizen losing about 50% of his real income.
The expert, Al-Mashhadani, criticized the inactivity of banks and their failure to provide appropriate financial incentives that would enable them to attract the funds hoarded by citizens, which are estimated at about 77% of the total currency exported, pointing out that this matter requires real education and hard work by banks.
The reasons for the rise in the parallel exchange rate are not limited to the regulatory procedures of the Central Bank, as Dr. Adnan Bahia, a specialist in economic affairs, sees, during his interview with "Al-Sabah", that "Iraq is an importing country, and that the operations of supplying goods are carried out in dollars, and thus we see the merchant, whether he is a wholesaler or Single in Baghdad and the provinces, the dollar is the measure of profit and pricing, and when there are intense speculations, highs, lows, and fluctuations in dollar prices, the market cannot stabilize, and the seller cannot sell without knowing whether the prices will go down or up, and whether he will win or lose, which means confusion The market and the occurrence of severe price fluctuations directly affect the consumer.
Baheya urged the importance of providing sufficient cash liquidity from the dollar in order to cover the needs of ordinary citizens of foreign currency for the purposes of travel and treatment, suggesting in that, separating the outlets designated for commercial transfers and others, from the movement of ordinary citizens and what is related to their travel, treatment and their needs in dollars.
For her part, the Dean of the Faculty of Business Economics at Al-Nahrain University, Dr. Nagham Hussein, told Al-Sabah that the current rise in the price of the dollar is temporary as a result of banks' failure to comply with global compliance rules in transferring to beneficiaries, and that the temporary increases that occurred are caused by regulatory conditions in the conduct of procedures. External transfer requests submitted by local banks on foreign currency, as work was done a while ago on the electronic platform to link bank transfers with correspondents from international banks and the relevant compliance bodies at the same time.
Dr. Hussein pointed out that "the new procedures restricted the supply of foreign currency temporarily, which requires a simple adjustment period in order for private banks to practice international compliance rules in transferring in the interest of beneficiaries of foreign trade operations to the private sector, and this matter requires some time to reorganize requests and their consistency with global requirements." convertible"
The dollar exceeds 60,000 tomans, and the vice president shocked the Iranians with a statement
The price of the dollar exceeded 60,000 tomans today, Sunday, in continuation of the unprecedented decline in the Iranian local currency against international currencies.
It is noteworthy that the price of the dollar has witnessed a continuous rise since mid-February, and during this short period, the price of the dollar increased by more than 30 percent compared to the Iranian toman.
According to a report by Iran International, the price of the dollar has jumped by 118 percent compared to the Iranian toman since the beginning of this solar year (starting on March 21). In other words, the value of the toman has decreased compared to hard currencies by about half.
Vice President: That's what we have
The big jump in dollar prices comes at a time when the government and the central bank failed to restore stability to the currency market, and the Iranian Parliament held a closed session, yesterday, Saturday, in the presence of the First Vice President, the Minister of Economy, and the President of the Central Bank, and the Speaker of Parliament, Muhammad Baqer Qalibaf, confirmed Without addressing the results of the closed session: “We have come to a good conclusion regarding the currency market.”
In contrast to these statements, the representative of Tabriz in the Iranian parliament, Ali Reza Beki, revealed in an interview with the media that in the parliament session, yesterday, Saturday, Mohammad Mokhber, the first deputy of Ibrahim Raisi, clearly declared to the deputies that "we have no better solution." to manage the currency market. "That's all we have," he added.
Becky described Mukhber's statements as "totally irresponsible," and said, "Our conclusion from the meeting with the government's economic team is that there is no plan to get out of the current situation."
It is noteworthy that Muhammad Mokhber was responsible for the executive headquarters of the Imam's order, then he assumed the position of first vice president and leader of the government's economic team.
Heavy criticism mounted from fundamentalists
With regard to the currency situation, the representative of the Iranian guide in "Kayhan" newspaper referred, in his latest article, to "unbridled and increasing inflation," warning that this trend threatens the "life and stability" of the Iranian people, but considered that the reason for this situation is a "calculated and prepared conspiracy by before the enemies.
Hossein Shariatmadari said he believes that "a handful of people, with the explicit and covert support of external enemies, have disrupted the currency system with various tricks, and have taken the management of the country's currency out of the hands of the competent managers in the government."
Shariati did not mention a person's name and did not provide evidence for his allegations, but he called on the security, intelligence and judicial services to ignore "baseless considerations" and "determine the fate" of these people.
The statement of the representative of the guide in "Kayhan" newspaper comes by limiting the reason for the bad economic situation in Iran to the "disruption" of a few people in the foreign exchange market, while economic experts believe that the state of economic indicators is the result of much larger factors, including the type of government administration and the interaction of Every country with a global economy.
The representative of the guide in the "Kayhan" newspaper blamed what he called "external enemies" for this situation, while Abd Ali Rahimi Mozaffari, a member of the Parliament's Energy Committee, said in a closed session, yesterday, Saturday: "What the statistics show is that the country is not suffering From a currency problem in the current situation, the main problem is due to currency management."
He stated that "the situation of the foreign exchange market is like a patient whose condition is getting worse day by day, due to the intensity of anxiety," and declared that "the central bank announces that the management of the foreign exchange market is now out of its control."
Continuing the fundamentalists' criticism of the currency conditions in Iran in recent days, the director of Sirat News, a hard-line news site affiliated with the regime, warned in a video clip that "the train of Ibrahim Raisi's government is falling to the bottom of the valley" and asked his followers to fasten their seat belts.
In this video message, Ali Ghaffarian also said, commenting on the accelerating depreciation of the toman and other government decisions, that it is not clear what the government's plan is, "except that the country and the people are falling to the bottom of the valley."
Baghdad and Washington are discussing activating the joint committees regarding the Strategic Framework Agreement
Today, Sunday, the First Deputy Speaker of the House of Representatives, Mohsen Al-Mandalawi, discussed with the US Ambassador to Iraq, Alina Romanowsky, the activation of joint committees regarding the strategic framework agreement.
A statement from Al-Mandalawi's office, received by Al-Sumaria News, stated that the latter "received in his office today, the Ambassador of the United States of America to Iraq, Alina Romanowski, to discuss a number of political and economic files and issues of common interest between the two countries and related to the development of economic relations, especially the energy file, as well as cultural and educational cooperation." Between the two countries".
Al-Mandalawi stressed, "the importance of supporting the work of American companies operating in Iraq, as well as those wishing to obtain new investment opportunities," calling for "activating the work of joint committees within the strategic framework agreement, especially in the economic and financial fields, and continuing joint work in the interest of the two countries.
Al-Sudani and the Director of Arab Monetary discuss Iraq's involvement in the international financial system
Prime Minister, Mr. Mohamed Shia'a Al-Sudani receives the Director General of the Arab Monetary Fund
••••••••••
The Prime Minister, Mr. Mohamed Shiaa Al-Sudani, received today, Sunday, the Director General of the Arab Monetary Fund, Dr. Abdul Rahman Al-Hamidi.
During the meeting, they discussed mechanisms for joint cooperation in the field of supporting financial and banking policies and building human capacities, discussing Iraq's steps in joining the international financial system, and the most prominent measures and reforms that the government is taking in the field of the banking and financial sector, in a way that contributes to enhancing economic development in Iraq.
•••••
Media Office of the Prime Minister
26- February- 2023
Parliamentary Legal: The budget will be presented to Parliament next March
The Parliamentary Legal Committee suggested, today, Sunday, that the federal budget for the fiscal year 2023 will reach the House of Representatives next March.
The deputy head of the committee, Baqir Al-Saadi, told Al-Furat News that: "The budget for the year 2023 will be presented to the House of Representatives next March, and it will be explosive, as it will shed light on raising the livelihood of the Iraqi citizen."
He added, "The budget will include large strategic and service projects, some of which are included in the emergency food support law."
Al-Saadi added, "The infrastructure in all governorates will also be highlighted, and there is an intention to hold all negligent parties accountable in the file of services and reconstruction."
Monday 2/27/2023
The head of the Association of Private Banks is discussing with the Arab Monetary Fund the promotion of financial inclusion
The head of the Arab Monetary Fund, Abd al-Rahman al-Hamidi, visited the capital, Baghdad, and met with the Prime Minister, Muhammad Shia al-Sudani, the Governor of the Central Bank, Ali al-Alaq, and the head of the Iraqi Private Banks Association, Wadih al-Handal.
A statement issued by Al-Sudani's office said, "During the meeting, they discussed mechanisms for joint cooperation in the field of supporting financial and banking policies and building human capacities, and discussed Iraq's steps to engage in the international financial system, and the most prominent measures and reforms that the government is taking in the banking and financial sector, in a way that contributes to strengthening economic development in Iraq.
During Al-Hamidi's meeting with the President of the Association of Private Banks, Wadih Al-Handal, the two parties discussed the development of bilateral relations with regard to the banking sector, in addition to strengthening the concepts of financial inclusion.
Al-Hamidi said that Iraq occupies an important place in the Arab economy, and the Arab Monetary Fund is very interested in it, pointing to the indicators of the Iraqi economy growing well.
He added that Iraq continues to promote the concepts of financial inclusion, which reflects positively on the economy.
Kurdistan Bank: The Central Bank is making great efforts to develop Iraqi banks
The Managing Director of the Kurdistan International Islamic Bank for Investment and Development, Omar Hamadneh, confirmed that Iraq represents an important opportunity for the banking industry at the regional level, indicating that the Central Bank of Iraq is a pioneer in the development of the Iraqi banking sector, and is making efforts to put it in the ranks of discreet international banks.
Hamadna said in an interview with the "Iraqi Banks Magazine", that the Central Bank of Iraq, the Association of Iraqi Private Banks and the banks themselves have one concern: improving banking services for the Iraqi citizen, competing with neighboring countries and strengthening the economic sectors, and we are working hard for the Iraqi citizen to be a strategic partner with us in the coming years. financial inclusion operations.
The following is the text of the dialogue:
What is the strategic vision of the bank?
The strategic vision of the Bank of Kurdistan stems from the transformation of the bank from the local scope to the international one, because it is considered one of the leading banks in the Iraqi banking sector, as well as it is one of the leading banks in the field of Islamic banking, and it works on the Islamic banking industry and meets the requirements of customers in accordance with the principles of Islamic law. According to Islamic accounting standards.
The bank is subject to the existing international standards and requirements, as well as the instructions of the Central Bank of Iraq, including the requirements of institutional governance, and it determines the bank that has a management that conforms to the international standards stipulated, and therefore the Kurdistan Bank is one of the leading banks in applying the institutional government requirements.
The bank deals with Islamic products, as we do not deal with interest in giving and taking, but rather we deal with Islamic products in the sense of Murabaha. We adopt the initiatives of the Central Bank of Iraq that contribute to the recovery of the economic situation and the development of economic sectors, because these initiatives concern all sectors and groups of Iraqi society.
Kurdistan Bank attracts international expertise and competencies so that it can be mixed with human resources income in the Iraqi banking sector, as well as attracts external experts for the purposes of developing the banking system and international banking services such as documentary credits, because one of the bank's future plans is to deal with documentary credits according to international standards with distinguished specialized expertise.
This strategic theorist, located in Kerestan Bank, enables us to carry out strategic plans and moves in accordance with the competitive policy in the banking sector, whether spreading horizontally or vertically to provide services or spreading in branches and offices.
What is the size of the presence of the Bank of Kurdistan and its services in Iraq?
- The bank currently owns a capital of 400 billion dinars, and it is the highest bank in Iraq in terms of capital, and the volume of sound reserves and combined capital amounts to 630 billion dinars, and now the Bank of Kurdistan has an interest in dealing with the customer from the perspective of financial inclusion, and therefore we try to provide services that the citizen needs according to the current existing environment.
The bank currently consists of five branches and eight offices, and we have a plan to expand in the next year, including the opening of new branches, including a branch in Zakho, Dohuk Governorate, and we have a plan to spread in all governorates. To work on a policy of marketing salary settlement operations, because once we increase salary settlement operations, our ability to grant credit and reduce financial default will increase.
The bank is working to expand electronic banking services by increasing the number of automated teller machines spread in Iraq and Kurdistan, and we also plan to expand the operations of issuing visa and master card cards according to multiple advantages, which help the Iraqi citizen to keep up with international and global services during travel and international dealings, and today the bank plans to expand the spread more From 50 ATMs, and by the end of 2023, we will have more than 70 ATMs.
The bank has effectively started activating safety deposit boxes (safe custody) in the main branch in Duhok, a service that enables people and customers to rent the safe deposit box to put valuables in accordance with the security protection controls, and it is one of the advantages that the Iraqi citizen needs to get rid of home hoarding and insure his valuables. The bank also has the advantage that its offices are located in a number of malls, with full official hours on Fridays and Saturdays, as well as on public holidays.
How do you evaluate the procedures of the Central Bank of Iraq in the development of the banking sector?
The Central Bank of Iraq seeks strongly to promote the concept of financial inclusion for the Iraqi citizen, because the Iraqi citizen in his behavior and culture does not deal with banks at the required level, and this is due to the lack of culture and not the lack of trust because Iraqi banks have existed for decades and the Bank of Kurdistan has existed for more than 15 years, it is one of the sober and balanced banks.
The Central Bank of Iraq took a distinguished step by establishing a deposit guarantee company. This company gives reassurance to the citizen and changes his behavior. It is a guarantee party for the deposits that the citizen deposits in the bank. This is an important gateway to enhance customer confidence in the banking sector.
The Bank of Kurdistan has a distinguished relationship with the Central Bank of Iraq, especially since the bank plans in favor of private banks from a future perspective, such as demanding banking governance, information technology, and information security, which are all in favor of private banks.
The Central Bank is meticulous in its control, regulatory and audit plans, and it has a supervisory apparatus at an international level that meets international requirements, and it always pushes towards the development of private banks. And the Bank of Kurdistan, from the perspective of sustainability and social responsibility, accepts all the initiatives launched by the Central Bank of Iraq and tries to contribute to them in high proportions so that service can be provided to the Iraqi citizen and customer with all needs.
What are the plans of the Bank of Kurdistan in developing its services?
From the perspective of risk management, the bank works to diversify the services and products it provides and deals with all sectors in the strategic constructive move, and risk management invites us to deal with all sectors, but in varying proportions according to the environment in which the bank operates, and it often consists of the health, agricultural, economic and commercial aspects .
Focusing on one sector and neglecting the rest of the sectors will lead to an imbalance in the economic cycle that will be reflected in the sector adopted by the bank, as happened in the Corona pandemic, where the hotel and tourism sectors were greatly affected, and if the banks were focused on these two sectors, they would also be affected because the cash flows flourished in these sectors. Because of the effects of the Corona virus, and therefore it fails to comply with the requirements of banks, and it is among us that raises the level of risk.
Therefore, the Bank of Kurdistan adopts diversification mainly because this would reduce the risks that it may be exposed to in the investment portfolio, and the bank tends to build special investment portfolios that generate revenues on a regular basis annually, which enables the bank to face fixed expenses such as salaries, electricity wages, and others.
The bank carried out a strategic analysis of the banking environment and established a number of projects that help the bank achieve competitiveness in financial inclusion, so we updated service contracts for Visa and MasterCard cards, as our cards cost less and thus provide services in a competitive manner.
The bank participates in all conferences and seminars that contribute to promoting the dissemination of banking culture and financial inclusion, so we had participation in the Baghdad, Erbil and Sulaymaniyah conferences, and we have a specialized team to participate in conferences and explain the data and information that the customer needs about services from the sites of these conferences, in addition to the presence of our own sites on communication platforms We publish in it a lot of information that contributes to enhancing the banking culture and enhancing financial inclusion, because without financial inclusion, banks do not develop, and the higher the number of customers, the more the goal of the bank is achieved.
How do you evaluate the Iraqi banking market?
-Iraq has come a long way in the stage of financial inclusion, and the Central Bank has been alert to the process of financial inclusion for a long time, and it is presenting good plans and initiatives, and all private banks are currently working on it, and we hope in the coming years that the inclusion will be much higher because services are starting to start now because the years Previously, the number of ATMs and cards was very limited, and points of sale were not available in all governorates of Iraq. What we need is to change the behavior of the citizen, and it will be in two directions, as a depositor and as a borrower, so that trust is mutual between the citizen as a customer and the bank as a banking service provider.
Iraq is an opportunity for Iraqi and Arab banks, if viewed from an economic perspective, as it needs to restore the infrastructure, construction and redevelopment, and the Iraqi and international banking sector is a major participant in it.
The bank is trying to change the behavior of customers by providing distinguished services, whether electronic services or services within branches and offices, and enabling the customer to obtain withdrawals at any time he wants, whether from the branch hall or office halls spread in the governorates or through automatic teller machines, whether owned by the Bank of Kurdistan or owned by other banks.
The customer currently must realize that he can withdraw his money from the bank at any time he wants through multiple channels. In the past, there was only the bank hall for withdrawing money, which was restricted to official working hours and specific working hours, while now the balance is viewed and money withdrawn through the mobile bank service. .
Changing the culture of hoarding in Iraq must start with the young generation in universities and institutes by opening accounts for them and issuing bank cards and other services that expand financial inclusion and thus gradually change behavior in the future and turn hoarding into deposits in banks.
Parliamentary Committee: Efforts to stabilize the dollar exchange did not succeed, and commodity prices are very high
The Parliamentary Legal Committee said: "The government's measures have not succeeded so far in stabilizing the exchange rate of the dinar against the dollar and curbing prices in the markets."
Raed al-Maliki, a member of the Legal Committee, said, "The government's measures have not yet succeeded in stabilizing the exchange rate of the dollar, despite setting the official rate at 1,130 dinars to the dollar, as the exchange rate still exceeds 150,000 dinars for every 100 dollars."
He added, "The prices of goods and services are still very high, and they exceed the prices that were when the dollar exchange rate was 1146 dinars per dollar, as we view this matter as a criterion for the soundness and effectiveness of the government's measures."
Al-Maliki indicated, "The committee will not wait for long regarding this matter, as the government bears the difference in the price of the dollar between the official and parallel sale in the market."
He pointed out that "the measures to arrest a person or speculator in the market will not suffice, because the country's foreign trade is large and depends on the dollar, so these steps so far are not sufficient or convincing."
An Economist Explains Why The Dollar Exchange Rate Remains High
The economic expert, Hammam Al-Shamaa, confirmed: The dollar exchange rate remains high due to the high prices of foreign remittances.
He told the National Iraqi News Agency / NINA /: "The difference between the official exchange rate and its price in the parallel market is due to the high prices of remittances outside Iraq due to the decrease in sales of the central bank."
Al-Shamaa added: "The decrease in sales resulted from the restrictions placed by the US Federal Reserve on the external remittances of those who are called money laundering dealers."
He explained: "The remittances rate abroad affects the parallel exchange rate, meaning that the demand for the dollar as a remittance is very high, which is reflected in the cash exchange rate at home."
The exchange rate of the dollar is still high, exceeding 150,000 dinars per hundred dollars, in several numbers, despite the government's announcement that the official exchange rate is 132,000 dinars
An Economists Warns Against Using The Yuan In Iraqi Trade With China
The expert in economic affairs, Raad Twij, warned against using the Yuan currency in Iraqi trade with China.
Twij said in a statement to the National Iraqi News Agency (NINA): "The use of the Yuan in Iraqi trade with China means, in part, the sale of Iraqi oil in Yuan and this has caveats in making Iraqi oil revenues, under the control of the monetary policy of the Chinese Central Bank, and the possibilities of manipulation the value of the Chinese Yuan and in proportion to the interest of the Chinese economy, which may cause losses to Iraq, both in selling Iraqi oil and in the conduct of commodity trade.
He called for "the use of a basket of cash from a group of international currencies that may preserve the value of the Iraqi dinar."
The Central Bank of Iraq intends to regulate the financing of foreign trade directly from China in the Chinese Yuan currency, in a step that is the first of its kind, as part of a package of measures aimed at facilitating access to foreign currencies.
For his part, the expert in economic affairs, Safwan Qusay, confirmed that dealing with Iraqi trade in foreign currencies requires several important things that must be followed for success.
He said, in a statement to the National Iraqi News Agency (NINA), that "the Central Bank of Iraq is trying to reassess all monetary policies to control the demand for the dollar in the parallel market by expanding the circle of direct dealings in international currencies, including the Chinese Yuan, the European euro, the Japanese yen and the US dollar, to facilitate the transfer task for the purposes of international trade with the currency of the supplier, especially after the central bank noticed that the adoption of the fixed price of the dinar against the dollar and the increase in the value of the dollar globally caused the decline of the Chinese Yuan in the parallel market, and thus traders tended to buy the Yuan from the parallel market instead of the official market before the People’s Bank of China (Central) by adjusting the official value of the Yuan more than once during the previous periods in order to preserve its value, which is linked to the migration of most global currencies towards the US dollar, especially after raising interest rates on the US dollar in addition to the Russian-Ukrainian war.
The Central Bank of Iraq intends to regulate the financing of foreign trade directly from China in the Chinese Yuan currency, in a step that is the first of its kind, as part of a package of measures aimed at facilitating access to foreign currencies.
KDP: We are waiting for the final touches to be finalized to resolve the agreement on the budget with Baghdad
The Kurdistan Democratic Party confirmed today, Monday, that it is waiting to put the final touches to settle the agreement on the share of the Kurdistan region within the budget for the year 2023.
“The atmosphere of dialogue and negotiation between Baghdad and Erbil is very good, and there is a great understanding on many controversial files, especially financial and oil, and the final solution to these differences will be when the oil and gas law is legislated, and there is consensus politician to legislate it in the near future.”
And Suleiman stated, “The Kurdistan Regional Government reached a semi-final agreement with the federal government regarding the region’s share within the draft budget law for the year 2023, and dialogues are continuing in order to finally resolve the agreement by putting the final touches on it, and the region’s share within the budget will not be less than 14%.” This is tentative and not final.
The Iranian Revolutionary Guard announces its readiness to train and advise the Iraqi forces
Next Wednesday.. The Secretary-General of the United Nations will visit Iraq
The Secretary-General of the United Nations, Antonio Guterres, will visit Iraq and the Kurdistan Region on Wednesday and Thursday.
The Secretary-General of the United Nations, Antonio Guterres, is scheduled to arrive in the Iraqi capital, Baghdad, at the end of this week, according to a government source.
The source told Shafaq News agency that Guterres will arrive next Wednesday in the Iraqi capital, Baghdad, and during the visit he will hold meetings with the three presidencies and a number of political leaders.
And the source indicated that the Secretary-General of the United Nations will travel next Thursday from Baghdad to the Kurdistan Region to hold meetings with Kurdish officials and leaders in Erbil.
A government source revealed, today, Monday, that the Secretary-General of the United Nations, Antonio Guterres, is expected to visit Iraq next Wednesday.
The source said in a statement to Earth News Agency, "Guterres will arrive next Wednesday to the Iraqi capital, Baghdad, and during the visit he will hold meetings with the three presidencies and a number of political leaders, then he will travel next Thursday from Baghdad to the Kurdistan region to hold meetings with Kurdish officials and leaders in Erbil." .
He added, "The files that Guterres will discuss are climate issues, health issues, poverty, the water crisis, and political files," without further details.
With anticipation of the results, the Chinese yuan is chasing the dollar in Iraq's foreign trade
New dealings in Iraq's foreign trade through the use of the Chinese yuan currency to help strengthen its dinar and relieve pressure on the dollar, after the latter witnessed large booms against the Iraqi dinar in the parallel market, which caused major economic problems and revived the black market.
The Central Bank of Iraq revealed that the step of paying in Chinese yuan comes within the second package of transactions, which includes organizing foreign trade from Beijing, by providing facilities for financial transfers to the United States and Europe, using the same mechanism later.
A number of specialists in financial and economic policy agreed that the use of the Chinese yuan currency comes to relieve pressure on the dollar and to reduce the time period for cash transfers for trade purposes.
Payment is subject to compliance
The financial advisor to the Prime Minister and former deputy governor of the bank, Mazhar Muhammad Salih, said in an interview with Shafaq News agency, "The step of paying in the yuan currency comes to make the mechanisms that are in dollars lighter," adding that "this does not mean that it is not subject to compliance rules, as all foreign transactions and trade financing Foreign affairs, whether in dollars, yuan or euros, are subject today to the compliance platform, in which the papers must be correct, the final beneficiary is present, and the goods enter Iraq.
He added, "This measure will not extend its application to Iraq's oil trade," explaining, "This measure covers only private sector imports."
He pointed out that "Iraq's trade with China is large, and in order not to be hindered, the Chinese yuan was adopted as an intermediary currency to finance foreign trade for the private sector only, but this does not prevent the presence of auditing, compliance and knowledge of the final beneficiary."
Throw ashes in the eyes
"The use of this or that currency in commercial exchanges and monetary and financial transactions is not subject to decisions from above, but rather to the facts that control the global monetary system," said economist and oil expert Hamza Al-Jawahiri, in an interview with Shafaq News agency.
He added, "Many countries previously announced abandoning the dollar and adopting other currencies such as the ruble and the yuan, but these decisions were in most cases sterile, and it is an attempt to sow ashes in the eyes and achieve imaginary victories. It is related to confidence in these currencies and the independence of the central banks that issue them."
He pointed out that "the adoption of the yuan in relation to foreign trade for any country means narrowing the opportunities for trade exchange to a large extent because the confidence of dealers in it at the global level is limited, while the dollar is still at the top of monetary transactions."
And he stressed that "most of Iraq's foreign trade takes place with China, so if Iraq succeeds in converting it into Chinese yuan, this is considered liberation from the dominance of the dollar in global trade and it will be in the interest of Iraq."
The conversion is faster
The economist and professor of economics at the Iraqi University confirmed that "using the yuan currency in foreign trade with China will be subject to the same previous conditions and will not be outside the electronic platform, which is the point that some had imagined that it would not be subject to the platform," noting that "in all cases, you will pay in dollars until you get on the other currency.
He added, "Some of the merchants called on the government to import goods from China in their local currency to facilitate the import process faster, which was approved by the Central Bank of Iraq." The American who will finance Iraqi trade through China by paying in dollars and converting it into Chinese yuan.
Al-Mashhadani explained that "this process may make merchants feel more reassured, free and quick to transfer after these transfers were made for more than 20 days, which is a long period for them, while relying on the Chinese Bank as an agent or the Asian Development Bank will shorten the period due to the presence of a financial balance in these banks." .
Iraq witnessed a shortage of dollars after it was subjected to pressure from the United States aimed at limiting the flow of money to neighboring countries, which had been imposed financial sanctions by the United States of America, and the Federal Reserve Bank of New York last November imposed stricter controls on dollar transactions for banks. As a result, the approval of transfers slowed down and ultimately prompted merchants to buy dollars from exchange offices, which raised the price of the dollar against the Iraqi dinar to high levels, which led to a rise in the prices of basic and food items in the local markets.
The Minister of Finance stresses the necessity of moving banking dealings from paper to electronic
Today, Monday, the Minister of Finance, Taif Sami, stressed the necessity of moving banking dealings from paper to electronic in order to reduce time and simplify procedures for citizens.
And the Rafidain Bank stated, in a statement received by (Baghdad Today), that “the Minister of Finance stressed during her visit to the bank, the need to implement the government program, specifically in applying the banking system and the goals that are achieved through it in the transition from paper-to-electronic transactions, reducing time, simplifying procedures, and overcoming obstacles away.” Routine, in addition to intensifying efforts to raise the level of services provided to customers.
The statement added, "The goal of the visit comes to identify obstacles, diagnose weaknesses in the performance of the banking sector, and work to overcome them by strengthening the capabilities of the comprehensive banking system and providing its requirements to ensure the provision of the best services to the bank's customers."
to be continued
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