For those who can't get on OM, and who don't have access to the forum. I will post here the articles I like for the day and some of my thoughts. Check back later
Saleh told the Iraqi News Agency (INA): “Economic policy in general and monetary policy in particular are moving towards a new principle called (monetary sovereignty), which considers the Iraqi dinar the only refuge for exchange, pricing, and coverage of internal transactions.” He added, "It is not permissible for the currency of another country whose monetary policy is subject to pricing and trade exchange operations within the Iraqi economy, and the principle of monetary sovereignty starts from this level."
He continued, "The problem in Iraq is the existence of two exchange markets: the first is the regular one in which exchange takes place through the central bank's platforms, which prices the exchange rate at 1,320 dinars to the dollar as a stable and official price and defends monetary policy." He explained, "The second market is irregular, representing 10% of the trading rate. It is an uncontrolled market controlled by speculators and adds noise to the Iraqi economy as a whole."
He pointed out, "There are two things: The first is commodity diversification, which the government has begun through baskets supporting livelihoods, including the food basket, which has achieved stability in the prices of materials, as well as the medicine basket, a construction basket, and another basket for reserve materials that the Ministry of Commerce will launch soon. These are funded at the official exchange rate and help... Stabilize prices and counteract the noise introduced by the informal market.”
He stressed that "dealing in the dollar (dollarization) and its pricing of the internal economic movement is what is most harmful to the economy, but there is no harm in covering external transactions exclusively and through official platforms."
Saleh pointed out, “On this basis, government policy and the policy of the Central Bank moved towards not relying on one country’s currency in foreign transactions and diversifying those currencies such as the Emirati dirham, the Turkish lira, the Chinese yuan, the British pound, and the euro, in addition to the dollar. This diversification reduces the dollarization of the economy and gives it great independence.”
He stressed, "This diversification can be generalized at the level of selling foreign cash currencies for travel purposes and according to the currency of the country to which one is traveling. This will greatly reduce the demand for the dollar as a single currency in transactions, and the monetary and commodity diversification adds independence to the Iraqi economy."
Regarding Iraq’s steps to provide these currencies, Saleh said, “The monetary authority in Iraq is independent and there is a wide consultation circle between it and the government. This is happening for the first time to open banking arrangements with central banks in countries that have a commercial partnership with Iraq, such as the Emirates, Saudi Arabia, Turkey, and China, and it is possible to cooperate with these countries.” Directly in their national currencies to achieve ease of conversion and exchange to finance trade and the movement of goods, supported by a stable exchange rate of 1,320 dinars, which allows for achieving stability and monetary sovereignty.”
He pointed out, "The demand for foreign currency is linked to the demand for goods and external transactions. It is dangerous to use the dollar to cover internal transactions, and monetary double-dealing has harmed Iraq. This must end, and it does not mean not providing foreign currency to citizens for the purposes of financing foreign trade or for the purposes of travel and tourism. Therefore, there are steps." This is a major regulatory change aimed at achieving diversification through agreement with several countries with which transactions are conducted.”
He stressed, "The state has large commercial arms, and whenever it finds that there are needs affected by secondary market noise, the commercial apparatus intervenes to expand its dealings, supported by a stable exchange rate, as well as in cooperation with Iraqi merchants."
Regarding the government’s steps to strengthen the banking system, the Prime Minister’s advisor said, “There is a large team headed by the Prime Minister that directly supervises the reform of the banking system, and the largest system is the government system, whose assets dominate 85% of the assets of the banking system in Iraq, so the reform begins with government banks.” We are working on this seriously, and during the next 6 months the results of this reform will appear, and there will also be work in parallel to reform the private banking system, and there is a strong movement and cooperation in this direction with the associations of private and Islamic banks.”
He stressed, "The Prime Minister's philosophy confirms that economic reform cannot be achieved without reforming the banking system, and therefore the priority begins with reforming the financial system."
Thedinarwillrecover.. Iraq is approaching an “imminent end” to the dollar crisis before the end of 2023
Today, Monday (November 27, 2023), the Parliamentary Finance Committee commented on the possibility of the Iraqi government succeeding in controlling the dollar by the end of the current year.
Committee member Moeen Al-Kazemi told Baghdad Al-Youm, “The government and the central bank are working to end the dollar crisis once and for all, and there is great progress in this file and there is control over the market, as well as a gradual decline in exchange rates in the parallel market.”
Al-Kadhimi added, "We expect that the new year will witness a significant decline in dollar prices with the rise in the value of the Iraqi dinar, especially with the presence of government decisions and directives to address all the causes of the dollar crisis, and we expect that economic and financial stability will be strongly present at the beginning of next year."
Earlier, a senior official in the Central Bank of Iraq told Reuters that the country will ban cash withdrawals and transactions in dollars as of January 1, 2024, in the latest effort to limit the misuse of the country’s hard currency reserves in financial crimes and evade US sanctions on Iran. .
Mazen Ahmed, Director General of the Investment and Transfer Department at the Central Bank of Iraq, told Reuters that the aim of the step is to stop the illegal use of about 50 percent of the $10 billion cash amount that Iraq imports annually from the Federal Reserve Bank in New York.
This step comes as part of a broader campaign to stop the economy's dependence on the dollar after residents began to prefer the US currency over thedinar.
Ahmed said that people who deposit dollars in banks before the end of 2023 will be able to withdraw money in dollars in 2024. But dollars deposited in 2024 can only be withdrawn in the local currency at the official rate of 1,320 dinars to the dollar.
Official price
Ahmed said, "You want to transfer money? To do so. You want a card in dollars? Here you are. 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... but don't talk to me about dollars in cash anymore."
Iraq has already created a platform to organize bank transfers that make up the bulk of demand for dollars, and which has served as a hotbed for counterfeit receipts and fraudulent transactions that have leaked dollars to Iran and Syria, which are under US sanctions.
Ahmed stated that this system, which was put in place in coordination with the authorities in the United States where Iraq's reserves of $120 billion from oil sales are kept, is now almost airtight and provides dollars at the official rate to those who engage in legitimate trade activities such as importing food and consumer goods.
But he said that the misuse of cash withdrawals continues in ways that include travelers who are officially entitled to $3,000 but are looking for ways to circumvent the system.
Iraq relies heavily on its good relations with Washington to ensure that the country's oil revenues and funds are not subject to American oversight.
Dollar shortage
Many local banks have already limited cash withdrawals in dollars over the past few months, exacerbating shortages that have caused the exchange rate to continue to rise in the parallel market.
Ahmed said that some banks are suffering from a shortage of dollars because many people are trying to withdraw at the same time in light of a feeling of unease about the financial system, while some banks are also suffering from a shortage because they provided loans denominated in dollars that were then repaid in dinars.
He added that the Central Bank of Iraq also limited the amount of dollars it provides as part of an agreement with the US Central Bank to limit cash liquidity and shift to electronic payments.
Ahmed pointed out that the Iraqi Central Bank expects thedinar to lose more of its value as the new measures enter into force, but he added that this is an acceptable side effect of formalizing the financial system, noting that the Iraqi Central Bank provides dollars at the official exchange rate for all legitimate purposes.
He said that the cost that Iraq is bearing today is not compared to the value of achieving this goal.
Ahmed stated that the financing operations that are carried out transparently and legally through the bank and at the official rate are the most important and therefore nothing else matters, even if the exchange rate reaches 1700.
He continued, saying, "The cost we bear now is nothing compared to achieving this goal, in all honesty, as long as the legitimate channels are established. What matters is even if the exchange rate reaches 1,700... because the legitimate purpose is the official price."
We will bid farewell to the cash.” The Sudanese talks about switching to the electronic payment system
they do this every year it doesn't mean the RV is happening
Al-Rasheed Bank, today, Tuesday (November 28, 2023), directed all its branches to stop credit activities for the purpose of starting to prepare the final budgets.
The bank stated in a statement received by “Baghdad Today”, that “due to the approaching end of the current financial and credit year and for the purpose of directly preparing the final budgets, Al-Rasheed Bank directed all its branches to stop receiving and promoting transactions for all credit activities and for all sectors, as of Thursday, corresponding to 11/30/2023, provided that it is completed.” Suspension of grants to all credit sectors at the end of official working hours on Thursday, 12/10/2023.
The bank indicated, according to the statement, that “promotion and granting of credit will resume early next year.”
Iraq intends to reduce dollar dealings with Türkiye
The visit of the Iraqi government delegation to Turkey aims to reduce dollar transactions in trade between the two countries, in exchange for promoting dealing in other foreign currencies such as the euro and the lira.
According to a source in the Central Bank, this step comes within the framework of reforming the bank’s financial sector.
The Iraqi government delegation includes a financial advisor to the Prime Minister, three central bank officials, and directors of 12 Iraqi banks. Today, Monday, talks will be held in Turkey with a number of Turkish financial and banking institutions.
A source at the Central Bank said that the Iraqi delegation will discuss with Turkish financial officials the use of currencies other than the dollar in trade between the two countries, as Iraq and Turkey have a lot to ease pressure on the dollar and resort to other currencies.
The source added: In addition to the dollar, the delegation will also discuss trade in the Turkish lira, the euro and other foreign currencies.
According to official Iraqi media, the delegation will visit Turkey for three main issues: opening transfer accounts in Iraqi banks in various foreign currencies and facilitating the use of electronic currency cards for Iraqi tourists and citizens residing in Turkey, in addition to organizing trade between them.
The source added that the Iraqi delegation will discuss how to facilitate financial transactions between the two countries within the framework of the central bank reform plan.
Finance: Calculating additional working hours for employees after official working hours
The Ministry of Finance informed all ministries of calculating additional working hours for employees after official working hours, and during rest days and working days on official holidays for employees that the Ministry needs to work during these times for no more than 21 hours per week
JP Morgan expands its corporate banking activities in Abu Dhabi
JP Morgan Bank said, on Monday, that it is working to expand its payments and corporate banking activities in Abu Dhabi, the capital of the United Arab Emirates, after obtaining regulatory approval .
The UAE is competing with Saudi Arabia to be the preferred destination for economic activity as the region gradually moves away from dependence on oil .
The bank said that the Financial Services Regulatory Authority granted initial approval to JP Morgan Bank to upgrade its license to the first category .
Jamie Dimon, the bank's CEO, said in statements from New York that were broadcast at the Abu Dhabi Finance Week forum in the Emirates, on Monday: “We continue to add to the team this year and have submitted an application to upgrade our license to a full Category 1 bank... The size of the opportunity is here. ”
JP Morgan said it plans to take deposits and provide payment processing services to wholesale banking clients from Abu Dhabi Global Market, the financial center of the emirate of Abu Dhabi .
The bank had established a legal entity in the Abu Dhabi Global Market in 2021 under the name JP Morgan Middle East, and has had a physical presence in the UAE for more than ten years
Coordination with the Treasury and the Federal Reserve
Today, Friday, the Governor of the Central Bank of Iraq, Ali Al-Alaq, announced the start of importing dollars into the country through the accounts of Iraqi banks abroad, and while he indicated the end of the procedures for opening accounts in the UAE dirham and the understanding with Turkey to make transfers in the euro or the Turkish currency, he revealed a broad plan to reform and develop private and government banks.
The podcast for this blogpost is below
Meeting with the US Treasury and the Federal Reserve
Al-Alaq said in an interview with the official agency, followed by the 964 network , that “the Central Bank of Iraq is in constant communication with the US Treasury Department and with the US Federal Bank,” indicating that “this communication continues permanently, and there are quarterly meetings held to review all related matters within the framework of this relationship.” “.
He added, “There is a meeting that will be held at the beginning of next month as part of the periodic quarterly meetings held between the Central Bank, the Federal Bank, and the Ministry of Treasury, where in these meetings we review all matters with emphasis and focus on the issue of regulating external transfer in a way that ensures the safety of the financial system, especially after the implementation of the new transfer system.” external, which requires a lot of coordination.”
He stated that “these developments that have occurred are radical and not formal developments within the framework of reorganizing trade on sound foundations and organizing external transfer on sound foundations,” explaining that “the details related to this issue require coordination and joint cooperation between the Central Bank and those parties.”
He stressed that “the next meeting will be in the Emirati city of Dubai,” pointing out that “there are quarterly meetings in addition to emergency organizational meetings or communications via phone or video.”
Agreement to strengthen banks with dollars
He stated that “the Federal Bank agrees with the Central Bank on the need for them to be removed from the process of conducting the executive aspects of the external transfer, and their role is limited to supervision and control, and this is normal in central banks that do not exercise these executive roles or detailed operations with regard to external transfer, and therefore the plan was The agreement between us is for the Central Bank of Iraq and the Federal Bank to exit these procedural processes,” stressing, “a plan has been developed to shift the external transfer process from the electronic platform that will be completed at the beginning of next year.”
He pointed out, “Creating a new relationship between Iraqi banks and internationally accredited correspondent banks abroad, where the process is confined between them, and the role of the Central Bank of Iraq and the US Federal Reserve is the process of monitoring and supervision, and we began some time ago trying to find a relationship between correspondent banks and our Iraqi banks.”
Opened more than 40 bank accounts
He stated: “We have greatly succeeded in this context, and we were able to open more than 40 accounts for Iraqi banks with correspondent banks or abroad.”
Diversify currencies
He stated, “To increase flexibility and facilitation in the external transfer process, we have diversified the currencies in which transfers are made abroad, and we now have transfers in addition to the dollar, euro and UAE dirham.”
Understandings for making transfers through Turkish banks
He stressed that “the procedures have been completed for opening accounts in the dirham, the Chinese yuan, and the Indian rupee,” pointing out that “there are preliminary understandings with the Turkish side to make transfers through Turkish banks in the euro or the Turkish currency.”
He stated that “this issue is important and is being conducted in coordination with the Federal Bank and the US Treasury, and they are helping us in this,” noting that “this is the opposite of what some understand as an escape from the pressures of the Federal Bank regarding the dollar, as these currencies are covered by the dollar and we buy them from the dollars in the bank.” The Federal Bank, which is not far from the Federal Bank, but rather with the coordination and support of the Federal Bank, as it wants to reach with us the desired goal, which is to have a relationship between Iraqi banks and correspondent banks.”
He stated, “This is happening for the first time by opening this number of accounts for our banks, and it is a very important step to strengthen the banking system in Iraq, because accepting these banks means that they now have systems capable of being accepted internationally,” explaining that “any correspondent bank currently accepts By opening an account with an Iraqi bank after ensuring that this bank has the necessary systems, standards, conditions and rules under which it operates.”
Completion of work on the electronic platform
Al-Alaq confirmed that “this will lead to the end of work on the electronic platform in 2024,” explaining: “We have reached an advanced level, and with the completion of the other episodes, we will leave this method.”
He stated, “In this case, operations will be faster, easier, and more disciplined, because these internationally accredited correspondent banks have complete systems for conducting audit and monitoring operations before implementing this operation.”
Processing rejected transfers gradually
Al-Alaq pointed out that “this will gradually reduce the percentage of rejected transfers,” pointing out that “rejection of transfers has reasons, but the banks and transferring persons will learn the conditions and points that must be taken into account when submitting a transfer request, as there are formal issues, for example, coding and numbering, and there are documents.” What is required and reviewed by the final beneficiary is that there be well-known companies, reasonable prices, etc., and over time the importer or the person requesting the request gets used to adapting or providing the requirements for the transfer.”
The fact that the American side reduced the amount of dollars
He stated, “The Federal Reserve and the US Treasury respond to all requests related to the process of providing and strengthening the dollar Iraq needs by following sound rules and standards for the movement of funds,” explaining that “this serves the interest of the two countries and rids the financial system of any suspicious operations such as money laundering and terrorist financing operations, so money What is available abroad is Iraqi money that has no restrictions, but there are requirements and standards, whether it is in the dollar currency or even if it is in European currencies or other currencies, and these have become among the required rules in all cases.”
He continued, "Some believe that if this money were in another country, it would be without restrictions, but these have become international standards followed, even if it was in euros, yuan, or pounds sterling, and there will be the same business rules."
Expanding the diversification of foreign transactions for all Iraqi banks
He stated, “Our goal is that all banks must have correspondent banks, and we emphasized this issue years ago, as a bank that does not have correspondent banks cannot carry out its real work and is cut off from the world,” explaining that “some banks are late to this.” There were easy methods available, so some did not bother to work seriously on this issue, but now all banks have realized that there is a necessity, so they began to intervene successively.”
He continued: “All that provides the bank is the correspondent bank’s belief that it has the system required to control the movement of funds, provide conditions, and follow international standards, and the presence of a monitoring system on the issue of money laundering and terrorist financing will enter this field,” noting that “some banks have begun seeking the assistance of specialized international companies.” To organize these aspects until they become qualified.”
Import of various currencies comes into effect
He pointed out that “import operations in various currencies have entered into force. For example, they were initiated some time ago with the Chinese side and the euro, and the UAE dirham will begin next week.”
We aim to reduce the demand for the dollar
He stated, “These measures aim to reduce the pressure on the demand for the cash dollar, as we want all importers to carry out import operations through fundamental external transfer, but some trade in Iraq does not follow this path, but rather goes to put pressure on the dollar cash present in the market.” Therefore, the imbalance occurs in the price, that is, it results from the presence of groups that put pressure on the cash exchange, while there are correct and fundamental procedures for transfer available,” declaring, “We are working with the government to eliminate the episodes that put pressure on the cash exchange rate, and we found a group of categories, for example, some deal With the cash dollar inside Iraq, the government issued a decision not to deal in the dollar locally. As for the second class, they are the merchants who import some materials and do not enter the platform or transfer in the proper manner, as we began to analyze these categories, such as the cigarette trade, which takes the dollar from the market by 100 percent, as well as We began to analyze the materials that enter Iraq, such as some mobile phones and other materials. A decision was issued stating that these materials must have proof that they entered Iraq based on a formal external transfer. If these goods do not carry an official formal transfer, this means that they are goods that entered illegally. “.
Follow the market
He stated, “There will be follow-up operations in the market, and even in the warehouses, to ensure that these materials enter based on an official transfer so that we keep them away from pressure on the dollar cash market. We will expand this to other categories, and any category that we find is carrying out non-fundamental transfers or by paying... Cash, we will besiege it.”
Iraqi remittances in dollars
He pointed out that “the general principle is what was approved by the Council of Ministers that trading or payment inside Iraq is in dinars, but there are cases that are being studied at the present time, and there was a meeting in the Ministry of Planning regarding contracts in their various forms and how to make payment options, whether in dinars or dollars.” A group of proposals were put forward and we are now studying them,” noting that “some types of contracts or obligations with foreign companies previously will continue to be dealt with in dollars, and we are studying other cases to develop the best or most appropriate method for them.”
He pointed out that “in the past, inward transfers did not matter to the beneficiary if they were given in dinars, but now, because of the price difference, it is a temporary solution and we are working to solve the problem radically.”
The mechanism for private banks importing dollars
Al-Alaq announced the start of importing dollars into the country from the accounts of Iraqi banks abroad, explaining that “the supply of dollars from abroad comes from what is in the accounts of Iraqi banks abroad. For example, we have an account in a bank, so we can withdraw it in cash or a check, and it is transferred in cash, and it has interest on it.” That the amounts come internally instead of externally.”
He explained that the Central Bank’s instructions will not allow the bank to keep a large amount of foreign currency abroad, as there are certain percentages, in addition to preventing misuse of this currency coming into the country, and we have set rules for its use.”
He warned that “the Central Bank is studying the request of the bank that supplies the dollar and its needs before giving approval and verifying the source of the amount and even the transporting company, in addition to verifying the uses of this amount.”
He pointed out that “because of the price difference, there was pressure on banks to withdraw their balances or transfers received from the dollar, which led to some banks becoming scarce in the currency,” explaining that “foreign currency can be available in more than one way, not only through the central bank, We seek to deepen this practice.”
He stated: “As long as our Iraqi banks have balances abroad in foreign currencies, it is better for us to enter it, and this supports the reserves in the central bank, that is, instead of the bank using its foreign currency reserves, the currency will be available from the banks’ accounts, and this is an important point.”
A study to restructure banks in Iraq
Al-Alaq stressed that “there is a broad reform plan for private banks with mergers and correction operations in some of their situations, and there is a broad plan for government banks, some of its details will be announced, and we are working with Prime Minister Muhammad Shiaa Al-Sudani on this matter,” pointing out that “government banks represent the largest weight in the sector.” Banking, and we must put it in the best possible way.”
Central Bank Governor: There is a broad reform plan that includes merging private banks and correcting their conditions
Today, Friday, the Governor of the Central Bank of Iraq, Ali Al-Alaq, announced the start of importing dollars into the country through the accounts of Iraqi banks abroad, while indicating the end of the procedures to open accounts in the UAE dirham and the understanding with Turkey to make transfers in the euro or the Turkish currency, and revealed a broad plan to reform and develop private and government banks. .
Al-Alaq said in an interview with the official agency, “The Central Bank of Iraq is in constant communication with the US Treasury Department and with the US Federal Bank,” noting that “this communication continues permanently, and there are quarterly meetings held to review all related matters within the framework of this relationship.”
Al-Alaq added, “There is a meeting that will be held at the beginning of next month as part of the periodic quarterly meetings held between the Central Bank, the Federal Bank, and the Ministry of Treasury, where in these meetings we review all matters with emphasis and focus on the issue of regulating external transfers in a way that ensures the safety of the financial system, especially after the system is implemented.” "What's new is external transfer that requires a lot of coordination."
He stated, “These developments that have occurred are radical developments and not formal ones within the framework of reorganizing trade on sound foundations and organizing external transfer on sound foundations,” explaining that “the details related to this issue require coordination and joint cooperation between the Central Bank and those parties.”
Al-Alaq confirmed that “the next meeting will be in the Emirati city of Dubai,” pointing out that “there are quarterly meetings in addition to emergency organizational meetings or communications via phone or video.”
He stated, “The Federal Bank agrees with the Central Bank on the need for them to be removed from the process of conducting the executive aspects of the external transfer and their role is limited to supervision and control. This is normal in central banks that do not exercise these executive roles or detailed operations with regard to external transfer, and therefore they were The plan and agreement between us is for the Central Bank of Iraq and the Federal Bank to exit these procedural processes, confirming the development of a plan to shift the external transfer process from the electronic platform that will be completed at the beginning of next year.”
Al-Alaq pointed out, “Creating a new relationship between Iraqi banks and internationally accredited correspondent banks abroad, where the process is limited between them, and the role of the Central Bank of Iraq and the US Federal Reserve is the process of monitoring and supervision, and we began some time ago trying to find a relationship between correspondent banks and our Iraqi banks.”
He stated, "We have greatly succeeded in this context, and we were able to open more than 40 accounts for Iraqi banks with correspondent banks or abroad."
He stated, "To increase flexibility and facilitation in the external transfer process, we have diversified the currencies in which transfers are made abroad, and we now have transfers in addition to the dollar, the euro, and the UAE dirham."
He stressed that "the procedures have been completed for opening accounts in the dirham, the Chinese yuan, and the Indian rupee," pointing out that "there are preliminary understandings with the Turkish side to make transfers through Turkish banks in the euro or the Turkish currency."
He stated, "This issue is important and is being conducted in coordination with the Federal Reserve and the US Treasury, and they are helping us in this," noting, "This is the opposite of what some understand as an escape from the pressures of the Federal Bank regarding the dollar, as these currencies are covered by the dollar and we buy them from the dollar in the currency market." The Federal Bank, which is not far from the Federal Bank, but rather with the coordination and support of the Federal Bank because it wants to reach with us the desired goal, which is to have a relationship between Iraqi banks and correspondent banks.”
He stated, "This is happening for the first time by opening this number of accounts for our banks, and it is a very important step to strengthen the banking system in Iraq, because accepting these banks means that they now possess systems capable of being accepted internationally," explaining, "Any correspondent bank Currently, it is accepted to open an account with an Iraqi bank after ensuring that this bank has the necessary systems, standards, conditions and rules under which it operates.”
Al-Alaq stressed, “This will lead to the end of work on the electronic platform in the year 2024,” explaining, “We have reached an advanced level, and with the completion of the other episodes, we will leave this method.”
He stated, "In this case, operations will be faster, easier, and more disciplined, because these internationally accredited correspondent banks have complete systems for conducting audit and monitoring operations before implementing this operation."
He pointed out, "Our goal is that all banks must have correspondent banks, and we emphasized this issue years ago, as a bank that does not have correspondent banks cannot carry out its real work and is cut off from the world," explaining that "some banks delayed... For this, easy methods were available, so some did not bother to work seriously on this issue, but now all banks have realized that there is a necessity, so they began to intervene one by one.”
He continued, “All that provides the bank is the correspondent bank’s belief that it has the system required to control the movement of funds, provide conditions, and follow international standards, and the presence of a monitoring system on the issue of money laundering and terrorist financing will enter this field,” noting that “some banks have begun seeking the assistance of specialized international companies.” To organize these aspects until they become qualified.”
Al-Alaq confirmed, “There is a broad reform plan for private banks with mergers and correction operations in some of their situations, and there is a broad plan for government banks, some of its details will be announced, and we are working with Prime Minister Muhammad Shia al-Sudani in this regard,” pointing out, “Government banks represent the weight.” The largest in the banking sector, and we must develop it as best as possible.”
Central Bank Governor: Washington responds to all that Iraq needs in terms of dollars and a meeting with it next month
Central Bank Governor Ali Al-Alaq announced that the Federal Reserve and the US Treasury are responding to all requests for the dollar Iraq needs.
Al-Alaq said in a press interview that “the Iraqi Central Bank will hold a meeting with the US Treasury and the Federal Reserve early next month in Dubai,” noting that “radical steps will be taken within the framework of reorganizing trade on the right foundations,” noting that “the electronic platform will be completed early next year.” .
He noted that "the Central Bank will exit the process of conducting the executive aspects of the external transfer and its role will be limited to supervision, and we have worked to create a new relationship between Iraqi banks and internationally accredited correspondent banks abroad."
He continued, "We succeeded in opening more than 40 accounts for Iraqi banks with correspondent banks abroad, and we developed radical solutions to end speculation and dollar smuggling operations, and we were able to diversify currencies in transfer operations abroad."
Al-Alaq stated that “import operations in Chinese yen and euros have been in effect for some time and import operations in UAE dirhams will begin next week,” stressing that “there are preliminary understandings with the Turkish side to make transfers through Turkish banks in the euro currency.”
He pointed out that "the US Federal Reserve provides support in creating a relationship between Iraqi banks and correspondent banks," noting that "the operations of opening accounts for Iraqi banks are happening for the first time, and that the rejection of transfers on the electronic platform has begun to decline and there are no restrictions on Iraqi funds abroad."
Al-Alaq went on to say, "We began supplying the dollar into the country from the accounts of Iraqi banks abroad. The supply of the dollar comes from what is in the accounts of Iraqi banks abroad, and the Central Bank is studying the request of the bank that is supplying the dollar and its needs before giving approval."
He explained, "The supply of the dollar supports the reserves in the Central Bank, and there is a broad reform plan that includes the merger of private banks and correcting their conditions. The Central Bank is working with the government on a broad plan to develop government banks, which represent the largest weight in the banking sector."
He revealed the diagnosis of some merchants who are pressuring the dollar currency in the market without following the fundamental import processes, and the government is working to eliminate the episodes that put pressure on the cash exchange rate, pointing out that “the government issued a decision that it is not permissible to deal in the dollar locally, while studying the exception of some cases.”
Al-Alaq concluded his speech by saying, "There will be follow-up operations in the market and commercial stores to ensure that they entered with an original external transfer, and there will be besiegement operations for every group that puts pressure on the cash dollar in the market."
Exchange companies are back operating and demand will decrease - an expert explains the decision to sell the dollar at the market price
Economist Manar Al-Obaidi said on Thursday that the new central bank decision allowing banks and exchange companies to sell the dollar at the market price, excluding their share of the currency window, will reduce the volume of demand in the parallel market.
Al-Obaidi in a statement:
The decision will help exchange companies return to work.
Only the dollar purchased from the Central Bank will be sold for 1,320 dinars, while the dollar purchased from travelers or other sources can be sold at the market price.
The decision will contribute to saving the dollar, especially since many travelers return with hard currency, and it could also contribute to reducing the demand for the dollar in the parallel market.
The mechanism for differentiating between the dollar received from the Central Bank and the dollar coming from other parties is possible through data submitted by exchange companies that own a share in the dollar window, to prove the sale of this share at the official price.
Formal measures can also be taken to monitor the implementation of the decision.
The end of the current world.. Dubai hosts an investment conference for Iraq
The Iraqi-British Business Council is preparing to hold its conference in Dubai next December 7-8, with the aim of strengthening partnerships and driving economic transformation in Iraq, according to the Emirati newspaper Al-Khaleej.
Dr. Thani bin Ahmed Al Zeyoudi, Minister of State for Foreign Trade, will deliver a speech during the second day of the conference, under the title “Building a Sustainable Future.”
Undersecretary of the Ministry of Economy for Foreign Trade Affairs Abdullah Al Saleh said, “We join our friends from Iraq and the Iraqi Business Council to discuss joint efforts to assist the country in the reconstruction process.”
The conference will bring together companies working in the field of business and trade, to enhance investment for businessmen, and ultimately support the industry and the Iraqi people.
Al Saleh added: We support the Council’s mission to enable the transfer of technology, infrastructure and expertise to Iraq to enhance its growth and development.
According to the conference management, the significant growth in trade between the UAE and Iraq, which exceeded 60% in 2022, confirms the growing economic relations between the two countries.
The event confirms the UAE's position as the main commercial center of Iraq, and showcases the country's growing role in facilitating international cooperation.
The UAE is seen as a meeting place for everyone from the UK, EU and US to India, Turkey, Iraq and the Gulf.
The UAE also has tremendous potential for investment in Iraq and for companies operating there, without the need for administrative and bureaucratic jobs that can be obtained in Iraq.
Managing Director of the conference, Christophe Michels, explained that the UAE is considered an ideal place, given its role as a regional center linking international companies to Iraq.
Michels added: Many of our members also have headquarters in Dubai, and we expect this conference to have the importance of attendance that decision makers appreciate, and our members expect to communicate with important people.
The conference is being held at an important time, as it addresses pivotal issues such as economic sustainability, education, finance, and climate change.
Vikas Handa, the UAE representative in the council at the regional level, says: The conference is expected to be of great importance for the development and outlook of Iraq in the long term.
A conference on tax reform in Iraq will be held on the sixth of next month
On the sixth of next December, a conference on tax reform in Iraq will be held under the auspices of Prime Minister Muhammad Shiaa Al-Sudani.
The conference’s media committee said in a statement: “In implementation of the government program to reform the tax system, the tax reform conference in Iraq will be held in Baghdad on the sixth of next December under the auspices of Prime Minister Muhammad Shia’ al-Sudani, and in line with the government’s plans to achieve comprehensive development and economic advancement, and create A transparent and fair tax system that raises the level of administrative performance and employee skills, corrects imbalances in the work environment, and reduces the tax burden on taxpayers.”
The statement added, "The conference will put at the forefront of its objectives, strengthening Iraq's position in international classifications, amending tax legislation that is not friendly to the business environment, facilitating procedures and adopting governance, reconsidering tax and customs policies in light of the market economy, creating investment opportunities, providing job opportunities that generate sustainable income, and spreading Tax culture in a way that is reflected in improving services.”
He pointed out that many researchers and specialists from state institutions, the private sector, public and private universities, and civil society organizations will participate in the conference. The
media committee for the tax reform conference, according to the statement, called on “the Iraqi media to participate in this national endeavor and support the goals of the conference in the service of the public interest.
Parliamentary Finance talks about a measure by the Central Bank: the only way to stabilize exchange rates
Today, Friday (November 24, 2023), the Parliamentary Finance Committee considered that the Central Bank of Iraq has come a long way in restoring exchange rate stability, considering that addressing the dollar problem will not be achieved without diversifying sources of foreign currencies.
The head of the committee, Atwan Al-Atwani, said in statements to the government news agency, followed by “Baghdad Today,” that “diversifying the sources of foreign currency dependence in commercial transactions is the only way to address the problem of the increasing demand for the dollar.”
He added, "The Central Bank has come a long way in its mission to restore market stability, get rid of the dominance of the dollar, strengthen the Iraqi dinar, and bring it into the line of global commercial transactions."
He stressed "the importance of this approach as it is an effective solution and a thoughtful strategy to open new horizons that ensure facilitating commercial transactions procedures at various levels," noting that "we renew our full support for the steps of the Central Bank of Iraq as it moves steadily towards developing real solutions to the crisis."
Earlier, the Central Bank took several measures to increase the number of Iraqi banks to which external transfers are available, by opening accounts for them in a number of correspondent banks in a number of countries, especially Jordan and the Emirates.
The procedures included opening accounts in the Chinese yuan, the Indian rupee, the euro, and the UAE dirham, in order to allow trade exchange in the currencies of the countries that export most to Iraq, such as India, China, and the UAE.
The highest among the Gulf countries.. The Arab Monetary Fund expects the Iraqi economy to grow by 4.5%
The head of the Parliamentary Finance Committee, Atwan Al-Atwani, confirmed today, Friday, that the Central Bank has come a long way in the mission of restoring market stability and getting rid of the dominance of the dollar.
Al-Atwani said in an interview followed by “Al-Ma’louma” that “diversifying the sources of foreign currency dependence in commercial transactions is the only way to address the problem of the increasing demand for the dollar.”
He added, "We stress the importance of this trend as it is an effective solution and a well-thought-out strategy to open new horizons that ensure the facilitation of commercial transaction procedures at various levels."
He continued, "We renew our full support for the steps of the Central Bank of Iraq as it moves steadily towards developing real solutions to the crisis."
Al-Atwani: We look forward to new steps that will restore stability to the market and end the problem of exchange rate fluctuations
The head of the committee, Atwan Al-Atwani, said in a statement, a copy of which was received by NRT Arabia, that “diversifying the sources of reliance on foreign currencies in commercial transactions is the only way to address the problem of the increasing demand for the dollar, and to create a parallel market for selling hard currency.”
He explained, “By responding to our previous call in this regard, by starting to open various windows to deal in other foreign currencies and adopting the (clearing) system in trade exchange with various countries, it has come a long way in the mission of restoring market stability and getting rid of the dominance of the (dollar).” And strengthening the strength of the Iraqi dinar and its entry into the line of global commercial transactions.”
Al-Atwani stressed, according to the statement, the importance of this trend as an effective solution and a well-thought-out strategy to open new horizons that ensure the facilitation of commercial transactions procedures at various levels.
He pointed out, renewing full support for the steps of the Central Bank of Iraq, as it moves steadily towards developing real solutions to the crisis, while we look forward to other steps that will restore stability to the market and end the problem of exchange rate fluctuations and increasing demand for the dollar.
Al-Alaq: Our communication continues with the US Federal Reserve and the US Treasury
The Governor of the Central Bank, Ali Al-Alaq, confirmed the continuation of communication between the Central Bank of Iraq, the US Treasury, and the US Federal Bank, indicating that the beginning of next month will witness a new meeting between the three parties.
Al-Alaq said in a statement that the Central Bank of Iraq is in continuous communication with the US Treasury Department and with the US Federal Bank, indicating that “this communication continues permanently, and there are quarterly meetings held to review all related matters within the framework of this relationship.” He added that “there is a meeting that will be
held At the beginning of next month, within the periodic quarterly meetings held between the Central Bank, the Federal Bank, and the Ministry of Treasury, during these meetings we review all matters with emphasis and focus on the issue of regulating external transfer in a way that ensures the safety of the financial system, especially after the implementation of the new external transfer system, which requires a lot of coordination.
He stated that “these developments that have taken place are radical and not formal developments within the framework of reorganizing trade on sound foundations and organizing external transfer on sound foundations,” explaining that “the details related to this issue require coordination and joint cooperation between the Central Bank and those parties.” He stressed
that “The next meeting will be in the Emirati city of Dubai,” noting that “there are quarterly meetings in addition to emergency organizational meetings or communications via telephone or video communication.”
He stated that “the Federal Bank agrees with the Central Bank on the necessity of them being removed from the process of conducting the executive aspects of the external transfer, and their role is limited to supervision and control, and this is normal in central banks that do not exercise these executive roles or detailed operations with regard to external transfer, and therefore the plan was The agreement between us is for the Central Bank of Iraq and the Federal Bank to exit these procedural processes, confirming the development of a plan to transfer the external transfer process from the electronic platform that will be completed at the beginning of next year.”
He pointed to creating a new relationship between Iraqi banks and internationally accredited correspondent banks abroad, where the process would be limited between them, and the role of the Central Bank of Iraq and the US Federal Reserve would be the process of monitoring and supervision, and we began some time ago trying to find a relationship between correspondent banks and our Iraqi banks.
Central Bank Governor: There is a broad reform plan that includes merging private banks and correcting their conditions
Today, Friday, the Governor of the Central Bank of Iraq, Ali Al-Alaq, announced the start of importing dollars into the country through the accounts of Iraqi banks abroad, while indicating the end of the procedures to open accounts in the UAE dirham and the understanding with Turkey to make transfers in the euro or the Turkish currency, and revealed a broad plan to reform and develop private and government banks. .
Al-Alaq said in an interview with the official agency, “The Central Bank of Iraq is in constant communication with the US Treasury Department and with the US Federal Bank,” noting that “this communication continues permanently, and there are quarterly meetings held to review all related matters within the framework of this relationship.”
Al-Alaq added, “There is a meeting that will be held at the beginning of next month as part of the periodic quarterly meetings held between the Central Bank, the Federal Bank, and the Ministry of Treasury, where in these meetings we review all matters with emphasis and focus on the issue of regulating external transfers in a way that ensures the safety of the financial system, especially after the system is implemented.” "What's new is external transfer that requires a lot of coordination."
He stated, “These developments that have occurred are radical developments and not formal ones within the framework of reorganizing trade on sound foundations and organizing external transfer on sound foundations,” explaining that “the details related to this issue require coordination and joint cooperation between the Central Bank and those parties.”
Al-Alaq confirmed that “the next meeting will be in the Emirati city of Dubai,” pointing out that “there are quarterly meetings in addition to emergency organizational meetings or communications via phone or video.”
He stated, “The Federal Bank agrees with the Central Bank on the need for them to be removed from the process of conducting the executive aspects of the external transfer and their role is limited to supervision and control. This is normal in central banks that do not exercise these executive roles or detailed operations with regard to external transfer, and therefore they were The plan and agreement between us is for the Central Bank of Iraq and the Federal Bank to exit these procedural processes, confirming the development of a plan to shift the external transfer process from the electronic platform that will be completed at the beginning of next year.”
Al-Alaq pointed out, “Creating a new relationship between Iraqi banks and internationally accredited correspondent banks abroad, where the process is limited between them, and the role of the Central Bank of Iraq and the US Federal Reserve is the process of monitoring and supervision, and we began some time ago trying to find a relationship between correspondent banks and our Iraqi banks.”
He stated, "We have greatly succeeded in this context, and we were able to open more than 40 accounts for Iraqi banks with correspondent banks or abroad."
He stated, "To increase flexibility and facilitation in the external transfer process, we have diversified the currencies in which transfers are made abroad, and we now have transfers in addition to the dollar, the euro, and the UAE dirham."
He stressed that "the procedures have been completed for opening accounts in the dirham, the Chinese yuan, and the Indian rupee," pointing out that "there are preliminary understandings with the Turkish side to make transfers through Turkish banks in the euro or the Turkish currency."
He stated, "This issue is important and is being conducted in coordination with the Federal Reserve and the US Treasury, and they are helping us in this," noting, "This is the opposite of what some understand as an escape from the pressures of the Federal Bank regarding the dollar, as these currencies are covered by the dollar and we buy them from the dollar in the currency market." The Federal Bank, which is not far from the Federal Bank, but rather with the coordination and support of the Federal Bank because it wants to reach with us the desired goal, which is to have a relationship between Iraqi banks and correspondent banks.”
He stated, "This is happening for the first time by opening this number of accounts for our banks, and it is a very important step to strengthen the banking system in Iraq, because accepting these banks means that they now possess systems capable of being accepted internationally," explaining, "Any correspondent bank Currently, it is accepted to open an account with an Iraqi bank after ensuring that this bank has the necessary systems, standards, conditions and rules under which it operates.”
Al-Alaq stressed, “This will lead to the end of work on the electronic platform in the year 2024,” explaining, “We have reached an advanced level, and with the completion of the other episodes, we will leave this method.”
He stated, "In this case, operations will be faster, easier, and more disciplined, because these internationally accredited correspondent banks have complete systems for conducting audit and monitoring operations before implementing this operation."
He pointed out, "Our goal is that all banks must have correspondent banks, and we emphasized this issue years ago, as a bank that does not have correspondent banks cannot carry out its real work and is cut off from the world," explaining that "some banks delayed... For this, easy methods were available, so some did not bother to work seriously on this issue, but now all banks have realized that there is a necessity, so they began to intervene one by one.”
He continued, “All that provides the bank is the correspondent bank’s belief that it has the system required to control the movement of funds, provide conditions, and follow international standards, and the presence of a monitoring system on the issue of money laundering and terrorist financing will enter this field,” noting that “some banks have begun seeking the assistance of specialized international companies.” To organize these aspects until they become qualified.”
Al-Alaq confirmed, “There is a broad reform plan for private banks with mergers and correction operations in some of their situations, and there is a broad plan for government banks, some of its details will be announced, and we are working with Prime Minister Muhammad Shia al-Sudani in this regard,” pointing out, “Government banks represent the weight.” The largest in the banking sector, and we must develop it as best as possible.”
A government advisor explains the mechanism for selling the dollar outside the central bank platform
The financial advisor to the Prime Minister, Mazhar Muhammad Saleh, explained the aim of the Central Bank’s circular today regarding trading the dollar from outside the platform according to supply and demand, indicating that it will provide high flexibility in supply that contributes to market stability.
Saleh explained in a press statement, “Liberating the operations of buying and selling foreign exchange is not an alternative to the policy of defending price stability and the government’s plan to interfere in the stability of the general level of prices.”
Saleh added, “Families, natural and legal persons in Iraq are hoarding amounts of cash in foreign currency and outside the banking system amounting to billions of dollars and are subject to two phenomena. The first is the difficulty of managing their circulation outside the laws of supply and demand that create the currently free exchange rate due to deterrent legal controls and the second is the contraction of a large money supply from Liquid foreign currency, which has stopped moving in the form of a cash hoarding that is immobile and outside the circle of supply.”
He continued, "This exacerbates exchange rate fluctuations under the influence of (a liquidity trap in foreign currency resulting from an expected positive wealth due to the rise in the value of foreign exchange against the local currency)."
Saleh added, “Therefore, liberalizing the climate of dealing in foreign currency and giving it a white character will provide high flexibility in supply that contributes to reducing noise in the secondary exchange market, which provides a flexible supply of foreign exchange that leads to market stability, supported by a government policy that provides commodity supply through the official price.” “For highly stable exchange and financed at an exchange rate of 1,320 dinars per dollar.”
A Sudanese advisor reveals the goal of the reform plans for the financial and banking system
other social media quotes him as Sudanese media advisor Hisham Al-Rikabi: The battle for the dollar is almost over
Today, Friday (November 24, 2023), the media advisor to the Prime Minister, Hisham Al-Rikabi, revealed the goal of the reform plans for the financial and banking system undertaken by the government and the Central Bank of Iraq.
Al-Rikabi said in a tweet on the (X) platform that the plans aim to “build strong foundations for economic stability and pave the way for creating a suitable climate for investment.”
On the 14th of this month, Prime Minister Muhammad Shiaa Al-Sudani directed the directors of all government banks to prepare a plan to be presented within one month, to develop the work of banks that includes the optimal use of financial, human and technical resources, moving from paper work to automated work, electronic dealing with all banking activities and expanding... Electronic payment services, developing a comprehensive vision for banks in granting credit facilities and loans, and developing work mechanisms, including control and oversight tools.
Al-Sudani confirmed during a meeting that included the Minister of Finance, the Governor of the Central Bank, and directors of government banks that “bank directors will be subject to a performance evaluation in light of their implementation of the plan and the amount of achievement.”
He stressed that "the real reform that the government was keen to achieve is based on banking reform, and it is determined to take bold decisions in order to implement this reform in a way that contributes to improving the investment environment and developing the work of the public and private sectors."
@HushamHamad The reform plans for the financial and banking system undertaken by the government and the Central Bank of Iraq aim to build strong foundations for economic stability, pave the way for creating a suitable climate for investment, and end the eras of illegal trade, dollar smuggling, and speculative operations in the market. In short, the battle for the dollar is nearing its end.
The dollar continues to rise, causing prices to rise and further loss of the value of the dinar, without real solutions.
The dollar crisis is a policy crisis of the continued American threat of sanctions, accompanied by the continued bleeding of the currency by private banks that are protected by some influential people, and this conflict is paid for by the citizen.
A change must be made in the Central Bank of Iraq system because all the solutions developed by the Central Bank during the last period did not achieve any results, which means that there is a deficiency in vision, a lack of understanding of the nature of the problem, and a lack of experience.
Monetary and financial policies are confused and unclear, and a balanced policy must be followed and close cooperation and coordination between the financial and monetary policies must be restored, away from uncalculated interventions and political influences, which will contribute to maintaining the stability of the Iraqi currency exchange rate, controlling inflation, and stabilizing price rates to maintain a stable standard of living for the citizen.
The external or internal investor will not risk any project in light of the fluctuation of currency exchange rates. All monetary, financial and economic tools must be used to control the money supply in the Iraqi market and direct the monetary mass towards financing investment projects and keeping it away from speculation.
Solutions exist, and during our tenure at the Ministry of Finance (2006-2010), we succeeded in increasing the value of the dinar from (1,500 dinars to the dollar to 1,170 dinars to the dollar). We were planning to reach (1,000 dinars to the dollar) and then raise the zeros so that the dinar was equal to the dollar.
The greatest fear is the rise in the inflation rate, which was our main concern and we succeeded in reducing it from 67% to about 4% in 2010, a rate that has not been achieved throughout Iraq’s financial history.
