Statement of the Iraq Economic Contact Group of the G7, European Union and World Bank
Statement of the Iraq Economic Contact Group of the G7, European Union and World Bank
December 2023
On December 12, the Iraq Economic Contact Group (IECG) held the final meeting of 2023, co-chaired by Italy and the United States. As friends and partners of Iraq, Canada, France, Germany, Italy, Japan, the European Union, the United Kingdom, the United States, and the World Bank commit to supporting Iraq in the implementation of a comprehensive and ambitious reform agenda, paving the way to sustainable and inclusive economic development.
The IECG is eager to strengthen its engagement with the Government of Iraq (GOI) through regular dialogue at both the political and technical level. This engagement is crucial to streamline cooperation between the two sides, identify and support common goals, and support the GOI’s priority reform areas. The IECG commends Prime Minister Mohammed Shiaa al-Sudani for appointing business and economics experts within his office and looks forward to collaborating with them.
The IECG was encouraged
by Prime Minister Sudani’s announcement of new economic reform initiatives throughout 2023 and the passing of a historic three-year budget that laid the foundation for implementation of the government’s reform agenda. In October, Iraq gained membership to the European Bank of Reconstruction and Development (EBRD) – a move strongly supported by the IECG as the first step to unlocking new sources of investment and enhanced cooperation with other multilateral and bilateral financial facilities.
In the past month, the government convened conferences on Public Private Partnerships (PPPs) and tax reform, including a new bank sector reform project with Rafidain Bank. Further, the GOI recently announced the establishment of the Iraq Fund for Development (IFD) alongside the Development Road project, and the Prime Minister strengthened economic ties with regional partners. The GOI’s efforts to expand the use of digital platforms for financial transactions, with electronic payment and other e-commerce mechanisms, represent important steps to minimize the informal economy and reduce opportunities for corruption.
Looking ahead to next year, the IECG welcomes further cooperation in support of Iraq’s economic and financial sector development, including Prime Minister Sudani’s policies to strengthen the dinar and oversee monetary policy. Clear communication of new dinar policies during the transition period will help avoid adverse effects on Iraqi households and businesses as well as on development cooperation projects and foreign investments in Iraq.
The IECG also stands ready to support Iraq’s next steps to becoming an EBRD Country of Operations, its journey toward World Trade Organization accession, and its potential partnership with the European Investment Bank (EIB). EIB’s expertise in road, railroad, water and sanitation investments, climate action, environmental sustainability financing as well as urban transmission initiatives will accelerate key infrastructure measures and help facilitate a green transition.
The IECG urges further attention in 2024 to address the deficit and public sector wage bill, measures that would improve fiscal resilience. Timely budget execution will be critical to the GOI’s ability to sustain important infrastructure investment, particularly in expanding domestic power generation, distribution, and expansion of green energy. Long-term sustainable economic development is contingent on a dedicated response to pressing climate and environmental challenges. Sustained investment in water management and infrastructure is critical to counteract the debilitating impacts of climate change.
To accelerate private sector growth, the IECG encourages government action to identify and address the challenges faced by domestic and international business, including efforts to promote transparent and predictable regulations. In this vein, we welcome further progress on the PPP, Companies, Industrial Investment, Customs, and Arbitration laws as well as timely implementation of the recommendations from the recent PPP and tax reform conferences.
On January 1, Italy and the United States proudly hand over the IECG to incoming co-chairs France and the United Kingdom. Under their leadership, the IECG will continue to support an ambitious reform agenda, promote sustainable economic development, and stand by Iraq’s side as a reliable friend and partner in 2024.
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Romanowski: A fruitful meeting of the seven countries on ways to support Sudanese reform
Romanowski published in A blog post on “X” showed pictures from the meeting, saying: “A fruitful meeting with the ambassadors of the Iraq Economic Liaison Group in the G7, where ways were discussed to support the reform agenda of the Sudanese Prime Minister, strengthen the strong private sector, attract investment, and increase opportunities.” “I am honored to be the head of the group in cooperation with the Italian ambassador and to hand over the presidency to the British ambassador and the French
Association of Banks: The battle with dollar speculators has reached its final round
The Iraqi currency exported...to where?
The Iraqi currency issued is the banknotes issued by the Central Bank for circulation (i.e. printed), with the exception of cash in the vaults of the Central Bank, and is usually found in the vaults of local banks, and in the possession of citizens. The size of this monetary mass depends on the economic situation in Iraq, from Where the growth of the gross domestic product, the speed of monetary circulation, and the level of prices therein, however, the monetary data of the Central Bank of Iraq confirm that the increase in the volume of the monetary mass exported does not fall under the influence of the usual economic factors, which were mentioned above, but rather is controlled by the political mood and random trends. The monetary policy pursued by the Central Bank and the Ministry of Finance, despite the Central Bank’s claim that the quantities of Iraqi currency are printed according to the needs of the Iraqi economy and within strict standards.
If we took a look at the volume of cash issued in previous years until this year, and according to the data of the Central Bank of Iraq, we would find a steady, unnatural increase in the volume of printing of the Iraqi dinar, which is not at all commensurate with the need and growth of the Iraqi economy, especially in the last five years, which was recorded in the last three years. The last of which is the pinnacle of printing.
Monetary data:
Data on the issuance and printing of the Iraqi dinar, by year, showed the following:
January 2004: 6 trillion and 189 billion dinars
As of 2/2013 AD: 36 trillion and 845 billion dinars
K2/2014 AD: 40 trillion and 786 billion dinars
K2/2019 AD: 44 trillion and 374 billion dinars
K2/2020 AD: 51 trillion and 964 billion dinars
K2/2021 AD: 68 trillion and 948 billion dinars
K2/2022 AD: 78 trillion and 206 billion dinars
K2/2023 AD: 93 trillion and 511 billion dinars
November 2023 AD: 102 trillion and 601 billion dinars
The Iraqi dinar in Iraqi banks in October 2023: 9 trillion 37 billion dinars
Source: Central Bank of Iraq website/statistical website/monetary sector, www.cbi.iq
Notes:
1- About 40 trillion dinars were issued during a period of 10 years, from 2/2004 AD, until 2/2014 AD, which is the period after the occupation, when a new Iraqi currency was printed, and this printing came to meet the market’s need, in accordance with the economic controls and mechanisms followed. about this.
2- The size of the issuance amounted to about 44 trillion dinars in February 2019, that is, a difference of 4 trillion Iraqi dinars over the period between February 2014 and February 2019, which took 5 years, with a growth rate of about 10%, and this issuance volume is the size of Printing minus the amount of destruction, and this limited increase in edition is consistent with the economic reality that Iraq has experienced due to the ISIS crisis.
3- From the beginning of 2019 AD until the beginning of 2020 AD, which is the period between Iraq’s emergence from the ISIS crisis and its entry into the Corona pandemic (Covid-19), which is the period of economic recession in Iraq, the volume of dinar issuance increased from about 44 trillion, to about 52 trillion dinars, with a difference About 7.5 trillion dinars, and the reason for resorting to this size of issuance may be the growing hoarding tendencies among citizens, due to the Corona virus, and the high rates of smuggling abroad, which led to a reduction in the monetary supply in the markets, and the increasing government demand for the dinar for the purpose of public spending.
4- The year 2020 AD is considered the year of the pandemic and economic recession, as the government imposed the economic closure, and the price of Iraqi oil fell below 20 dollars, so the government was forced at the end of it (December) to take the decision to deflate the dinar from 1,190 dinars to the dollar, to 1,460 dinars, and it appears This measure was not sufficient to cover the general budget deficit, so the government printed large quantities of dinars, until the volume of issuance reached 69 trillion dinars at the beginning of 2021 AD, and this means printing about 17 trillion dinars during the year 2020 AD.
5- The three years, from 2021 AD until the end of 2023 AD, were characterized by excessive issuance and printing of the local currency, as the volume of issuance increased from about 69 trillion dinars in January 2021 AD, to about 102 trillion dinars in November 2023 AD, an increase of about 33.5 trillion AD. These are the years that followed the decision to deflate the Iraqi dinar, and coincided with the imposition of the electronic platform on the Central Bank of Iraq, by the Financial Crimes Office of the US Department of the Treasury, which restricted the transfer of dollars that were smuggled to neighboring countries, led by Iran, through bank transfers. The Central Bank of Foreign Affairs, which led to smuggling operations being directed to local markets, causing a major and chronic imbalance in the dollar exchange rate in Iraq, from which Iraq is still suffering.
6- The printing of the dinar, in this huge quantity, in the last three years, in light of the aforementioned circumstances, came to meet the market need, and to compensate for the shortage in the local currency, which was under pressure, due to the decision to deflate on the one hand, and smuggling operations on the other hand, so it added a reason. Another is due to the high rates of inflation in Iraq, and this printing did not come due to the rapid circulation and circulation of the currency, to meet the needs of development and production, and this is an economic dilemma in itself.
7- The size of the monetary mass exported in October 2/2023 is about 102 trillion dinars, and the volume of what banks have of it is about 9 trillion in October 1/2023.. This means that there are about 93 trillion dinars in the possession of citizens, and in the markets, and it has appeared Reports and news, recently, indicate the loss of trillions of Iraqi dinars from Iraqi markets, and their smuggling to neighboring countries, but the Central Bank of Iraq denied that news, and claimed that the printing of the Iraqi currency comes according to the needs of the Iraqi economy and within strict standards, which is inconsistent with The reality of the situation... there is an actual shortage in the Iraqi monetary mass in the local markets, and the Central Bank also has, as evidenced by its delay in sending the Kurdistan region’s dues due to the shortage in the availability of its local monetary mass, and the printing of cash does not come in accordance with the needs of the Iraqi economy, as the Central Bank claims, as The economy did not witness growth in the gross domestic product in parallel with the high levels of currency printing, and the local markets did not witness tangible economic activity in conjunction with this steady increase in the printing of the dinar. Rather, the opposite is the case with the markets, as they suffer from a lack of cash and a lack of its circulation. Accordingly, the central bank does not He prints the dinar for local economic needs, but rather to compensate for the deficit resulting from smuggling operations, which he is, essentially, the main reason for their implementation and sustainability, without taking real deterrent measures to eradicate them.
8- The reasons for the lack of local monetary supply in Iraqi markets are many. Smuggling to neighboring countries, especially Iran, comes at the top of those reasons, and in conjunction with the smuggling of the dollar, in order to complete the smuggling cycle, without the need to exchange them for goods and benefits from outside the country. Inflation and deflation of the local currency also push the citizen to search for a safe haven for his dinar savings, in order to protect them and reap profits, so he buys the dollar, or gold and hoards it, or invests in stock exchanges, cryptocurrencies, and others, which was not the economic habit of Iraqis previously. Because of the stability of the local currency’s exchange rate at the time, perhaps the most dangerous thing in this area is that the citizen enters the spiral of “expectation inflation.” Whenever the citizen feels that his local currency will lose its purchasing power over time, he will experience future expectations of the dinar’s contraction, so he resorts to hedging. And constantly getting rid of its local monetary mass, this will cause a chronic contraction of the dinar and a chronic and continuous rise in inflation, and the prices of goods and utilities. This is the most severe dilemma in the world’s economies: that inflation is chronic and structural, as it will push the economy into chronic inflationary stagnation, which is difficult to address in the long term. Perspective.
Conclusion
The printing of the local currency (the Iraqi dinar) began since the restructuring of the Central Bank after the occupation, and it was carried out according to the needs of the Iraqi economy in its early days. However, printing has increased rapidly and steadily in the last five years, not to meet the needs of the economy, but rather to provide a mass of cash prepared for smuggling, and in plain sight. The government's reputation and financial management.
The dinar was subjected to deflation due to the smuggling of the dinar and the dollar. This burdened the Iraqi economy and exposed it to chronic inflation. It created in the citizen an estranged expectation of his local currency, and he began seeking to get rid of it by investing it in safe havens, thus changing his character that he had previously become accustomed to when he hoarded the dinar. He saves it, for its strength and stability.
The continuation of smuggling operations brings with it an excessive increase in the printing of the dinar, which will suffer from a noticeable and chronic contraction, in conjunction with high rates of prices and inflation, in light of a stagnant economy, in which cash is not invested for the sake of development and production, but rather for cash exchanges aimed at profit through organized, semi-organized smuggling operations. Officially... This situation will create a state of coexistence for the citizen with his local currency, in which he loses confidence. This path has a clear direction, as it is heading towards an inflationary stagnation.
I recommend stopping the printing of local currency, planning to withdraw excess currency from local markets, and taking a bold, clear and immediate step to prevent the smuggling of dollars and dinars to neighboring countries, especially to Iran, and to stop taking cartoonish measures that are used to cover up major corruption operations, under the guise of addressing problems. Monetary and financial matters in Iraq, and being satisfied with this amount of laughing at the chins of the Iraqis, and paying attention to the interests of the people.
2024 Is it the year of economic rescue?
A few days and a page in the life of time has turned.
A year of attempts to correct the blurry picture of our national economy ends, to be followed by a year that we hope will be a year of rescue. Economic from the structural distortions that afflict the Iraqi economy.
The axiom that we economists rely on in our readings of the economic scene is summed up (that expectations are based on indicators) occurring on the ground regarding economic phenomena, whether negative or positive.
Hence, our expectations for the year 2024 are determined based on our assessment of the indicators for the year 2023.
The achievement achieved during the past year (2023) falls within a realistic assessment of attempts at economic reform that is acceptable compared to the size of The challenges and problems that the economy is suffering from are a positive indicator according to this perspective. However, the ambition is to raise the economy to an average level during this specific period in order to keep pace with global development. In any case, it is an encouraging step. One of the indicators that makes us somewhat optimistic is that the steps of the government team in this field are beginning to become clear, although they are very slow due to the size of the problems.
The launch of a number of service projects suggests that success awaits us in this important part of With hospital, school, road and bridge projects, some of which we hope to reap the fruits of in the first quarter of 2024, and thus our prediction is sound based on this indicator. However, we have reservations regarding measures related to expanding the benefit from these projects ( Complementary procedures) so that the planning is 100 percent sound, so we evaluated the achieved achievement at an acceptable level.
To clarify this point of view, I cite an example: road, bridge and bridge projects had to be accompanied by a decision to stop the car import chaos, in order to The achievement will be of clear economic feasibility. Otherwise, what is the benefit of these projects with the increasing number of cars? The problem will remain. We need to reconsider our trade policy in general, especially in luxury goods.
With regard to hospitals, it is necessary to prepare, develop and expand medical competencies in proportion to the expansion of hospitals and the rate of population increase. Schools also need to reconsider the educational level of students and the level of teaching staff. Thus,The government’s orientations appear to be positive and its plans are highly ambitious. In this case, we need a national will and legislative capabilities to support these orientations. However, what is observed and to be honest is that the routine and complexities of the legislative authority sometimes stand as a stumbling block, for political reasons, unfortunately.
We need to be aware of the necessity of keeping political differences away from attempts to save the country’s economy, because the achieved achievement is counted for everyone afterward, first and foremost. From this standpoint, we expect that it will be There is a glimmer of hope that the year 2024 will be the year of implementation of the promising government program in this important field and the basic part that we have discussed, provided that it is supported by the legislative authority so that the picture is complete and the national will is achieved, to build a sound homeland and a healthy economy.
Economist: Dollar smuggling operations are taking place in full swing... and the beneficiaries are the banks belonging to the parties
Economic affairs researcher Diaa Al-Mohsen expressed his astonishment at the Central Bank of Iraq's search for support from the US Federal Reserve regarding the bank's policy towards Iraqi banks.
Al-Mohsen said in a press interview seen by Taqadum that “it is surprising that the Central Bank is looking for support from the US Federal Reserve to support the bank’s policy towards Iraqi banks, and this is described as a mistake,” pointing out that “any decision from the Federal Reserve to lift support will make the Central Bank face a problem.” This requires that the bank’s policy be a consistent policy.”
He added, “The Central Bank has always been an independent body, and therefore it must not follow others by relying on support policies from abroad,” noting that “the bank’s policies must be based on the Iraqi reality, and not by seeking support from the Federal Reserve.” American or European banks, stressing that the Iraqi Central Bank’s policy must emanate from within the Iraqi economy.”
Al-Mohsen added, “Talk about the compliance of the Iraqi banking system with regard to limiting money laundering operations, is taking place in full swing, in addition to the continuation of foreign currency smuggling operations,” pointing out that “many banks belonging to political parties or under their protection are those who have benefited.” From some of the bank’s procedures, these banks reaped a lot of profits, especially through the currency selling window.”
He continued, “What is also surprising is that the Rafidain Bank, which is one of the oldest Iraqi banks, does not rely on the correspondence process with foreign banks to cover financial and commercial needs, instead of insisting on going to foreign banks, despite the fact that most of these private commercial banks have taken It publishes its annual data and indicates the presence of large losses, with most of them in the currency selling window, with no contribution from them within the Iraqi economy.
Al-Mohsen stated, “As long as private commercial banks begin importing dollars from abroad and with the approval of the Central Bank, the exchange rate will not fall below the level of 1,500 Iraqi dinars, given that there are shipping and protection costs, and it is also possible that there will be counterfeit currencies, and therefore the value of these counterfeit currencies will be set.” On the weight of the correct currencies, and this will lead to an increase.”
Al-Mohsen concluded his speech by saying, “The Central Bank is avoiding the truth when it denies the existence of a black market for the dollar, and now it admits its existence.”
Al-Barti: The political agreement included passing the oil and gas law
On Saturday, the head of the Kurdistan Democratic Party parliamentary bloc, Vian Sabri, favored legislation of the oil and gas law during the current session.
Sabri said in an interview with the Maalouma Agency, “Discussions are ongoing between the political parties in order to resolve the oil and gas law to move towards legislating the law within the dome of Parliament.”
She added, “The relevant committees continue their work to resolve the law and send it to the House of Representatives, noting that the oil and gas law, which is one of the most important provisions of the state administration coalition agreement.”
She explained that “the oil and gas law will be legislated during the next stage according to the political agreement to form the Sudanese government.”
The Parliamentary Oil and Energy Committee had previously confirmed that work is continuing by the government and political parties in order to resolve the oil and gas law, overcome obstacles, and give priority to the public interest to move towards legislating the law within Parliament.
The most prominent of which is Japan... a list of countries and banks that have a share of Iraq’s foreign debt
Iraq's total external debt reached $22.6 billion by the end of 2022, according to World Bank data.
According to the data, Japan came as Iraq's largest creditor with a share of 27%, while the share of the International Bank for Reconstruction and Development reached 18% of the total debt, while the share of the United States of America reached 7% of this external debt.
List of Iraqi external debts:
Earlier, Advisor to the Prime Minister for Financial Affairs, Mazhar Muhammad Saleh, indicated that no failure had been recorded in the timing of debt repayment in more than a decade.
According to World Bank data, Iraq's total external debt reached $22.6 billion by the end of 2022
Iraq's total external debt reached $22.6 billion by the end of 2022, according to World Bank data.
According to the data, Japan was the largest creditor of Iraq with a share of 27%, while the share of the International Bank for Reconstruction and Development reached 18% of the total debt, while the share of the United States of America reached 7% of this external debt.
Earlier, the Advisor to the Prime Minister for Financial Affairs, Mazhar Mohammed Saleh, indicated that no failure had been recorded in the timing of debt repayment in more than a decade.
The government is spending 133 trillion dinars from the current year’s budget and revealing the status of employees’ salaries for the new year
Member of the Parliamentary Finance Committee, Mustafa Al-Karawi, said in a press interview that “delaying the budget releases does not affect employees’ salaries,” indicating that “salaries have been fully secured.”
Al-Karaawi added, “About 130 trillion Iraqi dinars were spent out of the total budget amounting to 199 trillion dinars.”
A member of the Parliamentary Finance Committee pointed out that “delayed projects are among the government’s obligations, and will be proceeded with after disbursing all investment budget allocations.”
For his part, economic affairs specialist Safwan Qusay said in a press interview, “The cessation of oil exports in the Kurdistan region affected Iraqi revenues, but the rise in oil prices in recent months made up for the shortfall.”
Qusay added, “The monthly spending rate is approximately seven trillion dinars, while the budget was built on the basis of 15 trillion dinars, meaning there is an excess in spending.”
The economic affairs specialist pointed out that “the money spent is 80% of the operating budget, and the financial abundance is rotated, given that the budget is for three years.”
Earlier, the Parliamentary Finance Committee confirmed that entering the new year 2024 will not stop the disbursement of funds from the tripartite budget, given that it was approved for three years, while indicating that the committee is awaiting schedules from the government related to spending for the new year.
The head of the committee, Atwan Al-Atwani, said in a statement to the official agency, last week, that " The committee approved a tripartite government budget, and there is no interruption to spending and disbursement, given that the approved budget is for (3) years to ensure the continuation of spending, contracting, and the continuity of the government’s work throughout its years without faltering, as happened in the past, which led to the budget being delayed for more than 6 months.
He added, “With regard to the 2024 budget, the committee is communicating with the government while awaiting its schedules, and it is possible to complete the issue as soon as possible with the aim of sending it to the House of Representatives to vote on it.”
Parliamentary Economy: 350 million tons of Iraq’s sulfur reserves
interesting time to be pointing out sulfur reserves imo
The Committee on Economy, Industry and Trade in the House of Representatives revealed that Iraq possesses a strategic reserve of sulfur estimated at 350 million tons.
The committee’s rapporteur, Yasser Al-Husseini, said in an interview with “Al-Sabah”: “Al-Iqtisad News” followed him, saying that Iraq has a strategic reserve of raw materials that are not available in other countries, such as sulfur, phosphate, and silica, and it is almost the first to have them, noting that these minerals can be benefited from to be the country’s second resource after oil, by investing them in a real way with solid companies. And specialized in this matter.
He pointed out that government resources must be in purely national hands, and therefore the contracts in the Ministry of Industry and the Border Ports Authority, which are an important resource for the country, must be reviewed, indicating that investment projects were limiting the state’s resources and not enhancing them in a real way.
Al-Husseini stressed that the government must pay attention to the issue of migration from the countryside to the city and pay attention to the agricultural sector by benefiting from every drop of water from the time it enters Iraq until it reaches the root, warning of a demographic change that will cost the government more than the amounts it currently provides to care for the reality of the villages and countryside, explaining Supporting agriculture will cast a shadow over the stability of the local market and reduce imports in hard currency from countries, in addition to reducing unemployment.
This article has been posted in many places with different title and in different parts of the arab world
Dollar restrictions weigh on Iraq daily life
link from Kurdish news
Oil-rich Iraq is hardly short of dollars -- it has foreign currency reserves of more than $100 billion (93 billion euros).
In Iraq's southern city of Basra, Al-Harith Hassan has been struggling to withdraw his salary in dollars for months as the government tries to curb the country's addiction to US currency.
"When we go to withdraw our salary, they only give us a fraction of it, in instalments," said Hassan, who is paid in dollars for his oil field logistics job.
Oil-rich Iraq is hardly short of dollars -- it has foreign currency reserves of more than $100 billion (93 billion euros).
But in its fight against a booming currency black market, Baghdad has imposed ever-tighter restrictions on the use of American bucks.
For people like Hassan, this can mean a severe cut in his earnings.
Logistics officer at a foreign oil compnay Al-Harith Hassan withdraws cash from an ATM in Iraq's southern city of Basra, Dec. 8, 2023. (Photo: Hussein Faleh/AFP)
This is a translation of what that sign says:
To TBI ATM customers every day
We inform you that an amount of 250,000 Iraqi dinars is being withdrawn
Non ATM customers
Withdraw an amount of 2,000,000 Iraqi dinars to ATM customers
He used to withdraw his money and change it at semi-tolerated exchange shops for rates up to 1,600 dinars per dollar.
But increasingly, he says he can only withdraw his cash in dinars at the official rate of 1,320 dinars per dollar. The banks and central bank have traded blame for who is imposing the new restrictions.
"This is a problem. It means that our salary is losing 20 percent of its value," said Hassan.
More restrictions are coming as the government tries to stop dollars dominating the economy.
From January, Iraq's central bank will require every commercial transaction to be made in dinars. Existing US currency deposits will still be accessible in dollars, but new money wired from abroad will only be available in dinars, at the official rate.
'Illicit trade'
One of the main factors feeding the demand for foreign currencies in Iraq is "the smuggling of US dollars to countries and entities facing US sanctions, including Iran and Syria", said Hayder al-Shakeri, a researcher at the Chatham House think-tank.
Shakeri also noted the "illicit trade" of certain highly taxed goods, such as cigarettes.
Prime Minister Mohamed Shia al-Sudani acknowledged in September that sanctions preventing dollar transfers to Iranian banks had driven Iraqi traders to the black market.
Iraq and Iran's central banks were working on a mechanism to regulate such trading, he said.
In late November, the government announced steps to encourage importers of goods like cigarettes, cars, gold and mobile phones to use official channels to obtain dollars.
And, at least officially, the Hawala over-the-counter money transfer system, no longer transfers money in dollars
'Monetary sovereignty'
A year ago, Iraq adopted the international electronic transfer system known as SWIFT in order to monitor dollar usage, help tackle money laundering and ensure the respect of international sanctions.
In February, the prime minister said the new regulations had cut foreign currency trades from around $200-300 million per day to $30-50 million.
"We are consolidating our monetary sovereignty," Mudher Salih, financial policy adviser to the prime minister said.
"We cannot accept dealing with two currencies within the national economy", he told AFP.
Seeking to stave off inflation, the government allows importers to obtain dollars at the official rate in key sectors like food, medicine, and construction.
And it is encouraging banks and importers to favour alternative currencies like the euro, Emirati dirham, and Chinese yuan, to reduce dollar demand.
For now, the gap between the official and unofficial dollar rates is still causing headaches for authorities.
Police recently caught several people at Baghdad airport as they were planning to travel with dozens of debit cards and use them abroad to withdraw thousands of dollars at the official rate, which they could sell for a profit on the Iraqi parallel market.
Government directive regarding the use of electronic payment cards for the salaries of employees and retirees
Today, Sunday (December 17, 2023), the General Secretariat of the Council of Ministers issued a directive regarding the use of electronic payment cards for the salaries of employees and retirees.
The General Secretariat said in a statement received by “Baghdad Today” that it “instructed the ministries and entities not affiliated with the ministry and all governorates to instruct their staff not to misuse debit electronic bank payment cards (debit cards) for the localization of salaries directly or by giving them to others.” And ensuring its safe use for the legitimate purposes designated for it inside and outside Iraq.”
She added, “This comes after diagnosing cases of misuse of these cards by filling them with money that greatly exceeds the amount of the employee’s monthly salary, by enhancing the balance of his account to which the bank card is linked by an amount that exceeds the monthly income and does not correspond to the source of income declared in the Know Your Customer (KYC) form or does not. Providing documents proving the sources of these funds, and using cards outside Iraq in transactions that fall within financial fraud practices with the aim of speculation in the black market for foreign currency, which harms the national economy.”
She pointed out that “therefore, the card holder is exposed to accountability and legal procedures based on the provisions of the Anti-Money Laundering and Terrorist Financing Law (39 of 2015).”
Advisor to the Prime Minister: Iraq today has the highest levels of foreign reserves in its financial history
Advisor to the Prime Minister, Mazhar Saleh, confirmed that Iraq today has the highest levels of foreign reserves in its financial history.
Saleh defended the banking restrictions aimed at “verifying these transfers,” with the aim of reassuring “the international financial community and also for reasons related to Iraqi society: Do these transfers actually go to finance Iraq’s trade?”
He added, “What is happening has nothing to do with the strength of the Iraqi economy. Iraq today is at the highest levels of foreign reserves in its financial history.” Rather, “structural changes have occurred in issues of dealing with foreign currency.”
The General Secretariat of the Council of Ministers issues a directive regarding the use of electronic payment cards
Today, Sunday (December 17, 2023), the General Secretariat of the Council of Ministers issued a directive regarding the use of electronic payment cards for the salaries of employees and retirees.
The General Secretariat said in a statement received by “Al-Iqtisad News” that it “instructed the ministries and entities not affiliated with the ministry and all governorates to instruct their staff not to misuse debit electronic bank payment cards (debit cards) for the localization of salaries directly or by giving them to others.” And ensuring its safe use for the legitimate purposes designated for it inside and outside Iraq.”
She added, “This comes after diagnosing cases of misuse of these cards by filling them with money that greatly exceeds the amount of the employee’s monthly salary, by enhancing the balance of his account to which the bank card is linked by an amount that exceeds the monthly income and does not correspond to the source of income declared in the Know Your Customer (KYC) form or does not. Providing documents proving the sources of these funds, and using cards outside Iraq in transactions that fall within financial fraud practices with the aim of speculation in the black market for foreign currency, which harms the national economy.”
She pointed out that “therefore, the card holder is exposed to accountability and legal procedures based on the provisions of the Anti-Money Laundering and Terrorist Financing Law (39 of 2015).”
Iraq seeks “monetary sovereignty” Restrictions on the dollar “confuse” Everyday life
Al-Harith Hassan, an employee in the oil sector in the city of Basra in southern Iraq, has been unable for months to withdraw his full salary in dollars from the bank, after the authorities imposed new restrictions that complicate the use of hard currencies, in their effort to control a black market for exchange rates.
These measures are considered a paradox in an oil-rich country, which has huge reserves in US dollars, exceeding one hundred billion.
However, the emergence of a parallel exchange market, and the authorities imposing restrictions within the framework of strengthening banking supervision in compliance with international rules imposed by Washington, complicated the daily life of the population.
The official exchange rate is 1,320 dinars to one dollar, but at money changers, the price of one dollar is equal to 1,500 dinars and may reach 1,600.
Currency exchange offices have become very cautious with customers, after the arrest of dozens of money changers accused of manipulating prices.
37-year-old Hassan says: “For 3 months or more, there has been great difficulty in obtaining dollars from banks.”
The salary of this employee supervising logistics operations in an oil field in southern Iraq is approximately $2,500 per month.
He explained: “In the past months, we would go to the bank to withdraw our salary. They would give us very small amounts in the form of payments, due to the illiquidity of the dollar.”
Hassan explains that recently, the general trend among banks has been to give salaries in dinars and according to the official exchange rate. But he considers this “a problem, because the official exchange rate differs from the parallel market price by 20 percent,” meaning that “the salary will be reduced.” Of its real value.
The Central Bank of Iraq announced in a statement that, as of January, it had decided to “limit all commercial and other transactions to the Iraqi dinar instead of the dollar.” in the country.
"Monetary Sovereignty"
While the dollar can be withdrawn in cash from previously existing deposits in hard currency naturally, starting in 2024, it will become necessary to withdraw every money transfer from abroad in dinars exclusively, and according to the official exchange rate.
The Prime Minister’s Advisor for Financial Affairs, Mazhar Saleh, confirms that “this is the rule that is part of monetary sovereignty, but there are exceptions,” which especially include embassies.
He adds: “We strengthen what is called monetary sovereignty... It is not possible to deal with two currencies within the national economy.”
However, these restrictions raise controversy and hinder the daily life of Iraqis, according to Agence France-Presse.
Direct transfers outside banks have become impossible in dollars, and are limited to dinars at the official rate.
The banking sector in Iraq has adopted an electronic platform, the aim of which is to monitor the uses of the dollar and tighten control over a thriving informal economy, while tax evasion attracts some importers and traders.
The Prime Minister, Muhammad Shiaa Al-Sudani, acknowledged that with the new measures, the cash supply in hard currency available in the market decreased from “200 to 300 million dollars.” per day to “30, 40 and 50 million dollars.”
Haider Al-Shakri, from the Chatham House Research Center, explains that “one of the main reasons” In order to enhance demand for the currency in the parallel market, “the smuggling of the dollar towards countries and entities subject to sanctions, especially Iran and Syria.”
In September, Shiaa Al-Sudani said that merchants who deal with Iran are forced to turn to the parallel market to obtain currency, given that Iran is a country “that has sanctions and is not allowed to conduct financial transfers.”
At the same time, he confirmed that the central banks in Iraq and Iran are discussing a “mechanism” In order to “regulate trade”, it would “break the back of the parallel market”.
"Illegal trade"
Al-Shakri also points out the existence of “illegal trade.” For some products subject to “high taxes”, such as cigarettes.
In late November, the government announced facilities to encourage importers of cigarettes, cars, gold, and mobile phones to obtain foreign currency through official channels.
As for bilateral exchanges, the authorities encourage banks and importers to use currencies other than the dollar, such as the euro, the UAE dirham, or the Chinese yuan.
The Prime Minister’s advisor, Mazhar Salih, defends the banking restrictions that aim to “verify these transfers,” with the aim of reassuring “the international financial community, and also for reasons related to Iraqi society: Do these transfers actually go to finance Iraq’s trade?”
He adds: “What is happening has nothing to do with the strength of the Iraqi economy. Iraq today is at the highest levels of foreign reserves in its financial history.” Rather, “structural changes have occurred in issues of dealing with foreign currency.”
He also notes that in order to protect the country with a population of 43 million people from inflation, importers have access to the dollar and buy it at the official rate, which is more beneficial.
This concerns especially foodstuffs, medicines and building materials. Saleh believes that this “creates an atmosphere of stability, which is contrary to the parallel market.”
On the other hand, Iraqis can withdraw money in dollars before they travel. But this created a new problem, as the authorities at the airport stopped many travelers in possession of debit cards, which were used to withdraw thousands of dollars from abroad at the official rate, and then sold them again at the black market price inside Iraq.
A fruitful week in the footsteps of financial and banking reform
The last week, ending on 12/14/2023, witnessed clear activity and efforts by the government and the Central Bank to implement the visions, drawn-up plans, and road map contained in the financial and banking reform methodology in Paragraph 7 and other relevant paragraphs of Axis 12 of the government curriculum and the new strategy that the Central Bank is working on for banking reform and financing. Foreign trade and reconsidering lending policies in accordance with building a national lending strategy that adopts new mechanisms for bank financing and a leadership initiative to develop the capabilities of young people and provide a wide scope for them to choose their small, medium and pioneering projects in all areas of development and technology.
In addition to confirming plans for digital transformation in the financial and banking sector and the transition to a cashless society, and a clear focus on electronic payment applications in all fields, with fruitful cooperation and high coordination with the relevant government agencies and with continuous support from the Prime Minister. Therefore, this was achieved during the past week and in light of the negotiating visits to organize financing. Foreign trade conducted by delegations from the Central Bank, the government, and banks to Turkey and the United Arab Emirates, and meetings with the US Federal Reserve Bank, the US Treasury, the Turkish Central Bank, and the concerned authorities in Turkey are as follows:
First - Directly opening accounts for our banks in Turkish lira and euros, with support from the Central Bank of Iraq, in accordance with special arrangements and understandings.
Secondly - Initiating the strengthening of our banks’ balances in UAE dirhams and agreeing with First Abu Dhabi Bank on all arrangements in a clear manner.
Third - Establishing and strengthening our banks’ relationships with foreign correspondent banks and achieving compliance of the Iraqi banking system with international banking standards. And enhancing the advance balance in our bank accounts. This will lead to a gradual reduction in reliance on the electronic platform in 2024.
Fourth: Meeting the Central Bank’s requests for foreign exchange shipments for the year 2024.
Fifth - Emphasis on the electronic link between the Central Bank, customs and tax, and the automation of the customs and tax system.
In continuation of the Central Bank’s procedures to employ the strategy of financial inclusion and electronic payment, a decision was issued by its Board of Directors to establish the National Company for Electronic Payment Systems in Iraq.
Which will organize, develop and manage the national electronic payment systems with high efficiency, and the role of the Central Bank will be regulatory and supervisory over these systems, and implementation and development of the legal and operational framework will be necessary with the participation of all relevant authorities in accordance with the Central Bank Law.
This confirms that the Central Bank and the government are working in coordination and with continuous efforts to achieve financial and banking reform, which is the beginning of successful economic reform.
The central goal is to stabilize the exchange rate and not accept the existence of another price for trading on the black market that is higher than the official price. And to eliminate speculation in the black dollar and harm to the national economy.
What is the position of Baghdad and Tehran regarding it?.. An American plan to arm the Kurdistan Region with air defense systems
Forbes magazine reported The American Congress decided to equip... The Kurdish Peshmerga forces, with air defense systems, are welcomed, especially in light of the attack on the airport. Erbil International Airport was subjected to repeated attacks, attacks that occurred even years before the war The current situation between Israel and the Hamas movement.
He explained The American report, translated by Shafaq News Agency, stated that “the National Defense Authorization Act For the year 2024" Which was recently approved by Congress, includes a clause related to equipping forces The Peshmerga in the Kurdistan Region have air defenses, adding that such a step is welcome In the region because it was subjected to repeated attacks with missiles and drones from Iran And the militias supported by it during the past years, attacks that had no defense Antidote to it.
airport Erbil
He continued The report states that the provision in the bill, which was passed by the House and Senate on 14 This December, it is expected to be signed by President Joe Biden and the Secretary of Defense The Ministry of Foreign Affairs stipulates “developing an action plan to equip and train the Iraqi security forces and forces.” Kurdish Peshmerga to defend against any attack with missiles, rocket-propelled grenades, and other systems manned, by February 1, 2024, and implemented within 90 days of Preparing it.
He pointed out The report indicates that since the outbreak of war between Israel and “Hamas” in October Last October, American forces were subjected to repeated attacks by missiles and aircraft The march in Iraq and Syria, targeting a base for American forces at Erbil International Airport, Recalling that this airport was subjected to attacks years before the start of the current war in Gaza, The first missile attack occurred in September 2020.
And it was considered The report states that many of these attacks are aimed at showing the United States the capabilities of these attacks Militias are able to attack their targets, even within the relatively safe borders of the Kurdistan Region Which directly puts American forces at risk, as happened when a drone was hit An American base at the airport was booby-trapped on October 26, and it was... It could lead to human casualties and major damage if it exploded.
as The report mentioned another attack that occurred on February 14, 2021, targeting the airport with a barrage of 14 A missile was fired at the base and a nearby residential area, killing an American contractor in Al-Qaeda and seriously injured a civilian, who died as a result of these injuries.
as Another attack occurred on December 8, when a bomb-laden plane crashed into a building The building was completed, and if it had been inhabited, there would have been a large number of casualties.
Region Green
He drew The report indicates that this is unlike the case of the neighborhoods surrounding the Green Zone in the capital, Baghdad Which were also subjected to attacks with missiles and drones, the neighborhoods surrounding the airport Erbil contains many high-rise buildings, many of which are currently under construction.
He pointed out The report indicated that analysts said that American soldiers had previously avoided launching the system "C Ram" Anti-rocket, artillery and mortar shells during the February 15 attack February 2021 at Erbil Airport, because they were afraid of hitting high-rise civilian buildings nearby by mistake.
Attacks Iranian
In addition In addition, the report mentioned Iran’s missile attack on a residential building on March 12 2022, which demonstrated Iran’s willingness to directly target civilian areas in Kurdistan, This is in addition to its targeting of Iranian Kurdish dissidents in the Koya area, which was demonstrated Also the accuracy of Iranian missiles and Tehran’s willingness to attack opposition groups in region in this way.
And it was considered The report states that these Iranian attacks, and others, clearly demonstrated the region's weaknesses Kurdistan.
Systems Air Defense
He continued The report states that while the American force at Erbil airport will continue to secure a defense point To base it using the "C-RAM" system, the Kurds need air defenses Larger.
He drew Until any air defense systems that the United States agrees to supply to the Kurdistan Region It will likely not be as advanced as the MAM-104 Patriot system. The famous And long-range, pointing out that the ground-based air defense system is currently the most advanced The Iraqi army is the "Pantsir-S1" system. Russian short term, but who Baghdad will likely oppose Kurdistan having any system more advanced than it has.
Therefore, The report suggests that the United States will provide Kurdistan with short- to medium-term systems The range is capable of confronting militia missile and drone attacks Kurdistan will undoubtedly possess it for defensive purposes only, indicating that Iran will certainly protest, She had already requested clarification on this issue when this related item appeared Initially armed earlier this year, it is unlikely to be considered Tehran refers to the region's possession of these weapons as a strategic threat.
And he concluded The report states that the Peshmerga possess such systems, in addition to some surface-to-air missiles Which are fired from the shoulder against drones that may be deployed by organizations such as ISIS, "It will undoubtedly be much better than nothing, and it is a long-awaited situation."
Expert: The behavioral aspect of Iraqi merchants is similar to “retail trade.”
The economic expert, Salah Nouri, likened the behavioral aspect of Iraqi merchants to “retail trade.”
Nouri said {to Al-Furat News} that: “Iraqi merchants raise prices on all occasions, and the reason is due to the behavioral aspect of merchants {seizing opportunities} and obtaining the highest profit.”
He added, “The behavior of retail trade in Western countries is to reduce prices and then buy more and then make a profit.”
Nouri explained, “In Iraq, the buyer is exploited, and in Western countries, the buyer is attracted.”
First sign
South Visa Card
Ease, allowing you to make faster, more authentic and more efficient payments
Reducing the need to carry the bag.
Acceptance: at all ATMs, points of sale, and cash withdrawal points, whether the transactions are local, foreign, or via the Internet
Security: According to the triple protection system technology, which is required of you
An identification number that is sent to the mobile phone in order to accept transactions.
- Prevention: Accepting movements without physical contact with the device or the need to enter a secret code for movements less than 50$ helps prevent
It can be activated by contact, and it reduces card wear.
2nd sign
Services and money.
Deposit income accounts
Opening current accounts for individuals and businesses
dollar).
Issuing certified papers and instruments.
The innovation of clearing instruments using the ACH system
- RTGS electronic payments or settlements system
Opening documentary credits.
Issuing internal or external transfers.
Issuing internal or external letters of guarantee.
10 Issuing Visa cards.
11 Al Janoub Online Application Service.
(Jibiraq)
Al Janoub Islamic Bank announces the provision of a transfer service in UAE dirhams
they are now advertising
Al Janoub Islamic Bank announced the provision of a transfer service to the United Arab Emirates in the dirham currency.
The bank said in a post on its Facebook page that Al Janoub Islamic Bank provides direct foreign transfer service to the United Arab Emirates in the UAE dirham currency through the bank’s branches spread across Iraq.
He added that merchants, owners of reputable companies, and importers only have to deposit money in Iraqi dinars, after which the bank sends the transfer in dirhams within two days, using easy and safe procedures.
The Central Bank of Iraq and First Abu Dhabi Bank agreed to finance trade and imports in the dirham currency.
The Central Bank stated in a press statement, “The Governor of the Central Bank, Ali Mohsen Al-Alaq, met in Dubai with the Chairman of the First Abu Dhabi Bank Group, Hana Al Rostamani, and during the meeting it was agreed to launch financial transfer operations between the two countries and finance trade and imports between Iraq and the United Arab Emirates in the currency.” Emirati dirham through First Abu Dhabi Bank.
He added that transfer operations in the Emirati dirham began today, and the first phase of this agreement will be with 5 Iraqi banks, which will be gradually increased, indicating that this step comes within the framework of enabling Iraqi banks to establish relationships with reputable international banks, and it aims to reduce dependence on the electronic platform for transfers. Finance and work in accordance with normal international practices adopted in enhancing Iraqi bank balances for the purposes of financing trade.
Drones attack US bases in Syria
On Sunday, two US military bases were attacked by drones of unknown origin in Deir ez-Zor Governorate, eastern Syria.
Local sources reported that an attack by drones of unknown origin targeted military bases in the Koniko and Omar gas fields in Deir ez-Zor Governorate.
The areas east of the Euphrates River in Deir ez-Zor Governorate are under the occupation of the "PKK/YPG" organization. US-backed, while the remaining areas of the Deir ez-Zor countryside are under the control of the Syrian army.
Learn how to get rid of seasonal flu with herbal remedies
Influenza is a very common disease during the winter, and herbs play a major role in combating the symptoms of seasonal influenza. In this report, we learn about ways to treat seasonal influenza with herbs, according to the “Times of India” website.
Herbal remedies to get rid of seasonal influenza
Ginger and turmeric
According to research, ginger and turmeric help boost the immune system and have anti-inflammatory properties. Ginger helps soothe a sore throat and nausea, while turmeric's active compound, curcumin, has powerful anti-inflammatory effects that help provide relief.
Herbal drink with honey
Hot herbal tea can be very effective in providing relief to your throat and sinuses. To make herbal tea healthy and delicious, you can sweeten it with honey.
Apart from honey, you can also use royal jelly and other bee products. Mixing herbs like ginger, raw turmeric or cloves in herbal tea can help you combat seasonal flu effectively.
Echinacea herb
This herb is known for its immune-boosting properties. It is an effective nutritional supplement for colds, and several studies indicate that echinacea extract can reduce the severity and duration of flu symptoms.
Basil
An anti-inflammatory, antiviral, and antibacterial herb, basil is used to treat flu or cold symptoms, as it is believed to provide a variety of health benefits.
Honey
It contains antioxidant, antibacterial and antimicrobial properties that can help your body fight the flu efficiently. Honey is also known to help soothe a sore or scratchy throat and also helps boost the immune system.
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