Replacing the dinar with the dollar
Finally, the Central Bank of Iraq announced in a statement last week that “the coming year will witness the restriction of all internal commercial and other transactions to the Iraqi dinar instead of the dollar, except for those delivered to travelers.”
Financing foreign trade will be directly for merchants dealing in remittances outside the electronic platform, through licensed banks that will deal with correspondent banks in foreign transfer operations and in the local currency of the country from which the merchant wants to import. Then the dollar auction will be gradually dispensed with and the central bank will intervene to control the exchange rate through a shift in its tools. Cash, which will be more effective in achieving monetary stability, due to the expected decline of the so-called black market and the emergence of a real parallel market that will effectively contribute to financing the total demand for foreign currencies after the local currencies of the trading countries are traded within the parallel market following the opening of transfer channels for those currencies in a way Official. Thus, we will witness a new phase in which exchange rates will be more stable than the phases witnessed in previous years if dollar smuggling operations are controlled, which is expected to decline automatically with the decline of the dollar supply on the black market.
At that time, the country will witness the real beginning of an attractive investment environment, as the confusion in the dollar exchange rate was often an element that repelled investors due to their inability to delve into the area of expectations in which the exchange rate was fluctuating, which makes financial feasibility studies more difficult in calculating construction and operating costs and recovery periods. Total costs and profit calculations. This is in addition to other repulsive factors, which were the confusion of the security situation, the incompleteness of legislation related to the investment environment and the regulation of market relations, the failure to activate the package of economic laws that had been legislated, and the spread of corruption and bureaucracy.
However, there is a problem linking the exchange rate and the costs of production in neighboring countries compared to the costs of production inside Iraq. The lower the exchange rates of neighboring countries’ currencies are against other currencies, such as in Turkey, Iran, and Syria, compared to the exchange rate of the Iraqi dinar, the lower the cost of producing goods in those countries. The cost of production is comparable to that in Iraq, which makes the investment environment unattractive at the level of production of traditional goods produced in neighboring countries unless borders are controlled to protect the local product in addition to protecting exchange rates from currency smuggling.
Warnings of the spread of an economic phenomenon in Iraq that is “destroying” the poor and needy
Dealing in usury, or what is popularly called debt, is widespread in Iraqi society, to the point that it has become a phenomenon widely practiced in popular circles, as well as in governmental and non-governmental banking institutions.
Citizens are sometimes forced to borrow from those who have money according to what is called “Al-Fayez”, with the money being repaid in installments with high interest, but it quickly turns into a crisis due to their inability to repay it, and the amount is doubled for them.
Heavy losses
This is confirmed by the economic expert, Omar Al-Halbousi, by saying, “(Al-Fayez) has become a means of borrowing that burdens the Iraqi citizen, and he is exposed to great injustice as a result of resorting to this borrowing, through which the borrower is exposed to heavy losses, especially the borrower in dollars.”
Al-Halbousi explained to Shafaq News Agency, “The dollar borrower bears three losses, the first is interest (Al-Fayez), which is very large and is calculated as interest on the amount, with a financial margin in anticipation of fluctuations in the exchange rate.”
The second loss, according to Al-Halbousi, is “the late interest that doubles whenever the borrower delays paying, and which exceeds the amount of interest twice. The first is the delay interest, and the second is the increase in the exchange rate,” adding that “the third loss is the dollar exchange rate difference that is rising rapidly, which... It increases the size of the borrower's losses.
He confirms, “This makes the borrower exposed to insolvency in repayment, which entails large interest rates, which means more losses that the borrower will remain locked in in light of exchange rate fluctuations that increase the accumulation of losses for the dollar borrower in (Fayez).”
Need and emergency situations
For his part, citizen Hussein Jassim from Karbala Governorate points out that “some citizens resort to borrowing under duress due to the need for funds due to emergency circumstances, such as when they have a patient who is undergoing an operation and the like, despite their knowledge that it is forbidden by law.”
Jassim added to Shafaq News Agency, “Some citizens borrow in dollars, as a result of the fluctuation of exchange rates and its continuous rise, as it contributes to exacerbating the difficulty of repaying debts.”
Article 465
Article 465 of the Iraqi Penal Code No. 111 of 1969 stipulates imprisonment and a fine, or one of these two penalties, whoever lends money to another with an apparent or hidden interest that exceeds the maximum stipulated interest that can be legally agreed upon, according to the two legal experts, Ali Al-Tamimi and Haider Al-Sufi.
The two jurists who spoke to Shafaq News Agency added, "The penalty will be temporary imprisonment from 5 to 10 years, if the lender commits a crime similar to the first crime within 3 years from the date of the first ruling becoming final. The penalty will depend on the severity of the crime, the greed of the lender, and the conditions."
Ali Al-Tamimi points out that, “In 1997, the dissolved Revolutionary Command Council issued Law 68, which punishes this crime with 3 years’ imprisonment, considers it dishonorable, and increases its severity if it is repeated within 3 years by the same person, reaching 10 years.”
Al-Tamimi explains, “Law 68 required the confiscation of the lender’s amount or interest and created a special fund for the poor in which the confiscated amounts are deposited. This fund is in the Ministry of Labor, and the amount is distributed at a rate of 40% of the value of the usury money or interest on the poor, and 40% to the informing borrower.” for the crime, and 20% to the non-lending informant.”
Secret crimes
For his part, Haider Al-Sufi says, “In the Code of Criminal Procedure, if the borrower takes the initiative to inform the lender, he is exempted from the penalty and the penalty remains on the lender. However, the borrower is always in need of borrowing money, and the lender exploits him with usury, so the borrower does not go to... The judiciary to inform the lender.
Al-Sufi and Al-Tamimi agree that “usury operations are widespread in Iraqi markets, beyond the reach of the judiciary and the police, because they are carried out discreetly and secretly among borrowers, which requires an intelligence effort to combat these secret crimes that violate the provisions of Islamic Sharia, and also requires increasing awareness about these crimes, as they are "Unknown and the resulting legal penalties."
Parliamentary movement
Last July, Representative Alaa Al-Haidari submitted a request to the Presidency of the House of Representatives to legislate the law against the phenomenon of usury, accompanied by the signatures of 82 deputies, who constitute approximately 25% of the 329 members of the House of Representatives.
Al-Haidari also affirmed in his previous tweet, “We pledge to the people to bear the legal and legal responsibility to work on legislating the law against usury, after its spread and expansion in various forms and in a way that threatens Iraqi society,” speaking of “those with weak souls who exploit their economic situation to maximize their money without effort at the expense of the needy.” And borrowers.”
Opening of a residential complex project in Baghdad that includes the highest skyscraper in Iraq
On Saturday, the head of the Investment Authority, Haider Makiya, inaugurated the “Downtown Baghdad” project, which will include the highest skyscraper in Iraq with 60 floors.
Makiya said in an interview with the official news agency, “The Downtown Baghdad project will be a residential complex with a modern and modern design, and its assets will be sustainable, and there will be no additional expenses for electrical energy and thermal insulation, and they will be borne by the implementing company.”
He added, "The project will include the highest skyscraper in Iraq and will be an architectural masterpiece with a contemporary and modern face. We hope that such projects will be repeated in Iraq."
In turn, the director of the “Downtown Baghdad” project, Bilal Al-Jumaili, said, “The project consists of 1,800 residential units on an area of 12,000 square meters and includes the highest tower (skyscraper) in Iraq with 60 floors, while the residential buildings will be built with 30 floors and modern designs have been adopted.” Based on the directives of Prime Minister Muhammad Shiaa Al-Sudani, which stressed the necessity of providing means of sustainability and the highest levels of comfort to citizens,” the official news agency reported.
The opening of the highest skyscraper in Iraq by the Investment Authority
Iraq Dollar Ban: Tough Choices for the ‘Coordination Framework’
Political factions involved in speculation and dollar smuggling operations have suffered a significant blow as Iraqi authorities are set to ban external transactions in the US currency starting in January.
A government official, speaking to Asharq Al-Awsat, affirmed that Washington is looking to reduce the circulation of physical dollars to prevent their use in suspicious activities, even months after the implementation of the US Federal Reserve’s restrictions.
Companies and individuals in Iraq will be required to conduct financial transactions in the local dinar at the official exchange rate.
However, this process is expected to take a considerable amount of time before the Iraqi market fully adapts, unless political forces discover new ways of circumventing these restrictions, as indicated by an Iraqi banking official.
According to journalistic and financial sources, Washington rejected Iraq’s request for a billion dollars in cash from the Federal Reserve Bank due to concerns over Baghdad’s conflicting efforts to curb the use of physical US dollars and halt illicit flows to Iran.
Washington routinely dispatches shipments of dollars to Iraq through US military aircraft, but since the end of last year, it has imposed restrictions and mechanisms to track e-transfers involving these funds.
As a result, Iraq’s Central Bank has been forced to reduce the allotments of currency exchange companies in physical US dollars by more than half.
This will have future implications on the exchange rate of the Iraqi dinar against the dollar in the parallel market, and it will almost halve Iraq’s imports from Iran.
Talk of the ban has forced political parties within the “Coordination Framework” coalition to discuss “ideas on how to swiftly change the leadership of the Central Bank,” according to Iraqi lawmakers who spoke with Asharq Al-Awsat.
However, what hinders this decision is the political timing, which raises US concerns.
The Central Bank of Iraq was supposed to succeed in channeling dollar sales through the official exchange window, but political entities with financial and commercial interests have found a way to trade dollars in an off-the-grid parallel market beyond the state’s control.
Parliamentary Oil: Deep disagreements prevent the approval of the oil and gas law in the current parliamentary session
A member of the Parliamentary Oil and Gas Committee ruled out approving the draft oil law in the current parliamentary session.
Ali Saadoun Ghulam told Al-Furat News Agency, “Because of the differences between the center and the Kurdistan region, we rule out that the law will approve this parliamentary session.”He stated that "the differences are deep, in addition to the intervention and reservations of the oil-producing governorates regarding the law, and we expect that it will not be approved due to the depth of the differences between the center and the region."
Ghulam explained, "In the beginning, there was a difference in viewpoints, but now, after reviewing the important controversial points, we expect that there will be difficulty in approving the law this session."
It is noteworthy that since the first session of the House of Representatives, in 2005, the draft oil and gas law has been stuck in drawers, as disagreements prevent its approval in its final form.
After 18 years, he announced, in late last August, the formation of a committee to develop “a draft of the oil and gas law and present it to the government and the House of Representatives.”
The committee that was formed between Baghdad and Kurdistan to draft a draft law for oil and gas includes “the Minister of Oil, the Minister of Natural Resources in the region, the Director General of SOMO Company, and the advanced staff in the Ministry of Oil, as well as the oil-producing governorates such as Basra, Dhi Qar, Maysan, and Kirkuk.”
The Prime Minister, Muhammad Shiaa Al-Sudani, said in early August that “the draft oil and gas law is one of the basic and important laws that represents a factor of strength and unity for Iraq, and it has been stuck for years, at a time when the country today is in dire need of its legislation and to benefit from this natural wealth.” In all fields and sectors, in addition to the contribution of the legislation to solving many outstanding problems.”
He explained, "There are governorates whose wealth has not been invested to date, which is considered negative for development efforts in all their paths."
Meanwhile, the financial advisor to the Prime Minister, Mazhar Muhammad Saleh, confirmed in a press statement that “accelerating the approval of the federal oil and gas project law in the House of Representatives as quickly as possible will establish a stable national road map for investment and production of the country’s primary sovereign resource, which is oil and gas.”
Iraq exports an average of 3.3 million barrels of crude oil per day, and black gold constitutes more than 90 percent of the Iraqi treasury’s resources.
Iraq is set to fuel de-dollarization by banning the buck from being used in cash transactions, report says
Iraq is about to become the latest country to join the de-dollarization drive, per Reuters.
The greenback will be banned from being used in cash transactions and withdrawals from January 1, the outlet reported.
Several countries, including China and Russia, have made efforts to fuel the de-dollarization movement this year.
Iraq will ban the US dollar from the start of next year as the global movement against the greenback gathers pace, one of the country's top financial policymakers told Reuters.
People won't be able to withdraw cash in dollars or use the greenback in transactions from January 1, 2024, Iraqi central bank director-general of investment and remittances Mazen Ahmed said in an interview with the outlet.
The country will ban the buck in a bid to stamp out crime, he said, with over $5 billion worth of the cash that the central bank imports from New York reportedly used in illegal activities.
"You want to transfer? Transfer. You want a card in dollars? Here you go, you can use the card inside Iraq at the official rate, or if you want to withdraw cash, you can at the official rate in dinars," Ahmed told Reuters. "But don't talk to me about cash dollars anymore."
The local currency, the Iraqi dinar, currently exchanges at a rate of around 1,300 dinar per dollar.
Iraq isn't the only country engaged in de-dollarization – a movement where countries try to reduce their reliance on the greenback, often in a bid to undermine its dominant role in international trade.
China and Russia are spearheading the effort to wean the world off the buck.
Beijing has asked Middle Eastern suppliers to accept its own currency, the yuan, rather than the dollar – while Vladimir Putin has forbidden any "unfriendly" countries from settling trades using any currency other than the ruble.
The two countries have also repeatedly pledged – alongside other members of the BRICS group – to launch a new currency that they hope one day could unseat the dollar as the dominant international reserve.
A specialist is likely to make minor changes to the 2024 budget
Iraqi economic researcher Bassem Antoine confirmed that the 2024 budget has been previously decided, but some changes will be made to it in the general lines, indicating that these changes will not take as long as in the 2023 budget.
Antoine said in a press interview seen by “Taqaddam” that “the amendments that will be made to the 2024 budget include additions or deletions. For example, there will be an increase in the budget as a result of new appointments of new employees, including what is related to the price of a barrel of oil. Will it remain the same or will it rise?” Or will it decrease?
Regarding the budget schedules, the economic expert explained that “there are proposals and complete approval in the budget that will be submitted to the House of Representatives, as it will not remain the same figures for revenues and expenditures,” noting that “there are basic general lines that facilitate and reduce the period for issuing the budget.”
The dollar is “forbidden” to Iraqis, and a “Jordanian” bank alone accounts for 70% of sales!.. What is the story of the Central Bank?
The file of “restriction” on the dollar by the Central Bank of Iraq is surrounded by many circumstances, the most important of which is depriving Iraqis of the freedom to deal in other currencies, to meet their daily needs, or to receive their remittances and salaries paid in dollars by external institutions. In return, the Central Bank of Iraq grants approximately 70% of Daily dollar sales for one non-Iraqi private bank.
The National Bank of Iraq, or what the Iraqis sarcastically describe as “Jordanian”, since it is 65% owned by the Capital Bank of Jordan, began to reveal the papers of its dominance and its possession of the largest percentage of the dollar issued by the Central Bank of Iraq, with the start of restrictions on the dollar and not even the Rafidain Governmental Bank getting its share. Sufficient supply of dollars, which prompted it to be patient in providing dollars to travelers in a number of its branches recently.
Although the Bank of Jordan accounts for the largest percentage of daily currency sales, according to representatives, including Chairman of the Parliamentary Action Committee Hussein Arab, the bank opened eyes to it when a video clip spread of one of the Iraqis depositing their money in dollars with the bank, but the bank refused to hand over his money to him. He was forced to withdraw his money in Iraqi dinars and at the official exchange rate, which prompted the citizen to scream inside the bank.
Representative Hussein Arab told “Baghdad Today” that “the Jordan National Bank accounts for 70% of the amounts of financial transfers through the electronic dollar platform.”
Arab considered that "what is happening is abnormal and catastrophic," stressing that "we will have a clear position on manipulating the fate of the country's economy."
According to Arabs, financial transfers in dollars from the Jordan National Bank amount to approximately 100 million dollars daily, noting that the total currency sales at the Central Bank auction range between 170 to 190 million dollars.
According to sources who spoke to "Baghdad Today", "For at least two years, the Central Bank of Iraq has been 'discreet' about the names of the banks participating in the foreign currency auction, amid accusations and information about the dominance of certain banks in the currency auction over others."
Only 30% of banks dominate the central window
She indicates - on the condition that her name not be mentioned - that, for example, there are more than 80 banks in Iraq, but the daily bulletin of the Central Bank’s sales shows that the number of banks participating in meeting cash requests ranges between 5 to 7 banks only, while the number of banks participating in meeting remittances does not exceed Foreign Affairs: More than 20 banks.
This means - according to the sources - that only 30% of the total banks in Iraq at most are dominant in the currency sale auction from the Central Bank of Iraq, which in turn is reserved and discreet about announcing the names of these banks.
Specialized circles believe that the dominance of a few banks over the currency selling window will make their profits greater. It will also reduce the amount of dollars on offer and increase the chances of “blackmailing” other banks, as these banks can participate in the currency auction by selling the dollar to banks that need the dollar at a profit margin.
The euro is the key to resolving the dollar crisis in Iraq
The euro is ranked second in the world after the US dollar, as it is considered one of the strong currencies in international trade. The euro is also the second most traded currency in the world after the US dollar, and the British pound is ranked fourth.
The Central Bank of Iraq is supposed to take the first step by diversifying its financial assets and increasing the share of the euro, in addition to the pound sterling, at the expense of the US dollar, as the Central Bank of Iraq’s foreign currency reserve is estimated at approximately 113 billion dollars.
The Central Bank of Iraq keeping a portion of its reserves in euros will not have any negative impact on the value of the Iraqi dinar, but it will preserve its value. An example of this is the Kuwaiti dinar, which is denominated against a basket of foreign currencies such as the dollar, euro, and pound sterling.
The Central Bank of Iraq could have pumped the euro currency into the currency sale window auction, after the strict measures imposed by the US Federal Reserve Bank and the US Department of the Treasury on the Central Bank of Iraq by selling the US dollar currency, with the aim of preventing the smuggling of the dollar into Iran, and therefore The goal of selling the euro in the currency selling window is to avoid the restrictions imposed on the Central Bank of Iraq by the US Treasury, and also to reduce the demand for the US dollar with the aim of reducing the gap between the official rate and the exchange rate in the parallel market.
The Central Bank of Iraq was supposed to establish its own platform, as this platform specializes in selling the euro and the pound sterling, and it can also be sold to citizens in cash, just as the euro is a global currency that the Iraqi merchant can deal with normally and smoothly in any country. It excluded Iran, so some foreign imports could be covered through euros instead of dollars.
Although I am against the idea of giving each citizen 3,000 US dollars to travel and smuggling hard currency out of the country, but at the same time, if the Central Bank of Iraq continues this policy, I suggest giving citizens the euro as well to travel outside the country in order to reduce the demand for the dollar. American.
Hoarded money:
In order to be realistic, unfortunately, there is a large percentage of the Iraqi people who save their money in the US dollar currency at the expense of the Iraqi dinar, and therefore it is very important to instill a culture of saving or trading in the euro instead of the US dollar among the citizens, in order to reduce the demand for the dollar by the citizens. Those who save their money in US dollars, and this will also aim to withdraw the dinar block from the funds hoarded by citizens, because the Iraqi government has a scarcity of the Iraqi dinar due to the explosive budget, specifically in operational expenses, and it is expected that there will be a deficit in the coming period in paying employees’ salaries. By the Iraqi government, because the dinar block at the Central Bank of Iraq is unable to cover operating expenses, which forces the Central Bank of Iraq to print the dinar, and this in itself is considered a great danger to the value of the Iraqi dinar and the high rate of inflation, and thus its consequences will be serious and negative forIraqi economy.
Euro is an investment currency:
The euro is considered an investment currency because it generally moves in an upward direction in the long term, as it rose from the end of last year from levels of 0.96 cents to 1.12 US dollars two months ago, meaning an increase of approximately more than 15%, and the euro currency is currently in the process of a deep correction as it has declined. To a level of approximately 1.04 US dollars several days ago, and now it is reeling at levels of 1.05 US dollars, and perhaps the rise will resume or the correction will be completed to levels close to the parity point with the dollar, and this in itself is considered an appropriate opportunity for the Central Bank of Iraq to buy the euro currency at a value of 10. One billion euros at the very least, and I personally saved part of my money in the euro currency, and it is expected that the euro currency will target levels of 1.15 US dollars and more during the first quarter of next year.
In the event that the Central Bank of Iraq sells part of the currency sale window auction in euro currency, a month worth two billion euros, that is, selling 100
Suppose that the Central Bank of Iraq pumped the euro currency into the markets when it was at a price of 0.96 cents at the end of last year, at the time when the dollar crisis began in Iraq, which resulted in reducing the gap between the official rate and the exchange rate in the parallel market very significantly, and at the same time achieved... Citizens who bought the euro at the time gained an estimated 15% profit.
Also, at the same time, the Central Bank of Iraq could have invested in the euro if it had kept part of its euro currency reserves, assuming 10 billion euros and sold it when it reached $1.12. It would also have achieved profits of an estimated 15%, or about 1.5 billion.
The question here is: Is the Central Bank of Iraq able to transfer part of its assets from the US dollar to the euro?
Or will he be a prisoner of the directions of the US Treasury and the policy of the US Federal Reserve?
An Iraqi warning of the “explosion of the Middle East” if Washington interferes with what is happening in Palestine
The leader in the coordination framework, Jabbar Odeh, warned today, Saturday (October 7, 2023), that the Middle East is on the “verge of a major explosion” due to American policies.
Odeh said, “Operation Al-Aqsa Flood is a natural response to Israel’s massacres against the Palestinian people, and what has been achieved so far indicates that we are facing a weak entity despite the media pumping for many years about its equipment, devices and capabilities, which collapsed minutes after the influx of Palestinian resistance that has invaded 15 settlements so far.”
He added, “The Middle East will literally explode if Washington intervenes to support Tel Aviv in the face of the Palestinian resistance,” pointing out, “Washington’s interests will not be immune from the Islamic resistance in all Arab countries without exception.”
He pointed out that “the resistance will not allow the Palestinian people to be suppressed and exterminated,” pointing out that “the American administration’s statements in support of Tel Aviv demonstrate that it is on the side of those who kill innocents.”
The Palestinian Islamic Resistance Movement (Hamas) launched an unprecedented attack on Israel on Saturday morning, launching thousands of rockets and sending gunmen to Israeli towns by land, sea and air.
The Times of Israel newspaper said that the multi-faceted attack surprised the Israeli army and security forces alike.
On the other hand, Ministry of Health officials in Gaza said that 198 Palestinians were martyred as a result of the Israeli raids that came in response to the Hamas attack.
The United States “unequivocally” condemned the “unjustified” attacks launched by Hamas from the Gaza Strip towards Israel, since dawn on Saturday.
National Security Council spokeswoman Adrienne Watson said on Saturday in a statement, “There is never any justification for terrorism. We stand firmly with the government and people of Israel, and we express our condolences for the Israeli lives lost in these attacks,” according to the American statement.
The Iraqi economy is at the mercy of monthly dollar shipping flights from Washington
Financial observers are discussing the repercussions of Washington’s rejection of Iraq’s request to obtain a billion dollars in cash from the Federal Reserve Bank, under the pretext that it conflicts with efforts to curb Baghdad’s use of the dollar and stop illicit cash flows, according to the American newspaper “The Wall Street Journal,” which said that the United States The United States provides $10 billion or more annually to Baghdad via bi-monthly cargo flights, and the money is derived from the proceeds of Iraqi oil sales deposited with the Federal Reserve Bank.
Preventing the United States from delivering a billion dollars to Iraq will have negative effects on the economy, as it will limit the resources available to finance basic services and development projects such as education, health, and electricity, and will lead to delaying development projects, such as building roads, bridges, and power stations, and increasing the financial deficit, which may lead to an increase in... Taxes or borrowing.
Economic analyst Zia Al-Mohsen believes that the Central Bank’s sales through the currency selling window exceed the needs of the Iraqi market, and that there are individuals involved in this matter, so the US Federal Reserve could place another group of private commercial banks under US sanctions, in addition to a number of offices. Banking that revolves around private banks. Moreover, the decision may include, in one way or another, the Iraqi banking system, which can be concluded from the deterioration of the relationship between the US Federal Reserve and the Iraqi Central Bank, which is what actually happened when the former refrained from supplying Iraq with a billion dollars.
There is still an opportunity for the Sudanese government to put things back in order and control the unjustified rise in the exchange rate of the dollar against the Iraqi dinar, but it is an opportunity that will not be open-ended, as time passes and it affects the national economy, which is directly reflected on the citizen.
Economist Nabil Al-Marsoumi commented on the Central Bank of Iraq’s reduction of banking companies’ shares of the cash dollar by more than half.
Al-Marsoumi wrote in a blog post on Facebook, “The US Federal Reserve reduced its cash dollar transfers to Iraq from 10 billion dollars to 5 billion dollars annually through semi-monthly shipments.”
He added, "Washington rejected an Iraqi request for an additional billion dollars because it conflicts with American efforts to curb Baghdad's use of the dollar and stop illicit cash flows."
Al-Marsoumi pointed out that, “As a result, the Central Bank of Iraq was forced to reduce the banking companies’ shares of the cash dollar by more than half, which will affect the exchange rate of the dinar against the dollar in the parallel market in the future and will reduce Iraq’s imports from Iran by almost half.”
An Iraqi decision that workers’ wages be in dinars and not in dollars, and the Syrians are among them... Dr. Kanaan to Al-Watan: This will lead to a reduction in foreign transfers by up to 40 percent, and the Syrian government must intervene.
A senior official in the Central Bank of Iraq confirmed that the country will ban cash withdrawals and transactions in US dollars starting from January 1, 2024, with the aim of stopping the illegal use of about 50 percent of the $10 billion cash amount that Iraq imports annually from the Federal Reserve Board (the US Central Bank). They noted that this step comes within the framework of a broader campaign to stop the economy’s dependence on the dollar, after the population began to prefer the American currency over the dinar and to work to reduce the current inflation.
Within the framework of this decision and taking into account the proportion of Syrian workers present in Iraq, “Al-Watan” communicated with a number of workers in Baghdad and Erbil: Nour Fandi, an air conditioning and refrigeration maintenance worker in Erbil, explained in a special statement to “Al-Watan” that the condition of the contract concluded with the party receiving him was He must receive his wages in Iraqi dinars, equivalent to the US dollar, according to the rates of the Central Bank of Iraq, pointing out that his wages were paid in US dollars for the first two months of work before the issuance of the decision, and accordingly, after the issuance of the decision, his wages were equalized to the equivalent of the Iraqi dinar.
Fandi pointed out that the disaster occurred when he was surprised that his wages were calculated according to the Central Bank of Iraq’s pricing, the highest price of which was 1,320 Iraqi dinars per US dollar, while market prices varied beyond the official price by about 40 dollars, which is the rate of his monthly loss, in addition to the fact that It is difficult for him to transfer Iraqi dinars to his family in Syria, so he is forced to buy dollars on the black market because the ban on dealing prevents him from purchasing hard currency from the Central Bank of Iraq, thus reducing the percentage of remittances sent monthly.
Dima Ibrahim, a worker at a beauty center in Baghdad, explained in a statement to Al-Watan that the decision came after she was in Baghdad for two years, where her wages were in foreign currency, but about four months ago the values of wages and salaries were adjusted so that their wages were converted into Iraqi dinars, equivalent to the US dollar, similar to the riyal. Saudi Arabia and the Emirati dirham, pointing out that since the decision was issued, she has refrained from sending remittances to her family in Syria, due to the large difference in the transfer, adding that if the decision continues to be implemented, she will be committed to her contract, which expires in the first month of next year, and then leave Iraq because the work has become useless as a price for their exile. there.
Professor at the Faculty of Economics at the University of Damascus, Dr. in Monetary and Banking, Ali Kanaan, confirmed that the private sector deals in the Iraqi dinar at the equivalent of the US dollar for non-Iraqi foreign workers, pointing out that this decision will reduce the proportion of foreign workers in Iraq and will negatively affect workers, especially Syrians, in Iraq due to the difficulty Conversion and conjugation difference.
Dr. explained. Kanaan, in a special statement to Al-Watan, said that external transfers must be in foreign currencies, and therefore the worker there will be forced to buy foreign currencies and re-transfer them into Syria, thus losing more than 40 percent of his salary, which will also reflect negatively on external transfers and lead to their decline, in addition to manipulation. What will happen between the employer, the worker, and the bank. For example, instead of the Syrian worker receiving 1,000 Iraqi dinars, his wage must be set at 1,700 Iraqi dinars, so that the 700 dinars are the difference in conversion into hard currency. This rarely happens because it will also cause a loss to the employer.
Regarding the impact of the decision on foreign transfers from Iraq to Syria, Dr. confirmed. Kanaan said that if the decision is implemented, the volume of remittances will decrease by about 40 percent, and Iraq will also witness an exodus of Syrian workers and the search for more profitable opportunities in other places, stressing that this step and this decision are essentially monetary, but they have a political dimension, which is reducing the number of foreign workers in Iraq, and it does not They have nothing to do with fighting inflation at all, and this decision is an unjust measure for the Syrians and violates all international agreements signed between the two countries to respect Syrian workers.
Dr. revealed. Kanaan said that the value of Iraq's oil exports today amounted to 150 billion dollars, while the proportion of Syrian labor wages therein amounted to 700 million dollars. Comparing the two amounts, this step is not monetaryally beneficial for fighting inflation, by calculating labor wages in Iraqi dinars. Rather, they must take more feasible monetary steps.
Dr. called. Kanaan urged the Syrian Foreign Ministry to submit a request to withdraw this decision, because it violates the agreements signed between the two countries regarding paying taxes, transferring profits, protecting investments, protecting workers, and achieving stability for their Syrian workers.
It is worth noting that, last July, the United States prevented 14 Iraqi banks from conducting transactions in dollars, as part of a broader campaign against the illegal use of the dollar.
An economist warns of an imminent disaster due to the dollar ban
link nothing new yet
The legal expert, Safaa Al-Shammari, criticized the Central Bank’s decisions to prevent dealing in dollars and prevent accounts for dollar rounds coming to citizens from abroad, and obliging them to receive them in Iraqi dinars and at the official exchange rate exclusively, stressing that these confusions may bring economic disasters.
Al-Shammari said in a press statement, “Everyone is fully aware that any decision must be issued to meet people’s needs and organize their lives, and these decisions may be the result of a study and examination of those needs on the ground, or the result of events that require an urgent decision regarding which a decision will be issued, and there are decisions.” Unsuccessful issues come from some sectors, and sometimes they are floundering or the result of poor planning and management.”
He explained, “The Central Bank’s decisions to prevent dealing in dollars, prevent accounts for incoming dollar rounds to citizens from abroad, and oblige them to receive them in Iraqi dinars and at the exchange rate specified by it, are a blunder and a blunder.”
He added, asking, “How do we eliminate these confusions?” What are its causes? Why do we see the silence and lack of action of the responsible authorities that have anything to do with following up on those administrations headed by blunderers?”, indicating that “some decisions require the intervention of the primary official in that executive authority to eliminate this strange, strange confusion.”
He continued, “The greatest disaster is when they know that they have issued their confused decisions, and they do not completely retract them, just as they issued their decision completely, but rather evade in a very impudent manner,” stressing that “confusion and randomness in making decisions must have a negative impact, regardless of the size or extent.” That effect,” he concluded his speech by saying, “Confusions may lead to disasters. Is there anyone who can stop those confusions?”
great article but I know it won't get read
The Underbelly Of Iraq’s ‘Economic Boom’
Introduction
Dijlah Village, a sprawling 6,000-square-meter c
The glamour of the luxury development, however, is not enough to hide the glow of the gas flare from the Dora Oil Refinery visible on the other side of the river. As diners pose for photos in front of the fountain, the refinery behind them spews toxic gases, poisoning people and the planet, while also flaring off precious fuel that could be used to provide electricity for ordinary Iraqis. This poignant contrast raises questions about where investments are being made, by whom, and for whose benefit.
Most ordinary enterprises are forced to navigate an economic system dominated by Iraq’s powerful and wealthy political parties.
Not all businesses have the enormous capital that makes Dijlah Village possible. Most ordinary enterprises are forced to navigate an economic system dominated by Iraq’s powerful and wealthy political parties. Drawing on interviews with owners and employees at small and medium-sized businesses, this paper explores the strategies that enable such companies to survive and generate capital. If Iraq’s current economic boom is to avoid an eventual bust, the government and multilateral organizations must develop ways to support such enterprises and remove the many barriers that prevent their growth.
Explosion of Investment
In recent years, Iraq’s political elite and their business associates have preferred to invest their wealth in local projects as a safe haven for ill-gotten gains. This money is made from state coffers. Under the ethno-sectarian apportionment system implemented after 2003, the dominant political parties meet following each election for negotiations to divide up control of government ministries and their corresponding assets. Each major political party controls one or more ministries. As a result, the distribution of lucrative government contracts is heavily influenced by partisan interests. “Economic committees” staffed by party members review ministerial contracts and require a commission to sign off on any deal.
In part to disguise the origins of their illegally obtained funds, the political elite have allegedly taken to investing in upscale residential compounds, malls, private universities, and other real estate ventures, resulting in a “visible boom” in Baghdad's development. However, many of these projects are inaccessible to ordinary Iraqis, who experience numerous economic difficulties. To illustrate, pursuing a dentistry degree at a private Iraqi university costs around $6,000 per year, whereas a meal in Dijlah Village costs an average of 30,000 IQD (around $20) per plate. These expenses starkly contrast with the average monthly salary in Iraq of just $583.
Increasingly, the political elite opt to invest in local projects because of growing restrictions on moving money out of Iraq. Moreover, high oil prices led the Iraqi parliament to approve a budget of $153 billion for 2023, a record amount. This increases the political elites’ access to public money.
A recent Washington Post report indicated that these investments provide a way for the elite to launder money acquired from state entities and government contract manipulation. Some citizens initially appreciated that they were at least getting to enjoy a wider variety of malls and restaurants after many years of insecurity. But attitudes are changing and, increasingly, ordinary Iraqis are starting to see that they are the ones who bear the brunt of rising prices for essential goods and services. As a consequence of the enormous influx of investment into Iraq’s real estate sector, the cost for a single square meter of land in Baghdad, even without access to basic utilities like electricity and water, now exceeds $2,300.
Navigating the System
In a troubling development, however, the political elite is increasingly using its resources and power to assert control over smaller businesses, which creates new challenges for entrepreneurs. A restaurant owner in Baghdad said that “I am already paying bribes to keep my restaurant afloat. When I attempted to expand, I encountered political obstacles that made me reconsider. I chose to abandon the idea, as I am unwilling to be entangled with such associations.”
If Iraq’s current economic boom is to avoid an eventual bust, the government and multilateral organizations must develop ways to support such enterprises and remove the many barriers that prevent their growth.
Striking a delicate balance between achieving business success and avoiding unnecessary attention from political parties means walking a tightrope. Businesses in Iraq must tread carefully to navigate the complexities of the political landscape and safeguard their operations while pursuing growth and profitability. Negotiating the intricate landscape of starting and maintaining a business in Iraq requires a keen understanding of the prevailing political dynamics.
Immense Challenges Facing Businesses
Small and relatively independent companies face immense challenges in acquiring contracts and deals, in contrast to party-connected entities. Business owners interviewed for this paper said that bureaucracy, government indecision, and the unpredictable economic environment pose significant challenges for their ventures. From company registration and tax payments to dealing with customs and logistics, each administrative process is accompanied by its own set of challenges. For example, one interviewee who manages a tech startup said that "the government's inconsistent decisions can greatly impact businesses, especially in sectors that require frequent government interactions." Another entrepreneur who has worked with multiple companies said that "when you start doing business in Iraq, it's not easy. There's much bureaucracy. You need to figure out who holds the power and influence in different sectors. Knowing who to talk to and who to bribe becomes almost essential. It's unfortunate, but sometimes, paying bribes or cutting political deals seems like the only way to get things done efficiently."
Even for powerful international commercial entities operating in Iraq, deals often fall through due to bureaucratic obstacles and endless political interference. A notable recent example is "Al-Rafeel City," which involved the construction of an administrative complex on the outskirts of Baghdad to house government ministries. While the reputable Emirati company Emaar was selected by the Council of Ministers to carry out the project, political interference and demands for bribes ultimately led to the project’s failure. Such practices deter foreign investment and irritate partners. The Emirati ambassador to Iraq had previously raised concerns about corruption in Iraq’s business landscape. Although efforts have been made to streamline and simplify government and bureaucratic procedures, substantial improvements are still needed in order to make the business environment easier to navigate. Indeed, according to the latest World Bank “Doing Business” report, Iraq ranks 172 out of 190 countries in terms of ease of doing business.
Strategies
Interviews with business owners pointed to various strategies that have emerged in response to Iraq’s complex business environment. One approach is to adhere strictly to bureaucratic protocols when establishing a business, which is a challenging yet attainable feat. Under this approach, business owners register their companies, pay their taxes and follow all the rules like they would do in any other country. However, this path often leads to encounters with political entities, armed groups, or their associates who seek involvement in the business. Once faced with those actors, businesses are presented with limited choices: resist and face potential consequences, shut down operations and incur losses, or opt for the seemingly more straightforward route of cooperation with these entities.
The experience of one of Iraq’s e-commerce businesses illustrates this choice. The business has been running for many years, expanding slowly with private investments from both inside and outside Iraq. However, due to bureaucratic hurdles, the volatile political and security landscape, and global economic challenges following the Covid-19 pandemic and the Ukraine crisis, some investors chose to withdraw their support. It came at a bad time, as the business had just expanded, which rendered its operations unsustainable. After a period of struggle, the business had to accept investments from companies and individuals who are connected to Iraq’s political elite in order to continue operations.
Tragically, for many companies, the only workable solution is to play within the parameters of the party-dominated economic system by working with a politically connected agent. These partnerships facilitate relationships with the political elite and ensure smooth business operations. The chosen partner may be a political party or a party-aligned individual or business. This either leads to full alignment with the partner’s interests or the partner acts as a broker that navigates the system on behalf of the business. These partnerships not only facilitate bureaucratic processes but also provide a degree of protection from undue political pressure.
One example of this dynamic involves an international ridesharing company that began operations in Iraq a few years ago. Before launching, they took proactive measures to establish close ties with firms with well-established political affiliations and connections within the bureaucratic framework. This strategic decision was designed to ensure their ongoing presence and business growth in Iraq. Indeed, it was an effective strategy and the company has expanded into multiple governorates across the country.
Conclusion, Policy implications, and Recommendations
Addressing entrenched issues within Iraq's party-dominated economy requires recognition of the challenges that businesses face, including bureaucratic complexity and intricate political dynamics. The government’s failure to create conditions for businesses to flourish has inevitably led to an economy controlled by a select few with privileged access to state resources.
Iraq's white paper offered potential remedies for the hurdles facing businesses, such as reviving the private sector support fund, simplifying bureaucratic procedures for the private sector, and supporting small and medium-sized businesses. However, this effort has been ineffective due to the government's selective approach and lack of implementation. Moreover, while international donors have sought to bolster Iraqi entrepreneurs and promote private sector growth, many of these initiatives have failed to introduce real reforms. Sometimes they had the effect of reinforcing the political elite's stranglehold on the public and private sectors.
Increased transparency within the bureaucracy is an important first step toward reducing bureaucratic hurdles and eliminating the grip of the political elite on Iraq’s economy. The elite’s control over bureaucratic processes stems from a lack of clarity about what procedures businesses must follow, which are often subject to change. Streamlining procedures and implementing digital services will help address this and reduce interference from political actors.
Addressing entrenched issues within Iraq's party-dominated economy requires recognition of the challenges that businesses face, including bureaucratic complexity and intricate political dynamics.
These recommendations can be implemented in several ways. First, the Iraqi parliament should pass an “access to information” law mandating that ministries and governmental bodies must publicly share their data. This would establish a framework of transparency that is immune from manipulation and decrease the politically sanctioned corruption within the ministries.
Second, the government, through the Council of Ministers' Secretariat, should modernize its e-governance infrastructure, with UR platform (the Iraqi government’s digital services center) as a starting point. This will facilitate seamless electronic transactions for businesses and circumvent bureaucratic barriers that are often exploited by the political elite.
Third, international organizations like UNDP can play a positive role by providing support for these initiatives. This includes technical assistance, capacity enhancement, and sharing best practices. To ensure the practical application and sustainability of these proposals, partnerships should be made with reformists within the system. Their involvement will help guarantee effective implementation and long-term viability.
Addressing the core issue of interference by political elites and their exploitation of Iraq's resources is pivotal. If this is not rectified, including in the development of the private sector, businesses that do not have connections will continue to struggle. The urgency of this problem will only increase as demographic and climate pressures grow and more people migrate to the cities looking for work.
The dollar jumps in Baghdad markets and money exchanges to touch 160,000 - urgent
Today, Sunday (October 8, 2023), dollar prices recorded a significant increase in the markets and exchange offices of the capital, Baghdad, to record a record after a slight decline over the past weeks.
The "Baghdad Today" correspondent said, "Selling prices in money exchange shops in the capital, Baghdad, amounted to 159,500 Iraqi dinars for every 100 US dollars, while purchasing prices recorded 157,500 Iraqi dinars for every 100 US dollars."
Private banks are accused of taking over the largest part of the currency selling window, especially for the cash dollar, which has become extremely difficult for travelers to obtain, which forces them to buy the dollar from the parallel market, while the travelers’ share of the dollar in these banks goes for the purpose of speculation.
A parliamentary committee confirms regarding the oil and gas law: It will not pass
A member of the Parliamentary Oil Committee, Bassem Al-Gharibawi, confirmed on Sunday that the political parties agreed to legislate the oil and gas law before the formation of the government and it was placed within the government program, pointing out that the law will not be passed without obtaining political consensus.
Al-Gharibawi told Al-Maalouma, “All laws that are intended to be legislated need political consensus in order to resolve them and then bring them to the House of Representatives to vote on them, whether they are simple or important laws.”
He added, "The oil and gas law is one of the important laws and requires political consensus between the various parties, especially between Baghdad and Erbil, in order to ensure the distribution of wealth and agreement on a number of paragraphs within this law."
He stated that "the agreement to form the government by the political blocs, as well as the government program, included resolving the oil and gas law and putting it to a vote in Parliament."
Al-Gharibawi pointed out that “its draft was prepared within six months of the government assuming its duties, while this period passed and the issue was not resolved.”
Al-Ittihad: Political differences hinder the resolution of the oil and gas law
A member of the advanced cadre of the Patriotic Union of Kurdistan, Ghiyath Al-Surji, confirmed that Baghdad and Erbil do not have real seriousness to resolve the oil and gas issue and solve the problem between the two sides regarding the distribution of wealth. .
Al-Sourji told Al-Maalouma, “There is no seriousness in Baghdad and the region to resolve the outstanding problems regarding the oil file, especially what is related to the oil and gas law, as it was possible to avoid differences through a clause in the constitution that defines the relationship between the two sides regarding this wealth.”
He added, "The National Union has 18 representatives in Parliament, and it calls on everyone to legislate the oil and gas law in order to get rid of the existing crises and disputes over the distribution of wealth between Baghdad and Erbil."
He stated, "There is an urgent need to speed up the resolution of the oil and gas law between Baghdad and Erbil, and he urged Parliament to pass this law and vote on it with everyone's approval, with the aim of ending differences and closing the door to tensions over this matter."
The parallel market has become more powerful.. Chambers of Commerce set 3 points to secure the dollar at the official rate
The exchange rate in the parallel markets is still recording a significant increase compared to the official rate, while the dollar exchange rates in Iraq have not witnessed stability despite the attempts of the government and the Central Bank to control the exchange rate in the parallel (black) markets.
The power of the dollar,
the head of the chambers of commerce in Diyala, Muhammad Al-Tamimi, said in an interview with “Baghdad Al-Youm” that, “about 8 months ago, the Central Bank set an official exchange rate for the dollar, but the truth is that the parallel market has become more powerful, and the difference between them is very high, and it is burdening the shoulders of millions of simple and poor people.” Wondering where the Central Bank’s procedures are.”
Despite the approval of the country's general budget, and the Central Bank selling more than $200 million per day, many questions are being asked about the reason for the continued rise in the exchange rate.
Corruption and complaints
Al-Tamimi added, “The dollar breaking the exchange barrier of 160,000 dinars for every 100 dollars calls for reconsidering the plans of the Central Bank and making changes that contribute to correcting the situation in a way that does not lead to exhausting the markets and raising prices to alarming levels,” pointing out that “even simple measures are taken to secure the dollar.” At the official price for multiple packages, they did not arrive correctly, and there are negatives and corruption, and the complaints are countless.”
Al-Tamimi pointed out that "the Central Bank's efforts to reduce the parallel market are ink on paper. The evidence is that the level of difference between them is very high, and all indicators indicate that prices are on their way up, which means more pressure on the markets."
Prime Minister Muhammad Shiaa Al-Sudani repeatedly confirmed that the exchange rate would decline immediately after the approval of the country's general budget, which was confirmed by many government officials over the past months, but that has not happened so far.
Economic crisis
Yesterday, Saturday (October 7, 2023), Kurdish politician Latif Al-Sheikh warned of a stifling economic crisis as a result of the continued rise in the price of the dollar.
The Sheikh said in an interview with “Baghdad Today” that “two parties are bearing the crisis of the continuing rise in the dollar exchange rate, namely the Central Bank and the Association of Iraqi Banks.”
He added, "The two parties failed to resolve the crisis and profited at the expense of the citizen, who was a victim of the large disparity in the official and parallel prices," noting that "those who benefited were the banks and private companies, and we warn of a catastrophic economic crisis."
Dollar prices are still flying in the parallel market with a large difference from the official exchange rate, as selling prices in exchange shops in the capital, Baghdad, today, Sunday, reached 159,500 Iraqi dinars for every 100 US dollars, while purchasing prices recorded 157,500 Iraqi dinars for every 100 US dollars.
Private banks are accused of taking over the largest part of the currency selling window, especially for the cash dollar, which has become extremely difficult for travelers to obtain, which forces them to buy the dollar from the parallel market, while the travelers’ share of the dollar in these banks goes for the purpose of speculation.
Seizing the dollar and violating the law: The Association of Banks “evades” its duties and remains silent - urgent
Today, Sunday (October 8, 2023), expert in banking affairs, Ahmed Al-Tamimi, criticized the Iraqi Banks Association for not taking any position on what some private banks are working on to illegally acquire the dollar.
Al-Tamimi told "Baghdad Today", "Some private banks are working to illegally seize the dollar. They take the share of the traveling citizen and do not give it to him. Also, some banks refuse to hand over to the citizens the remittances that reach them in dollars, and all of this violates the law."
The expert in banking affairs stated, “The Iraqi Banks Association bears a large part of the illegal behavior that is happening in some private banks, especially since it has not yet taken any role from those banks. Rather, it remains silent and tries to evade its role in following up on the work of those banks.” ".
Private banks are accused of occupying the largest part of the currency selling window, especially for the cash dollar, which has become extremely difficult for travelers to obtain, which forces them to buy the dollar from the parallel market, while the travelers’ share of the dollar in these banks goes for the purpose of speculation.
Economist Sarhang Hussein earlier accused the Association of Private Banks of being behind the rise in dollar exchange rates in the parallel (black) markets.
Hussein told "Baghdad Today", "The process of buying the dollar with cards by merchants and granting these to private banks is behind the rise in the dollar exchange rate again."
He added, "It is clear that private banks do not want the exchange rate to fall, as they are the largest beneficiaries of the advantage granted to them by the Central Bank, as they buy the dollar at the official price, and it is sold to the citizen at a very large difference," holding the "Association of Private Banks responsible."
It is noteworthy that the exchange rate of the dollar in the parallel (black) markets has risen again, as the markets recorded 1,600 dinars per dollar, even though the Central Bank of Iraq sells it for 1,320 dinars.
The dollar is “forbidden” to Iraqis, and a “Jordanian” bank alone accounts for 70% of sales!.. What is the story of the Central Bank?
The million is paid in 6,000 weekly installments
Al-Mansur (Baghdad) 964
The situation was not much different in Baghdad banks on Sunday morning, and procedures for disbursing balances in dollars continued to be halted, as monitored in the Trade Bank branch in the “Babylon” Mall, and learned from depositors in other banks.
The urgent attempts of depositors to withdraw amounts from their balances were unsuccessful, as they fear that the balances will continue to be frozen until the end of the year, and that they will later be forced to spend them in dinars, and according to the official exchange rate
The details:
The bank branch in the mall witnessed a state of chaos this morning, following the protest of dozens of customers demanding the disbursement of amounts of foreign transfers coming into their accounts, or the withdrawal of previously deposited balances.
The manager of the bank branch in the mall informed customers at 11:00 a.m. that the dollar balance in the bank had run out, and said, “The Central Bank did not send reinforcements.”
Customers of other banks in Baghdad are facing the same problems, as the banks are devoid of dollars, with depositors protesting against what they consider “theft operations to take advantage of their balances in the parallel market, or give them to people with influence or authority.”
Number of customers:
We have been checking in daily for more than a month to withdraw our external transfers. We wait for hours and the day ends and we are unable to withdraw our balances.
The bank claims that there is not enough dollar balance. Our transfers are supposed to be insured, so why are they being tampered with?
The branch management claims that the Central Bank does not provide it with sufficient dollar balances, but we see that some depositors have withdrawn their balances thanks to their personal relationships with bank employees.
Anyone who has a transfer worth one million dollars was told to disburse it in weekly payments not exceeding $6,000.
Transfers not exceeding $10,000. No more than $1,000 has been delivered to each depositor for approximately a month.
A source in the bank:
The problem is related to the Central Bank and not to our bank. There is no reinforcement from the Central Bank of the bank’s accounts in dollars.
A source at the Central Bank, to the 964 network:
We send daily reinforcements to banks, but they are not sufficient for the withdrawal requests received from customers.
There are fears among customers that they will not be able to withdraw their balances before the end of the current year and convert them to the Iraqi dinar, which makes them pressure to withdraw them during this period.
Foreign exchange centers from the CBI
In confirmation of what was stated in our Circular No. 3/9/180 on 6/30/2020 and subsequent circulars regarding foreign exchange positions, the most recent of which is our Circular No. 2/9/204 on 3/30/2023, all licensed banks must take into account the foreign exchange positions allowed in accordance with the circulars. Above, in order to avoid the inability to meet your customers’ requests to withdraw the dollar deposited in cash in their accounts open with you, as many complaints have been received regarding non-fulfillment of these withdrawals under the pretext of the existence of instructions issued by this bank preventing this.In this regard, this bank will take into account the complaints received from your customers in this regard and will take the necessary measures against the banks that refuse.To comply with the aboveEconomist: Withdrawing the US Federal Reserve will end the dollar crisis
Former member of the Parliamentary Economics Committee, Abdul Hussein Al-Yasiri, today, Sunday, attributed the reason for the continued rise of the dollar to the American policy towards Iraq.
Al-Yasiri said in a statement to Al-Maalouma: “The solution to the dollar crisis lies in obtaining a portion of the Iraqi funds in the US Federal Bank.”
He added, "The rise in the dollar is due to excess demand and lack of supply, as well as America's policy towards Iraq."
He explained that "the government is required to put pressure on the Fed to provide sufficient cash from the dollar in order to meet the increasing demand and eliminate the so-called parallel market."
During the current period, America has worked to destroy the Iraqi currency by imposing sanctions on Iraqi banks and banning the dollar under many pretexts, which in one way or another led to a severe financial crisis in the Iraqi markets.Specialist: The Central Bank has taken an additional decision that will worsen the exchange rate in the market
An economic expert confirmed today, Sunday (October 8, 2023), that the decisions of the Central Bank of Iraq, especially preventing the delivery of citizens’ transfers in dollars, will exacerbate the rise in exchange rates.
Economic affairs expert Nasser Al-Kinani told Baghdad Al-Youm, “The Central Bank’s decisions regarding confronting the dollar crisis are all patchwork and not real solutions, and these decisions for nearly a year have not resolved the crisis that is worsening day after day.”
He stated that "some of the Central Bank's decisions contributed to the issue of the dollar crisis, especially when allowing some banks to refuse to deliver dollar transfers that reach some citizens," noting that "such measures contribute effectively towards going to the parallel market to buy the dollar, and this worsens the issue and does not solve it." .
The Central Bank of Iraq had confirmed in a statement that its decision to stop cash withdrawals includes only remittances received from outside Iraq according to certain arrangements, and does not in any way include citizens’ balances deposited in US dollars.
We have a dollar, but the withdrawal terrified the banks.” An Iraqi banker’s testimony about Sunday’s chaos
“Customers wanted to clear the account.”
An official at a Baghdad bank gave testimony about the chaos that occurred today, after depositors were inundated with requests to withdraw their money in dollars, indicating that foreign currency liquidity is available, but “the intensity of requests terrified bank officials.”
Today, Sunday, citizens attacked all banks in the capital, Baghdad, in an unprecedented manner, against the backdrop of the Central Bank’s recent decisions to adopt the dinar.
Portfolio officials were concerned about the volume of requests, and decided to wait to disburse them all at once within one day.
The Central Bank reduced the amount of dollars granted to all banks today, and the liquidity in its possession is not sufficient to meet the enormous requests received.
Private banks decided to legalize grants to citizens for fear of zeroing out of their dollar accounts, especially since there is a real fear that citizens will not be able to recover their money in the banks.
In the document.. The Central Bank warns banks against not handing over dollars to citizens
Foreign exchange centers
good greeting .
In confirmation of what was stated in our Circular No. 3/9/180 on 6/30/2020 and subsequent circulars regarding foreign exchange positions, the latest of which is our Circular No. 2/9/204 on 3/30/2023, your banks must take into account the foreign exchange positions allowed in accordance with the above circulars to avoid... The inability to meet your customers’ requests to withdraw dollars deposited in cash in their accounts opened with you, as many complaints have been received regarding non-fulfillment of these withdrawals under the pretext of instructions issued by this bank prohibiting that.In this regard, this bank will take into account the complaints received from your customers in this regard and will take the necessary measures against the abstaining banks.
To adhere to the above...with appreciation
Ali Mohsen Ismail, Deputy Governor
The Central Bank of Iraq warns banks not to deliver the dollar to citizens under the pretext of the bank’s decisions
Iraq announces oil pricing according to current global market data
Today, Sunday, the Ministry of Oil held the monthly meeting for pricing Iraqi oil at the Ministry’s center.A statement from the ministry, a copy of which {Al-Furat News} received, stated: “During the meeting, the agenda and developments in the oil market were reviewed, and the reports prepared by the relevant authorities at the Oil Marketing Company (SOMO) were reviewed.”
He added, "Oil was priced according to current global market data."
The ministry's statement continued, "The meeting was attended by the Undersecretary for Extraction Affairs, Bassem Muhammad Khudair, the Undersecretary for Gas Affairs, Izzat Saber, the Director General of the Oil Marketing Company, and a number of officials in the departments of the Ministry's Center and the Oil Marketing Company (SOMO)."
An economic expert explains to “Sputnik” the repercussions of the Central Bank of Iraq’s decision to ban dealing in the US dollar
Omar Al-Halbousi, the Iraqi economic expert, confirmed that for several years, the Central Bank of Iraq has been issuing decisions, the majority of which reflect negatively on the Iraqi economic reality, which caused an increase in the gap in the dinar’s exchange rate against the dollar.Al-Halbousi added that the Central Bank intends to impose a ban on the use of the dollar at the beginning of next year, which is considered a violation of the law and the constitution.Speaking to “ Sputnik ,” he said that this decision is in violation of Iraqi laws that do not prohibit dealing in dollars in the Iraqi market. This decision, in fact, comes to maximize the banks’ profits at the expense of harming the Iraqi dinar.l-Halbousi pointed out that, for quite some time now, the Central Bank of Iraq has issued decisions that have a significant negative impact on the Iraqi economic reality, causing an increase in the gap in the exchange rate of the Iraqi dinar against the dollar, and a reduction in the value of the Iraqi dinar, which is witnessing a decline, amid the central bank’s inability to maintain On the value of the dinar, which fluctuates up and down due to private banks’ manipulation of the exchange rate, which caused high inflation and a decline in the value of the dinar amid the absence of real solutions to the economic and monetary problems in Iraq.The economic expert reiterated that the approach of the Central Bank of Iraq according to this step is in violation of the laws that do not prohibit dealing in the dollar in the Iraqi market. Rather, such a measure works primarily to maximize banks’ profits at the expense of harming the dinar and bank customers and rising inflation, thus harming the Iraqi economy.Al-Halbousi explained that this step by the Central Bank indicates the confirmed truth about the growing role and influence of private banks with the Central Bank, which will have a negative result and will cause damage and loss to private bank clients, both companies and individuals, as it forces private banks to acquire the dollar at the official exchange rate at Although the market price is large, this causes a very large loss for bank customers.He continued: At a time when private banks are making huge profits as a result of such decisions by speculating in the dollar on the black market, which exacerbates the crisis or problem of the exchange rate, and complicates problems with the US Treasury, which indicated that all banks are leaking dollars to countries imposed on them with sanctions. International via multiple routes.The economic expert pointed out that this decision has negative internal and external repercussions, and will further complicate monetary problems. It will also increase the decline in the value of the Iraqi dinar and exacerbate Iraqis’ distrust of banks and reluctance to deal with them.Al-Halbousi concluded by saying: The impact of the Central Bank’s measures is not limited to the Iraqi interior only, but its effects will extend abroad, as dollar smuggling operations abroad increase through multiple channels through banks, which means the imposition of sanctions from the US Treasury is approaching, which the Iraqi Prime Minister Muhammad Shiaa warned about. Sudanese a few days ago due to the illegal dealings of private banks and their circumvention of sanctions.An official in the Central Bank of Iraq said last Thursday that the bank will work to ban dealing inside the country and that the actual implementation will take place during this month on employee salaries and some other segments, provided that it is fully implemented at the beginning of next year 2024 by banning cash withdrawals and transactions in dollars, in The latest effort to curb the misuse of the country's hard currency reserves for financial crimes and evade US sanctions on Iran.In the same context, last July, the Iraqi Prime Minister announced a barter deal with Iran, but he warned that Washington has not yet granted Baghdad an exemption from paying the $11 billion it owes to Tehran, leaving the money stuck in Iranian accounts in... State-owned Trade Bank of Iraq.As a result, Al-Sudani said that Iran has cut off its gas exports since the beginning of July, and Baghdad's supplies have fallen by more than 50%. After the barter deal, Al-Sudani said that "Iranian gas supplies have resumed" and "will return to the same quantities as they were before."According to a senior political official close to the Sudanese government in Iraq, the barter agreement will see Iraq send 250,000 barrels of crude oil to Iran daily, adding that “the agreement will not violate US sanctions on Iran, as they apply to financial transactions - not barter deals.” However, He said, "Iraq did not officially notify Washington of the arrangement."It is noteworthy that Washington was concerned about Iran's relationship with Iraq, especially with the presence of a large number of Iranian-backed groups in its government and parliament.In turn, in late 2022, the United States tightened procedures regarding Iraq’s access to its foreign reserves held at the Federal Reserve, after suspicion of transferring funds to Iran, Syria, and other entities subject to sanctions. This step led to a decline in the value of the Iraqi dinar and an escalation of popular anger in Iraq.
Government advisor: The Iraq Fund will support private sector participation in vital projects
Adviser to the Prime Minister, Hassan Flamers, confirmed that the Iraq Fund for Development will support the establishment of important and vital projects with the participation of the private sector.
Flamers said that the Iraq Fund for Development, which the Prime Minister directed to be formed and whose allocations were included in the tripartite budget, will support the establishment of projects in the health, education and education sectors, and it will also support private sector investments in these and other sectors.
He added that the fund establishes the participation of the private sector in housing projects as well as providing job opportunities through the establishment of projects in various fields.
He added that projects require manpower to create them as well as to provide their services, and the more projects there are, the more job opportunities appear.
Earlier, Prime Minister Muhammad Shiaa Al-Sudani confirmed receiving requests from the private sector to implement projects within the Iraq Fund for Development, while the Parliamentary Finance Committee indicated that the government had allocated one trillion dinars to the Fund’s projects.
162 MasterCard cards prepared for smuggling were seized at Baghdad Airport
The Baghdad International Airport Port Directorate was able, on Sunday, to arrest two Iraqi travelers carrying 162 MasterCard cards hidden without declaring them.
The Border Ports Authority stated, in a statement, a copy of which was received by {Al-Furat News}, that: “The seizure operation was carried out in joint cooperation between the Customs, the Customs Police and the National Intelligence Service office through careful inspection.”
She added, "A committee was formed, a report was organized to arrest the fundamentalists, and they were referred to the airport police station to take legal measures."
The Iraqi Central Bank warns banks that refuse to provide foreign currencies
The Central Bank of Iraq announced that it may take the necessary measures against banks that refuse to provide hard currency.
This came after the Central Bank received many complaints about banks not providing dollars to depositors, according to CNBC Arabia.
The Central Bank of Iraq warned that it may take the necessary measures against those banks.
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