The negotiations of the Iraqi delegation in Washington about the dollar "do not bode well"
Two Arab newspapers reported, on Saturday, that the Iraqi delegation headed by Foreign Minister Fuad Hussein is finding it difficult to convince the US administration to ease restrictions on Iraq's access to the dollar.
The London-based Al-Arab newspaper quoted Iraqi political sources, and followed it up (Baghdad Today), that “ the indications received from Washington on the second day of the visit of a high-level Iraqi delegation, to reach new understandings regarding the conditions of the US Federal Bank regarding financial transfers in dollars, do not bode well.” ".
She added, "The press conference that took place between US Secretary of State Anthony Blinken and his Iraqi counterpart Fouad Hussein did not include any indications of an American approach to ease these conditions or implement them in a gradual manner, and that Blinken's statements did not depart from the circle of repeated public speech about his country's keenness to strengthen partnership with Iraq." "
On Thursday, an Iraqi delegation led by the Foreign Minister began an official visit to Washington to discuss a number of sensitive files, foremost of which is the issue of the decline in the value of the Iraqi dinar, following the measures recently imposed by the Federal Bank on the Central Bank of Iraq to "put an end to smuggling operations" of the dollar to countries that Washington imposes sanctions on. Economic, such as Iran and Syria.
This indefinite visit is of great importance to the Iraqis, due to the revival of their local currency, which in recent weeks has witnessed a serious decline, which caused an unprecedented wave of high prices, which led to protest marches.
The Federal Reserve imposed strict measures on dollar transfers, which US and Iraqi officials said were "aimed at curbing money laundering and the illegal transfer of dollars to Iran and other heavily sanctioned countries."
The procedures include establishing an electronic platform - which the Central Bank of Iraq began implementing in early December - that requires accurate details of foreign transfers that take place from Iraq .
Among the Iraqi demands of the US administration is to postpone work on this platform until users are able to know how to deal with it, but Washington has reservations about that, considering that this problem belongs to the Iraqis because the agreement on it took place about two years ago .
During the joint press conference with his American counterpart in Washington, the Iraqi foreign minister thanked the United States for "its support for Iraq in its war against ISIS," and stressed "continuing to work together on the basis of building the Iraqi economy," adding that we need your support in various fields, and we will continue our cooperation. .
For his part, Blinken said, "We are working to strengthen the Iraqi economy and reintegrate it into the region according to the strategic framework agreement that connects the two countries," explaining, "We are now focusing very intensively on the economic dimension of that agreement," which was concluded in 2008 and paved the way for the exit of US forces from Iraq.
And the "London Arab" newspaper says that Blinken did not mention in his statements the main issue related to the issue of the dollar, "indicating that the US administration did not respond to the Iraqi demands."
The Iraqi government had sought to take a number of confidence-building measures with Washington prior to its delegation's visit, including launching a campaign against those involved in forging fake supply receipts, allowing large amounts of hard currency to be transferred abroad, and banning financial companies and banks from dealing with the central bank through a window. Selling hard currency.
During recent days, the Iraqi dinar incurred significant losses that exceeded 30 percent of its value against the dollar, and the Iraqi market witnessed a dangerous rise in the levels of prices of food and consumer goods, compared to what it was less than a month ago.
The Iraqi government fears that its measures taken so far will not have an effect on restoring the stability of the dinar, which could generate angry popular reactions .
For its part, the Saudi newspaper, Al-Sharq Al-Awsat, reported today, Saturday, that the exchange rate fluctuated in the Iraqi markets 4 days after the government’s decision to amend it from 1,700 dinars against the dollar to 1,300. It attributes to observers their belief that the reason is related to the lack of clarity in the final results of the talks that took place
. It is being conducted in Washington by the Iraqi delegation, headed by Deputy Prime Minister and Minister of Foreign Affairs Fuad Hussein, and the Governor of the Central Bank, Ali Al-Alaq, with officials in the US administration.
The Ministry of Foreign Affairs reveals the details of the Iraqi delegation's meeting with the American Chamber of Commerce
Foreign Minister Fuad Hussein affirmed the government's readiness to provide facilities for investment companies in Iraq, while noting that the Iraqi government's priorities focus on building the economy, providing services, and developing the private sector.
A statement by the Ministry of Foreign Affairs said, "The American Chamber of Commerce hosted Deputy Prime Minister and Minister of Foreign Affairs Fuad Hussein and his accompanying delegation," noting that it "organized an expanded meeting of the American-Iraqi Business Council, which included a large group of specialized American companies in various fields."
The Chairman of the Council, Steve Lotus, stressed "the importance of Iraq and the investment opportunities available in it, and the emphasis on the participation of American companies in investment, and the image of strengthening and intensifying joint cooperation in various sectors."
In turn, the minister said in his speech during the session that "Iraq is open to foreign companies and provides the necessary facilities for investment in various fields, focusing on the importance of cooperation and strengthening bilateral relations in the economic aspect with the United States."
And he continued, "As the American side has previously provided assistance and support in the field of combating terrorism and eliminating ISIS terrorist gangs, and now we aspire to build and develop the Iraqi economy and move to the stage of economic cooperation," noting that "the purpose of the visit to Washington is to strengthen cooperation and economic partnership."
He stressed that "the priorities of the Iraqi government focus on building the economy, providing services, developing the private sector, and raising the level of income for the Iraqi citizen," noting that "the Iraqi economy depends heavily on oil and that the risks of dependence on oil through international prices require diversification of sources and resources and investment in various sectors." And the importance of focusing on the gas sector and its extraction, and for Iraq to be a self-sufficient and self-reliant country in the energy sector, and in particular in gas and electricity.
The minister reviewed the steps taken to implement the electrical connection with Jordan and the Kingdom of Saudi Arabia. He also indicated the importance of investment in the field of the agricultural sector, which is an important sector that includes great investment opportunities with the presence of basic resources. The tourism sector also represents a great investment opportunity for companies, as Iraq includes many holy shrines and places. Tourism, and therefore the development of infrastructure within this sector contains great opportunities for investment.
He stressed "the special nature of this visit of an economic nature to discuss ways to enhance cooperation in the field of energy, trade and development of the banking sector, as the American side was keen to cooperate in this aspect and to show full support through the outputs of the current meetings."
He stressed, "The Iraqi government's readiness to provide the necessary facilities to attract companies and the private sector to invest in Iraq by creating transparent legal and administrative mechanisms. He also reviewed efforts aimed at combating corruption and legislative procedures for enacting the oil and gas law and developing and reforming the existing banking and monetary system."
The statement added that "a group of specialized members of the delegation presented a review of existing investment opportunities and proposed projects."
The US Treasury shows full support for the efforts of the Sudanese government in economic reform
On Friday, corresponding to 10/2/2023, the Central Bank of Iraq delegation met for long hours with both the US Federal Reserve Bank delegation and the US Treasury Department in Washington, DC.
The two parties expressed their willingness to work jointly to meet the challenges of working on the electronic platform for remittances and cash.
The delegation of the US Federal Reserve Bank and the US Treasury discussed a number of support mechanisms for the Central Bank of Iraq, in order to enhance its capabilities to deal flexibly with crises during this stage.
The US Federal Bank confirmed that the Central Bank of Iraq's measures are in the right direction to build a solid banking sector.
Mr. Assistant Deputy Secretary of the US Treasury showed ways to fully support the efforts of the government of Iraqi Prime Minister Mr. Muhammad Shia' Al-Sudani in economic reform, and the readiness of the US Treasury Department to provide the required support.
The meeting listened to a presentation by the Governor of the Central Bank of Iraq regarding the bank's directions in achieving its most important goals to ensure general stability in prices, and options and proposals in the field of accelerating, expanding and streamlining the work of the electronic platform for external transfer.
The Governor of the Central Bank of Iraq, Ali Mohsen Ismail, confirmed the bank's intention to launch the second package of facilities that would enhance the stability of the exchange rate.
Central Bank of Iraq
Media Office
Secretary Blinken camera spray with Iraqi Foreign Minister Hussein
The Governor of the Central Bank of Iraq meets with the Vice Chairman of the Board of Directors of JPMorgan Bank
link they tweeted this too
During the meeting, it was agreed that JP Morgan would facilitate payments from the Iraqi banking system to the People's Republic of China to finance private sector imports directly.
A number of issues related to reserves management, liquidity management and technical support provided by the aforementioned bank to the Central Bank of Iraq and the banking sector in Iraq were also discussed.
His Excellency the Governor said: The Central Bank of Iraq is committed to applying international standards in combating money laundering and financing terrorism, stressing the strengthening of the Central Bank of Iraq's relations with its counterparts in the countries of the world to serve the work of the Iraqi banking sector and its development.
Media Office
11/2/2023
It continued for many hours.. The Iraqi Central Bank reveals the details of its meeting with the Federal Reserve and the US Treasury
The Central Bank of Iraq revealed, on Saturday, the details of its meeting with the US Federal Reserve Bank and the US Treasury Department, which it said lasted for many hours.
In a statement received by Shafaq News agency, the bank stated, "The Central Bank of Iraq delegation met for long hours with both the US Federal Reserve Bank and the US Treasury delegation in Washington, D.C. at the same time."
According to the statement, the two parties expressed their willingness to work jointly to meet the challenges of working on the electronic platform for remittances and cash.
The delegation of the US Federal Reserve Bank and the US Treasury discussed a number of support mechanisms for the Central Bank of Iraq, in order to enhance its capabilities to deal flexibly with crises during this stage.
And the US Federal Bank confirmed that "the Central Bank of Iraq's measures are in the right direction to build a sober banking sector."
The Assistant Deputy Secretary of the US Treasury indicated ways to fully support the efforts of the government of Iraqi Prime Minister Muhammad Shia al-Sudani in economic reform, and the readiness of the US Treasury Department to provide the required support.
The meeting listened to a presentation by the Governor of the Central Bank of Iraq regarding the bank's directions in achieving its most important goals to ensure general stability in prices, and options and proposals in the field of accelerating, expanding and streamlining the work of the electronic platform for external transfer.
The Governor of the Central Bank of Iraq, Ali Mohsen Ismail, confirmed the bank's intention to launch the second package of facilities that would enhance the stability of the exchange rate.
Congress calls on the federal government and the treasury to clarify the procedures for checking Iraqi transfers
Three US representatives, Michael Waltz, Kevin Hearn, and Joe Wilson, called on US President Joe Biden to clarify the measures taken by the Federal Bank and the Treasury Department to audit dollar-funded transfers and ensure that they do not go to Iran.
The three deputies said in the document addressed to the US president that the Federal Bank and the Treasury Department are required to disclose their measures taken to prevent the exit of US dollars from Iraq to Iran or its agents, directly or indirectly, including cash sales and transfers from the Central Bank of Iraq, and if there are any. Any legal steps from the Federal Bank and the US Treasury to prevent the flow of dollars from Iraq to Iran and the institutions listed on the US sanctions list.
Telephone talks between the foreign ministers of Iran and Iraq regarding negotiations to lift the embargo
Did he call him from AMerica?
The foreign ministers of the Islamic Republic of Iran and Iraq held talks by phone today, Saturday In the phone call between Iraqi Foreign Minister Fuad Hussein and Hussein Amir Abdullahian, the two sides discussed the latest .developments in bilateral relations .
The two sides also discussed the steps related to the agreement to lift the ban .T
his invited Iraqi Foreign Minister Hussein Amir Abdullahian to visit Baghdad
An economist determines the duration of the end of the dollar exchange rate gap between the official and the parallel
Economic expert Abd al-Rahman al-Mashhadani specified, on Saturday, the period for ending the official exchange rate gap with the parallel local market, while stressing that government measures are moving towards reforming the Iraqi economy in all its details.
Al-Mashhadani said in an interview with Al-Maalouma agency that "the period of the gap between the official dollar exchange rate and the local parallel market will not exceed two weeks from now," noting that "the difference in foreign remittances for merchants is still large compared to the official price."
He attributed the reasons for the gap to that “the notary’s failure to ratify the contracts of small merchants granted by the Chamber of Commerce in order to obtain a license that allows him to facilitate the purchase of the dollar,” noting that “the central bank decided today to work by granting commercial licenses in order to obtain a license to buy dollars from the central bank directly, and this is what It will reduce the size of the gap between the official and the parallel."
He continued, "The government's measures are moving towards reforming the Iraqi economy in all its details," stressing that "many decisions were taken during the meeting of Prime Minister Muhammad Shia' al-Sudani with members of the Chamber of Commerce, the deputy governor of the Central Bank, the director of the TBI Bank, and a number of economists."
And he added, "Al-Sudani is following all the details of getting out of the dollar crisis and ways to develop the Iraqi economy in all its fields."
The local markets, due to the measures taken by the US Federal Bank on Iraq, are witnessing a discrepancy in the exchange rates of the dollar between high and low, despite the decision of the Council of Ministers to reduce the official dollar exchange rate to 130,000 for every 100 US dollars
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Optimism about ending the gap between the “official” and “parallel” prices of the dollar
Experts in finance and economics have expressed optimism that the Central Bank of Iraq’s agreement with a major American financial institution to pay the banking system payments to China will contribute to bridging the wide gap between the “official” and “parallel” rates of the dollar, and the experts explained that the difference between the two prices is due to multiple reasons not related to the decision. government, but by temporarily changing the mechanism of financial transfers for the purpose of import, and that it is possible, with serious and strong measures, to restore the stability of the exchange rate.
And the Advisor to the Prime Minister for Financial Affairs, Dr. Mazhar Muhammad Salih, said in an interview with “Al-Sabah” that “the function of the monetary policy of the central bank is to impose stability, so when exchange rates began to approach (two decimal places) due to the expectations of current inflation, monetary policy entered With its reserves to raise the value of the Iraqi dinar.
He pointed out that "the reason for the difference in the official exchange rate from the parallel rate is not economic, but because of an international administrative regulation caused by transfers that constitute about 90 percent of the demand for currency, and these transfers are subject to compliance rules imposed by the US Treasury and the Federal Bank."
He emphasized that "all these are temporary problems, and that with the regularity of Iraq's foreign trade and its submission to compliance, transparency and governance controls, as was the case in Washington in terms of agreements and firmness, over time the exchange rates will stabilize."
Salih pointed out that "the Iraqi Central Bank's announcement that trade between Iraq and China, which exceeds $53 billion annually, will take place directly with China through the mediation of an American bank, which will bring the official price of the dollar closer to the parallel price by 50 percent."
Yesterday, Saturday, the Central Bank of Iraq announced the agreement with the American “JP Morgan” bank to facilitate payments from the Iraqi banking system to China to finance imports.
And the Central Bank stated in a statement issued yesterday, Saturday, that its governor, Ali Mohsen Ismail, met with Daniel Zeliko, Vice Chairman of the Board of Directors of the “JP Morgan” institution, on the sidelines of his visit to Washington, and during the meeting it was agreed that the “JP Morgan” bank would facilitate payments from The Iraqi banking system to the People's Republic of China to directly finance private sector imports.
And the Chinese embassy in Iraq had announced, yesterday, Friday, that the volume of trade exchange between the two countries exceeded 53 billion US dollars during the past year.
In addition, the expert on economic affairs, Dr. Nabil Al-Marsoumi, said in an interview with "Al-Sabah": "The gap between the official exchange rate and the parallel rate is expected, because the problem today is in bank transfers and restricting imports, so when bank transfers decrease by the range of 85-90 Percent of financing foreign trade is directed towards (the cash dollar) for which the demand has increased, so that we have two rates, the "parallel" that takes place between merchants at home, and the official exchange rate regulated and determined administratively by the Central Bank of Iraq.
Barzani heads to Dubai to participate in the World Government Summit
A statement by the regional government stated that Barzani "will hold, during the summit, a series of meetings and gatherings with senior Arab, regional and global leaders, officials, thinkers and business owners."
The World Government Summit is held annually in Dubai, and this year brings together about 20 heads of state and government, more than 250 ministers and thousands of government officials.
The Sulaymaniyah Chamber of Commerce is in the process of adopting the Iraqi dinar in its dealings and expectations of a stable exchange rate
A parliamentarian from Sulaymaniyah Governorate announced, on Sunday, that the Sulaymaniyah Chamber of Commerce and Industry will adopt the Iraqi dinar in its daily dealings, expecting the exchange rate to stabilize soon after the reform steps of the Central Bank of Iraq.
"The steps of the Central Bank of Iraq and the Prime Minister of Iraq were in the right direction, and they had the blessing of the US Federal Bank," Briar Rashid said during a press conference attended by Shafaq News Agency in Sulaymaniyah.
He added, "After the joint statement of the Central Bank of Iraq and the US Federal Bank, the exchange rate of the dollar will stabilize significantly, since the content of the seven points that were agreed upon provides for the adoption of a banking system in financial transactions," stressing that "adopting this system will contribute to addressing many financial problems." .
Rashid also indicated that "the Sulaymaniyah Chamber of Commerce and Industry is trying with other concerned parties to adopt the dinar in all daily dealings related to the life of the citizen, such as buying and selling, loans and investments, since the Iraqi citizen's imports are in dinars, and transactions must be in dinars so that he is not harmed in the event of instability." price of foreign currencies.
Regarding the draft budget for the year 2023, Rashid said, "The draft is still with the Ministry of Finance, and the Kurdistan Region delegation arrived last night to discuss some issues related to the region's share, and after completing the process, the draft will be sent to the Economic Council, after which it will go to the Council of Ministers and at that time it will be presented as a draft to the Iraqi Parliament."
He pointed out that, "Sending the draft budget was delayed a lot, as it was expected to arrive in January or early February, but for many reasons, including fluctuations in the dollar exchange rate, the issue of resolving the budget was delayed."
Regarding the stability of the dollar price in the markets, Representative Briar Rashid expected, "The dollar price will soon stabilize at the government exchange rate or a little more."
US vows to strengthen Iraq’s ‘economic integration’ across West
Many have criticized Iraq’s economic over-dependence on Washington, which the US has been accused of trying to capitalize on to the detriment of Baghdad
US Secretary of State Anthony Blinken vowed to help strengthen Iraq’s “economic integration” across West Asia during a meeting with Iraqi Foreign Minister Fuad Hussein in Washington on 9 February.
Blinken told Hussein – who headed an official delegation that arrived in the US on Thursday – that Iraq “can and should” achieve total energy independence.
“We have worked together for many years – too many years … But this is an important moment, an important meeting,” Blinken told Hussein upon his arrival at the State Department.
“We have a Strategic Framework Agreement with Iraq, but we are now focused very intensely on the economic dimension of that agreement and the work that we can do together, the United States and Iraq, to continue to strengthen Iraq’s economy, its integration, reintegration in the region, in ways that make a material difference in the lives of the Iraqi people and Iraqi citizens,” he added.
Hussein told Blinken that “Iraq is in need of [US] support in various fields, and … will continue cooperation.”
Recently, Iraq’s economic situation has been impacted by increased US sanctions against Iran. In an attempt to “curtail money laundering and the illegal siphoning of dollars” to the Islamic Republic, the New York Federal Reserve has enforced stricter rules on Iraqi commercial bank transactions, the Wall Street Journal reported in January.
This caused the blocking of over 80 percent of Iraq’s daily US dollar wire transfers. Before the implementation of these new rules, daily US dollar transfers could total over $250 million, signifying what some have referred to as Iraq’s over-dependence on US currency.
As a result, Iraqi Prime Minister Mohammed Shia al-Sudani said at the time that Washington’s actions were harming the poor and threatening the government’s budget.
The meeting between Hussein and Blinken also follows a recent increase in energy cooperation talks between Baghdad and Moscow. On 5 February, Russian Foreign Minister Sergei Lavrov arrived in Baghdad for discussions on how to enhance this cooperation, among other things.
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