Iraq moves to break dollar restrictions in crucial talks with Washington
Iraq has begun a round of talks in Washington with representatives of the US Treasury Department to address issues related to restrictions imposed on the dollar, according to what Iraqi Foreign Minister Fuad Hussein announced during a press conference broadcast by the state-run Al-Iraqiya media channel.
Video for this Blog post is below here:
Hussein described the meetings as “very useful,” noting that they would continue. Topics set for future discussions include further talks on the list of Iraqi banks subject to US sanctions and the status of Iranian funds accumulated in Iraq. “There are serious steps to resolve these issues,” Hussein said.
Iraq experienced a shortage of dollars last year after the Federal Reserve Bank of New York began closely examining transfers to Iraqi banks. Iranian companies and individuals have long used banks in neighboring Iraq to access dollars and circumvent U.S. sanctions.
The Central Bank of Iraq has pledged to restrict all domestic trade transactions starting this year, in an attempt to limit dollar dealings outside the Iraqi banking sector and limit its smuggling abroad.
Hussein pointed out that the talks with the US Treasury aim to ease these restrictions and ensure a smoother flow of dollars into the Iraqi economy. These talks are expected to contribute to finding sustainable solutions to the financial issues facing Iraq and easing pressure on the national economy.
In conclusion, Hussein stressed that there are serious steps to resolve these issues, and that the talks will continue to ensure tangible results in the near future.
Rashid Bank announces the start of selling dollars to travelers starting next Monday
Rashid Bank announced, on Saturday, that it will start selling dollars to travelers starting next Monday.
The bank said in a statement, seen by "Al-Eqtisad News", that "based on the directives of the Central Bank of Iraq, Rashid Bank announces the allocation of a number of its branches on both sides of Karkh and Rusafa to receive travelers wishing to obtain the dollar at the official price, starting from Monday, July 15, 2024."
He added, "The branches are divided as follows:
Karkh side (Yarmouk / Abu Ghraib / Mahmoudia / Al-Bayaa / Al-Salihiya), while the branches on Rusafa side are (Ragheba Khatoun / Thawrat Al-Ishrin / Al-Shorjah / Commercial Credit / Tigris)."
Rafidain: Starting selling dollars to travelers starting next Monday
Rafidain Bank announced, on Saturday, that it will begin selling dollars to travelers starting next Monday.
The bank said in a statement, seen by "Al-Eqtisad News", that "based on the directives of the Central Bank of Iraq, Rafidain Bank announces the commencement of selling dollars to travelers starting from Monday, July 15, 2024."
The bank indicated that "the designated branches in Baghdad have been identified, which are:
Al-Karkh branches (Al-Senak - Al-Mansour - Al-Rafei - Al-Khadra - Al-Ma'rifa - Buratha - General Secretariat of the Council of Ministers - Al-Amel neighborhood - Al-Muheet - Al-Arabi neighborhood). Al-Rusafa branches
(Al-Firdaws - Al-Raisi - Bab Al-Sharqi - Palestine Street - Al-Mashtel - Dor Al-Dhabat - Al-Waziriyah - Al-Quds - University of Baghdad)."
Regarding commission.. A directive from the Central Bank of Iraq to banks operating at airports
Today, Saturday, the Central Bank of Iraq issued a directive to banks and exchange companies operating at airports regarding determining the commission.
He pointed out that "the above commissions will be reviewed after (6) months."
Below is the document:
Chinese CETC Group expresses interest in Iraq's infrastructure and economic projects
The Chinese CETC Group, specializing in energy, construction technology, and infrastructure, expressed to PM Mohammed Shia Al-Sudani its desire to participate in Iraq's infrastructure and economic projects.
According to a statement from the Prime Minister's office, Al-Sudani received a delegation from the prominent Chinese group. He highlighted the government's economic approach of embracing "productive partnerships and enhancing Iraq's investment environment to attract global companies."
Moreover, the Iraqi Prime Minister stressed that the government aims to "attract investments and strengthen partnerships with the Iraqi private sector by providing supportive guarantees."
The Chinese delegation expressed their interest in expanding cooperation with both the Iraqi public and private sectors across various economic and investment fields.
Notably, Iraq and China are partners in many areas. Iraq is one of the top oil suppliers to China, and Chinese companies operate in various sectors in Iraq, including oil and gas extraction and school construction. Additionally, both countries are cooperating on the Belt and Road Initiative and the Development Road project.
JULY 14 24 below here
Prime Minister: The government has adopted an economic approach in opening up to productive partnerships
Prime Minister Mohammed Shia al-Sudani confirmed today, Saturday, that the government has followed an economic approach in opening up to productive partnerships and developing the investment environment in Iraq.
The Prime Minister's Media Office said in a statement received by the Iraqi News Agency (INA): "Prime Minister Mohammed Shia al-Sudani received a delegation from the Chinese CETC Group , which specializes in energy, construction technology, and infrastructure."
Al-Sudani pointed out, according to the statement, "the economic approach adopted by the government in opening up to productive partnerships and developing the investment environment in Iraq, in a way that suits international companies, attracts investments, enhances partnership with the Iraqi private sector, and provides supportive sovereign guarantees."
For its part, the Chinese group delegation expressed its "desire to participate in the infrastructure sector in Iraq and contribute to development and economic projects, which would expand the scope of cooperation with the Iraqi private and public sectors and within various economic and investment fields."
Parliament complains of US "intentionality" behind continued sanctions on Iraqi banks: We have no defect - Urgent
The Parliamentary Finance Committee commented, today, Saturday (July 13, 2024), on the impossibility of lifting US sanctions on some Iraqi banks.
Committee member Moeen Al-Kadhimi said in an interview with Baghdad Today that "there is no weakness in Iraq's foreign policy and there is no defect in the Iraqi banking system that would prevent the United States of America from lifting sanctions on Iraqi banks."
Al-Kadhimi explained that "there is a clear intention by the United States of America to continue these sanctions despite the clear development in the banking system and the restriction of foreign transactions through the electronic platform in the Central Bank, but Washington uses this file as a political file towards Iraq."
He added, "The Iraqi government is doing everything it can to lift the sanctions on the banks, especially since these sanctions have negatively affected the banking sector and contributed significantly to the dollar crisis."
Yesterday, Friday, July 12, 2024, during his visit to Washington with the US Under Secretary of the Treasury for Terrorism and Money Laundering, Brian Nelson, Foreign Minister Fuad Hussein discussed the dollar exchange rate and lifting US sanctions on 32 Iraqi banks.
A statement by the Iraqi Foreign Ministry, received by "Baghdad Today", said that Hussein - who heads the Ministerial Council for the Economy - discussed with the American official "the issues that the two parties are working on according to their previous reform agreements."
During the meeting, Hussein stressed, according to the statement, "the Iraqi government's commitment to moving forward with its reform and economic measures related to the Iraqi banking system and the energy sector."
He explained that "the government's policy seeks to achieve Iraqi energy independence through associated gas investment projects, and to develop the working mechanism of Iraqi banks in a manner consistent with international standards to ensure transparency and provide open data, which enables banks to provide the services needed by the Iraqi people."
The Foreign Minister called on "the American side to reconsider the sanctions imposed on about 32 Iraqi banks, as they were involved in the structural reform process."
Hussein pointed out that "the stability of the Iraqi dinar exchange rate against the US dollar represents a fundamental pillar for achieving economic, social and political stability in Iraq, which is what the government seeks to achieve," calling on the relevant American institutions to review it and build on it.
For his part, Nelson praised "the steps taken by the Iraqi government to support the Iraqi economy and address the challenges it faces."
He stressed that "the relevant American institutions understand the seriousness of the Iraqi government in modernizing the work mechanisms in Iraqi institutions," expressing "the American side's readiness to help Iraq address the obstacles that hinder its reforms, in a way that reflects positively on the Iraqi economy."
Rafidain Bank identifies 19 branches in Baghdad to sell dollars to travelers
On July 4, the Central Bank of Iraq revealed the new mechanism for travelers to receive foreign currency (dollars), which will be exclusively through company and bank outlets at international airports, stressing that the goal of the new mechanism, which will come into effect on July 14 {today}, is to deliver the dollar to the real traveler and pass sound transactions, in addition to facilitating travelers’ access to the dollar more quickly.
Al-Sudani invites Saudi and Egyptian businessmen to invest in hotels and entertainment facilities
On Saturday, July 13, 2024, Prime Minister Mohammed Al-Sudani held a meeting with a delegation of Egyptian and Saudi businessmen, inviting them to invest in hotels and entertainment facilities.
Al-Sudani received, according to a statement from his office, which was reviewed by "Ultra Iraq", a delegation of Egyptian, Saudi and Iraqi businessmen, including; Chairman of the Board of Directors of TMG Company Hisham Talaat Moustafa, Chairman of the Board of Directors of Al-Muhaidib Group Suleiman Abdul Qader Al-Muhaidib, CEO of the group Essam Abdul Qader, Director of Development in the group Raed Ibrahim Al-Madhiem, Director of Al-Maysara Group Yasser Qasim Zagher, and businessman Ahmed Talaat Hani, "all of whom are specialized in real estate development and the establishment of integrated and smart residential cities, in the presence of the Saudi Ambassador to Iraq Abdulaziz bin Khalid Al-Shammari."
Hisham Talaat Moustafa is one of the most prominent businessmen and politicians in Egypt. He was sentenced to death for his conviction in the murder of Lebanese singer Suzanne Tamim. The Cairo Criminal Court then sentenced him to 15 years in prison instead of the death penalty , before Abdel Fattah el-Sisi's regime decided to pardon him and release him from prison.
Al-Sudani called on "Egyptian and Saudi company owners to invest in the field of tourist resorts, hotels and entertainment facilities, as Iraq has many diverse tourist destinations," indicating that "development and progress in Iraq serve the economic interests of the rest of the Arab countries."
He pointed out that "Iraq is witnessing rapid growth and a phase of recovery, and there are many promising investment opportunities, especially in the field of housing and new city projects, as the country needs about 3 million housing units," stressing that "the government is moving towards building integrated cities that include all sectors, services, entertainment and commercial facilities, and are linked to the capital, Baghdad, by an advanced network of transportation routes."
Al-Sudani explained that "the government has offered projects for 5 new cities for investment in Baghdad and some governorates, and it is moving towards launching 11 new cities, just as it supports successful investment experiences," noting that "what is important about modern cities is that they contribute to solving the housing crisis, especially for low-income groups."
Why did Iraq stop dealing in the Chinese yuan
The Parliamentary Finance Committee revealed the reasons behind Iraq’s suspension of dealing in the Chinese yuan, while indicating that many of the Central Bank’s procedures are governed by American will.
Committee member Moeen Al-Kazemi said in a press statement that "the US Federal Bank imposed on Iraq to stop dealing in the Chinese yuan, under the pretext that there was manipulation in some transfers or certain problems occurred, indicating that "Iraq's money, as we know, is included in the US Federal Bank as a result of the sale of oil at an amount of 3.5 million barrels per day, and this money enters the Federal Bank and is not transferred to Iraq in cash. It witnessed a transfer to Iraq through corruption transfers from the Central Bank and the Federal Declaration."
Al-Kadhimi continued, "Many of the central bank's measures for the government are governed by American will, and this will may be explained by administrative and financial reasons, not financing terrorism, and others," and he announced that "the reasons are political with the aim of pressuring the Iraqi government."
Is the Chinese currency canceled?
Al-Kadhimi stressed that "the merchant and the Central Bank must have multiple options and not only deal in dollars, so this suspension is temporary and not permanent," noting that "the committee will ask the Central Bank to address the issue and have a diverse price basket, so that the options are more for the Central Bank and Iraqi merchants."
Al-Kadhimi stated earlier that "China's remittances in yuan have been temporarily suspended until auditing mechanisms are found."
He continued, "During the past period, there have been major manipulations of China's affairs."
Iraqi delegation visits Washington to discuss security agreement, future of alliance
Iraqi Foreign Minister Fuad Hussein revealed an upcoming visit by an Iraqi military delegation to the US capital, Washington, to discuss the security agreement and the future of the international coalition, while confirming the arrangement of a meeting that will bring together Syrian and Turkish officials at a dialogue table in Baghdad to restore relations between the two countries. Hussein said in a televised statement that (Iraq has proposed an initiative to mediate between Ankara and Damascus, and communication is ongoing in this regard), and indicated that (he met his Turkish counterpart Hakan Fidan in Washington to arrange a meeting in Baghdad with the Syrian side), stressing that (there is also ongoing communication from Iraq with the Syrian side, and a date will be set for this meeting in Baghdad soon), and he continued that (Iraq does not take the green light from others, but we discuss with friends and allies the steps we are taking, especially those related to the security and stability of the region). Hussein also discussed important bilateral and regional issues with the US Under Secretary of State for Political and Administrative Affairs John Bass in the US capital, Washington. According to the statement, Hussein stressed (the importance of strengthening US-Iraqi relations in various fields).
Pointing to (the common desire to expand political and economic cooperation between the two countries), the statement added that (the meeting addressed key issues, including Iranian funds in Iraq, where Hussein called for finding a quick and fair solution that serves the interests of both parties and enhances financial stability in the region), expressing (his concern about the situation in Gaza and the deteriorating conditions in the Strip, and the extension of the conflict to southern Lebanon), Hussein stressed (the intensification of international efforts to stop the escalation and achieve peace in the region), and he went on to say that (particular focus was placed on enhancing economic cooperation between the United States and Iraq, and supporting the financial and banking sector, taking into account the challenges related to the use of the dollar in financial transactions), demanding (the necessity of finding solutions that enhance the stability of the Iraqi economy and contribute to achieving sustainable growth), pointing to (the importance of continuous dialogue and close cooperation to achieve common goals and enhance stability and development in the region), indicating that (an Iraqi military delegation will visit Washington soon to discuss the security agreement and the future of the international coalition),
Hussein explained that (the US Treasury Department positively evaluated the efforts of the Central Bank), reiterating that (his visit to Washington was to attend the NATO summit at the invitation of the American side, on the sidelines of which we held intensive meetings with Leaders of several countries). Hussein met with the US Deputy Assistant to the President and Senior Advisor for Energy and Investment Amos Hochstein. The statement explained that (the meeting addressed US-Iraqi relations in various fields, including future security and military relations), stressing that (the two sides discussed the security and regional situation in the region, in addition to the meeting of the Iraqi delegation with representatives of the US Treasury Department, as well as Iraq's role in mediating between Turkey and Syria and restoring relations between them.
The minister arrived in the United States last week to participate in the ceremonies celebrating the 75th anniversary of the founding of NATO, which was held in Washington, DC. The celebration activities were launched, in the presence of President Joseph Biden and with the participation of leaders of 32 countries and foreign ministers of the countries. The statement said that (Hussein participated in a high-level meeting within the NATO summit, where he exchanged views and perspectives on regional and international developments and bilateral relations between Iraq and the countries concerned with his US counterpart Anthony Blinken and Secretary of Defense Lloyd Austin, as well as the Foreign Ministers of Sweden Tobias Billstrom and Kuwait Abdullah Ali Al-Yahya ).
Government Advisor: The stability of the dinar exchange rate against the dollar is real and solid
The Prime Minister's Advisor for Financial Affairs, Mazhar Mohammed Saleh, confirmed today, Sunday, that the exchange rate in the parallel market does not affect the stability of the general price level. While he indicated that the parallel exchange market has become influential in a narrow economic scope, he pointed out that the stability of the exchange rate of the dinar against the dollar is real and solid.
Saleh told the Iraqi News Agency (INA): "There is an international factor that imposes controls on what is called banking compliance in financing the demand for the dollar from our country's international bank accounts in foreign currency, and there is also an internal factor that benefits from the actions and pressure of the external factor in order to obtain temporary or emergency profit gains, especially in cash dollar transactions."
He explained that "the dominance of the fixed exchange rate system in Iraq, based on an international reserves base, is the highest in the history of Iraq and its monetary policy, as foreign currency covers more than 100 percent of the total currency currently issued."
He continued: "Through the strength of the official central exchange market, the exchange rate of the dollar to the dinar in the parallel market in our country does not constitute any relative importance in influencing the stability of the general price level, which has become stable in its components and trends due to the influence of the official exchange rate factor that is currently prevailing and dominating the financing of foreign trade (imports), amounting to 1320 dinars per dollar, which is responsible for financing 90 percent of Iraq's foreign trade."
He explained that "the stability of the official exchange rate leads to stability in the stable external value of the dinar, which is embodied in the state of stability in the relative prices of goods and services, as annual inflation in our country does not exceed 3 percent, and this is what was indicated by reports of multilateral international financial and economic organizations."
Saleh added, "In light of the strength of the foreign reserves supporting the Iraqi dinar, whose value as liquid foreign assets exceeds $100 billion, the official exchange market, as a general trend, will remain dominant in containing any vague information noise that affects the parallel exchange market in short periods, due to urgent international or regional political events."
He stressed that "after the decline of the dollarization phenomenon in domestic transactions, especially in contracts, obligations and payments within the country since last year and its legal prohibition, the parallel exchange market has become such that its general effects only form a narrow economic scope of prohibited transactions, practiced by informal markets and at a rate of 10 percent of the total supply and demand transactions for the currency."
He pointed out that "the stability of the exchange rate of the dinar to the dollar that the country is witnessing, even in secondary markets, is a real and solid stability. Rather, it is derived from the strength of the impact of the price and quantitative factors of the monetary and financial policies and their integration in imposing overall price stability in the country, and containing the inflationary expectations that were caused by the forces of the parallel exchange market during the past years."
Kepler: Iraq second in oil exports to India
Kepler, a company specializing in monitoring energy sector data, announced that Iraq ranks second in oil exports to India.
The company said, in an analysis of oil imports, that India imported 5.1 million barrels per day last month.
She added that Russia accounted for 41% of India's total crude oil imports, followed by Iraq with 21% and Saudi Arabia with 11%.
Al-Shabki: The Central Bank's resort to Jordanian banks and banks raises suspicion and uncertainty
The former representative of the Finance Committee, Muhammad Al-Shabki, confirmed today, Saturday, that the Central Bank's resort to Jordanian banks and banks raises suspicion and doubt, calling for Iraqi banks to be given a greater role in the next stage.
Al-Shabki said in a statement to the “Al-Ma’louma” agency, “The issue of imposing sanctions by the US Treasury on Iraqi banks despite not having committed any significant violation is a frustrating matter and must be addressed urgently and accurately.”
He added, "The process of targeting Iraqi banks is an intentional issue by the US Federal Reserve in order for the intermediary banks represented by Jordanians to assume this role," noting that "Iraq's resort to Jordanian banks is considered economic dependency, and this is what we do not allow."
He continued, "Iraq must not allow the imposition of sanctions on Iraqi banks and must establish a clear structure for them in order for them to rise to an acceptable level," noting that "without economic sovereignty, Iraq cannot be financially stable."
It is noteworthy that America imposed sanctions on 34 Iraqi banks in order to limit the Iraqi economy, and pushed for the introduction of Jordanian banks into Iraq to fully control the Iraqi economy amid the silence of the Iraqi government.
this is a bloomberg article
Iraq in Talks With US Treasury Over Banks, Dollar Restrictions
Iraq has engaged in discussions in Washington with representatives from the US Treasury to address dollar restriction issues, Iraqi Foreign Minister Fuad Hussein said during a press conference aired on state-run media al-Iraqiya.
Describing the meetings as “very useful,” Hussein indicated that they would continue. Topics slated for upcoming discussions include further talks on the list of Iraqi banks under US sanctions and the status of accumulated Iranian funds in Iraq. “There are serious steps to resolve these issues,” Hussein said.
Iraq experienced dollar shortages last year after the New York Fed began scrutinizing transfers to Iraqi banks more closely. Iranian businesses and individuals have long used banks in neighboring Iraq to access the greenback and get around US sanctions.
Iraq’s central bank pledged to restrict all internal commercial transactions as of this year, in an apparent attempt to curb dealings of the dollar outside Iraq’s banking sector and limit its smuggling abroad.
Last week, the exchange rate for the dollar against the Iraqi dinar in the unofficial market rose from 1,450 to nearly 1,500 dinars per dollar. Local news agencies, citing a lawmaker, attributed this increase to measures by the Federal Reserve, which halted transactions from dollars to yuan aimed at supporting Iraq’s foreign trade.
Subscription to the Iraqi Credit Bank begins
Today, Sunday, the subscription for shares of the Iraqi Credit Bank began, with the aim of increasing its capital to 325 billion dinars.
The Credit Bank said that in implementation of the General Assembly’s decision to increase the capital from 250 billion to 325 billion, this will be done by transferring funds from the accumulated surplus amounting to 18 billion dinars into shares and issuing new shares offered for subscription in the amount of 57 billion dinars.
The bank confirmed that the subscription is open to shareholders and the public.
It is noteworthy that the Iraqi Credit Bank announced at the end of last year that the National Bank of Kuwait had paid an amount of 50 billion dinars as a first installment under the capital increase account on its own behalf and on behalf of all shareholders until the bank’s general assembly convenes.
On August 3, 2023, the Central Bank of Iraq directed local and foreign banks to increase their capital, or “merge or liquidate” if they are unable to do so.
A document issued by the bank stated that, "Based on the decision of the bank's board of directors No. 27 of 2023 in its session No. 1628 held on 7/18/2023, it was decided to increase the capital of banks to no less than 400 billion dinars within a maximum period of December 31, 2024, in three installments, provided that each installment is not less than 50 billion dinars on December 31, 2023, June 30, 2024, and December 31, 2024."
The document indicated that the bank may make the increase in one installment within a maximum period of December 31, 2023, noting that "the operating capital of foreign bank branches shall be increased by no less than 60% of the operating capital within a maximum period of December 31, 2023."
Stability of the dollar exchange rate between the targeting of the Central Bank and the impact of regulatory and random variables
With the fluctuation in the value of the dinar against the dollar since last week, it was noted that there are some predictions and signals from here and there that hint directly or indirectly that the dollar contract will disintegrate to a state in which it will move far away from the target level. In fact, some have predicted that the dollar will escape from the control of the Central Bank. Here we had a pause with these predictions and signals.
It is self-evident in the logic of supply and demand that we sense a rise in the exchange rate of the dollar against the dinar for reasons related to the tightening measures of the official supply, as the Central Bank targets the stability of the actual exchange rate and is trying to achieve a reduction in the gap between the nominal and real prices. Therefore, it is not surprising that the dollar exchange rate has risen these days and for a week in particular. In this case, we say that the rise and fluctuation in the levels of the actual exchange rate cannot be judged based on it and concluded from it that the actual exchange rate may be exposed to a breakdown in the short term, because the fluctuation towards an increase during the week is not considered a fluctuation in the life of short-term changes, and also that the buffers of monetary policy are present and strong to maintain the stability of the exchange rate, because it uses monetary, financial and operational tools that aim to reduce the price level and keep inflation within an acceptable level. And maintaining the level of foreign reserves within the desired growth rate and supporting the level of the dinar exchange rate against the dollar according to the fixed exchange rate system, which amounts to about 120 billion dollars, works to cover the source of currency. The official exchange rate of the Central Bank is still maintaining its level and short-term rates, a path with an acceptable general trend within the controlled levels based on the effects of And external, organizational or random variables. It is also not possible to conclude that the dollar exchange rate will slip out of control in the short term, since the short-term price level did not rise beyond the 1515 range to the 1600 threshold or more, but rather returned to 1500 on Saturday evening. In addition, the overall inflation index is controlled by the fiscal and monetary policy measures, as is known, through controlling the growth rate of foreign reserves and stabilizing the general price level resulting from reducing the internal supply of cash dollars in transactions, payments, contracts and commercial obligations since last year, criminalizing and regulating them. The parallel exchange market has become of low impact outside the official exchange market, with a gap ranging around 10-18 for the total dollar demand and supply. Therefore, it can be concluded that the clear stability witnessed by the dinar in its real levels is due to the stability of the exchange rate at this gap, in addition to the measures and policies of the Central Bank supporting the reduction of the gap between the two exchange rates for about a year, including the legal and monetary ones. Since the recent fluctuation was limited to the aforementioned 10-18 range, which means that the effectiveness of targeting is still within the acceptable level, since the parallel price system is considered subordinate to the targeted price system, since the first Based on the second in the mathematical and economic effects.
Therefore, it is too early to predict the dollar exchange rate will deteriorate in the presence of these political and procedural variables.
Iraq's financial revenues exceed 54 trillion dinars in 5 months, and an expert warns
The Ministry of Finance revealed on Sunday that the size of Iraqi revenues in the federal budget during 5 months exceeded 54 trillion dinars, confirming that the oil contribution to the budget remains around 89%.
Shafaq News Agency followed the data and tables issued by the Ministry of Finance in July for the accounts of January, February, March, April and May of the current fiscal year, which showed that oil is still the main resource for Iraq's general budget, reaching 89%, indicating that the rentier economy is the basis of the country's general budget.
The financial tables indicated that the total revenues for the first five months of the current year amounted to 54 trillion, 703 billion, 848 million, 603 thousand and 9 dinars, and that the total expenditures with advances amounted to 21 trillion, 701 billion, 453 million, and 601 thousand dinars.
According to the financial tables, oil revenues amounted to 48 trillion, 455 billion, 60 million, and 171 thousand dinars, which constitutes 89% of the general budget, while non-oil revenues amounted to 6 trillion, 788 billion, 431 million, and 731 thousand dinars.
For his part, economic expert Mohammed Al-Hasani said in an interview with Shafak News Agency, "The economy that depends entirely on oil is a country covered in a false cover and exposed economically and socially."
He added that "the great neglect and continued marginalization of the role of other sectors, agricultural, industrial and service, will prevent the state from being able to transform from a rentier economy to a comprehensive economy," indicating that "the state quickly collapses in the event of any global economic crisis."
The "Iraq Al-Mustaqbal" Foundation for Economic Studies and Consultations announced on Thursday, July 11, that for the first time, the non-oil revenues of the Iraqi state recorded 11% of the total revenues, with oil revenues falling below the 90% barrier.
A report issued by the institution stated that non-oil revenues for the first five months of the current year amounted to 6.24 trillion Iraqi dinars, while oil revenues for the same period of the current year amounted to 48.4 trillion Iraqi dinars.
According to the report, tax revenues on income and wealth increased by 118%, while revenues from commodity taxes and production fees increased by 285%.
The institution's report indicated that fee revenues increased by 50%, while oil revenues increased by 6.4%.
In March 2021, the Prime Minister's advisor for financial affairs, Mazhar Muhammad Salih, confirmed in an interview with Shafaq News Agency that the reasons for the economy remaining rentier are due to the wars and the imposition of an economic blockade on Iraq during the past era and the political conflicts we are witnessing today, which led to the dispersion of economic resources.
The continued reliance of the Iraqi state on oil as the sole source of the general budget puts Iraq at risk from global crises that occur from time to time due to the impact of oil on them, which makes the country turn every time to cover the deficit through borrowing from abroad or domestically, which indicates the inability to manage the state’s funds effectively, and the inability to find alternative financing solutions.
The controversy over foreign banks’ acquisition of the “Iraqi Dollar Auction”.. A comprehensive explanation of the reasons
The researcher in banking and economic affairs, Mustafa Hantoush, reviewed today, Sunday, the reasons for foreign banks’ acquisition of the largest percentage of shares in some banks inside Iraq and their acquisition of the currency auction as well, as the strengths of these banks are that they are owned by foreign banks capable of opening accounts easily in accordance with the standards of American banks that supply the dollar.
However, Hantoush reviewed the existence of a “legal loophole” that enabled the Central Bank to grant foreign investors larger percentages than stipulated in the Companies Law, noting that Article 107 of Banking Law 94 of 2004 gives the Central Bank’s Board of Directors the authority to determine the percentage of foreign investor ownership in banks without being bound by general laws.
He considered that this paragraph is not supposed to mean that the percentage should be more than 50%, but rather that it should be less, but the loophole is that the legal article gave absolute authority without addressing that the percentage should be less or more than 49%.
He explained that “there is no granting of a share larger than 50% in the world except in countries where there is a high circulation of funds, considering them bankrupt countries that do not possess wealth that they fear will be controlled by foreign banks.” He explained that
“according to this strategic mistake, foreign banks were given more than 60% of the shares in banks insideIraqToday, we have begun to observe the fruits of this mistake, when the American side noticed the existence of currency smuggling and trade operations with Iran.Syriaand set conditions of compliance, failedCentral Bank of IraqAnd Iraqi banks by applying the standards or the possibility of opening accounts for Iraqi banks in American banks to achieve control and finance their accounts in dollars.
He pointed out that "when this happened and the arena became empty of Iraqi banks capable of taking on this role, these foreign banks operating inIraqAnd through the governors of the central banks of the countries of origin of these banks, they presented themselves as a solution to Washington instead of presenting themselves as a mediator betweenIraqAnd America.”
He stressed that “indeed, American banks relied on these foreign banks operating inIraqAnd they opened accounts for them inCitibankAnd GBMorgan, to their parent banks in other countries, which own the largest part of these banks withinIraqAlthough these banks are inIraqIts work does not rise to the level of achieving 5 points in the international standards, but it relied on its parent banks located in other countries.”
Accordingly,IraqNow I take the dollars he has in the US Federal Reserve, and through them I finance the accounts of these banks that are open in my pocket accounts.MorganAndCitibankFrom there, the dollar is transferred to the rest of the world for Iraqi traders, and the traders deposit the dinars inCentral Bank of IraqHe
explained that "Iraqi banks cannot perform this role because they cannot open accounts inCitibankMy pocketMorgan“Because it does not have branches in countries that the American banking system trusts, and the Central Bank of Iraq failed to guarantee Iraqi banks against American banks, and succeeded earlier in 5 banks but they only lasted a month and then these banks were punished, and they too were guaranteed by Jordanian banks.”
He stressed that “foreign banks cannot be relied upon to manage the Iraqi banking system, this model failed in India because of its reliance on the foreign banking system, as the foreign bank gives profits to its parent branches abroad, and does not reinvest the profits here insideIraq", calling on the Central Bank to "find a solution to trade with Iran andSyria...and strengthening the Iraqi banking system and guaranteeing it before American banks and opening accounts for Iraqi banks to experiment with American banks.
U.S. Consulate in Erbil Renews Support for Digital Financial System: Electronic Payments Are More Secure
The U.S. Consulate General in Erbil on Sunday, July July 14, 2024, renewed its support for the digital financial system, explaining that electronic payments are the most secure process.
The US Consulate General said in a statement, seen by Kurdistan 24, that "electronic payments are a safer way to access the US dollar, as it can be traded at its official price when used while traveling abroad."
The digital financial system will enhance access to "formal banking services such as loans, insurance, payments and savings, while reducing the risk of loss, theft and financial crime, and providing more investment channels," the statement said.
Washington's consulate in Erbil stressed continued support for the U.S. government and U.S. companies "to provide an accessible financial system for all" and urged "everyone to conduct their transactions through official banking channels."
Digital transformation is one of the top priorities of the ninth government formation of the Kurdistan Region. Therefore, the KRG through the Information Technology Department has committed to announcing and disseminating the KRG's first digital transformation strategy, which includes the following six core strategic activities: digital governance, digital engineering, human capital, user-centered design, security and data privacy, and procurement.
The strategy is key to achieving the KRG's vision, and its main objective is to make the KRG a hub of government digital maturity and thus one of the leading digital governments in the region by 2025. This means that it ensures that services are easily and quickly found and used by citizens. It is also designed to eliminate bureaucracy and enhance the efficiency of institutions in the public interest through the adoption of modern technology.
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