Goodbye dollar auction.. Central Bank announces the end of 20 years of billions and suspicions
What will happen on Sunday?
Don't get too excted they had an auction today
The matter has been settled.. Iraq will no longer offer its precious dollars in the controversial dollar auction, or what was called the foreign currency sales window and the electronic platform. After 20 years since the start of this procedure, Ammar Khalaf, Deputy Governor of the Central Bank, confirmed in a statement to the 964 Network that the dollar platform has become closed in compliance with the date set by the governor to close it at the end of 2024. Khalaf denied all rumors about the possibility of extending the platform’s work, and spoke with great positivity, reassuring the market and consumers that the overwhelming majority of traders have already adapted to the new system in which the Central Bank does not provide direct dollars to traders. But what will happen?!
The video for this blog post is below here:
The sale of the dollar was a mechanism adopted by the Iraqi government after 2003 during the era of Governor Sinan Al-Shabibi, for several goals mentioned in a study by the bank official, Dr. Walid Aidi Abdul Nabi , including controlling the exchange rate and raising the purchasing power of those with limited incomes, among others. It aims to provide hard currency to traders in order to finance their imports of goods from abroad, but the idea was later subject to much skepticism and suspicion, and the auction became one of the most frequently mentioned files in discussions about corruption, fictitious import invoices, and currency smuggling to neighboring countries, among others.
According to the new system after the window closes, traders will have to deposit their money in dinars in Iraqi banks that have entered into partnerships with foreign banks (called correspondent banks). These correspondent banks with American banks will undertake all verification and compliance procedures, while the Central Bank will only be tasked with strengthening the dollar balances in the accounts of banks that are able to pass all these procedures. Many experts believe that this step has relieved the Central Bank of responsibility for any potential manipulation of invoices or attempts to smuggle currency, and the Central Bank has thus protected itself from any potential American sanctions with their dangerous implications for the country’s economy.
Khalaf said, “The date for closing the platform is fixed, it will not change and will not be extended. The banks have been preparing since the beginning of this year when Governor Ali Al-Alaq announced his intention to close the platform.”
According to Khalaf, “transfers are made by strengthening the balances of Iraqi banks, and 97% of transfers are now made according to the new mechanism. This will be noticeable during the first days of the new year, as the Central Bank’s transfers to banks that are operating at full capacity will not change by strengthening the balances with correspondent banks.” However, he left the door open to the possibility of a very slight and ineffective decline in the Central Bank’s sales.
He pointed out that “the majority of banks in Iraq have correspondent banks and have been operating according to the new mechanism since the beginning of this year, and traders will not face any problem unless their money is in banks without correspondent banks.”
In numbers.. The decline in the value of the Iraqi dinar
link interesting time to share this info hmmmm
Today, Friday (December 27, 2024), the economic expert, Manar Al-Abidi, determined how much the Iraqi dinar has lost in value.
Al-Obaidi explained in a tweet followed by "Baghdad Today" that "the value of any currency is determined based on two basic factors, which are the amount of currency issued, which is the total cash pumped by the central bank, and the size of reserves, which includes foreign currencies, investments, and gold held by the central bank."
He explained that "the situation at the end of 2023, the amount of currency issued reached 101 trillion dinars, and the value of official reserves reached 145 trillion Iraqi dinars."
Al-Obaidi added, "As for the situation at the end of 2024, the amount of currency issued remained at the same level of 101 trillion Iraqi dinars, and the value of official reserves decreased to 139.7 trillion Iraqi dinars."
He pointed out, "The impact on the value of the Iraqi dinar, despite the stability of the issued monetary mass, the decrease in the value of official reserves by 5.3 trillion Iraqi dinars led to a decline in the purchasing power of the dinar, and as a result of this decrease in reserves, the actual value of the Iraqi dinar decreased by 5.3%."
Al-Ubaidi pointed out that "the continued decline in the actual value of the dinar will lead at some point to an increase in inflation as a result of the decline in the strength of the dinar compared to reserves alone. All this while the average price of Iraqi oil was high, so how will things turn out in the event of a decline in oil prices?"
Expert: Central Bank decisions threaten banking sector and stability of national economy
Researcher and specialist in financial and banking affairs, Mustafa Hantoush, confirmed today, Monday, that the decisions of the Central Bank threaten the banking sector and the stability of the national economy.
Hantoush said in a statement to Al-Maalouma Agency that "the recent decisions of the Central Bank of Iraq, which included stopping the financial transfer platform (FITR) and handing over the management of the Iraqi dollar to four banks owned by investors, some of which belong to countries such as Jordan and the Gulf, constitute serious repercussions.”
He pointed out that "these policies may lead to the collapse of the Iraqi banking system and the exacerbation of economic crises, noting that more than 100,000 jobs in the private banking sector are threatened with loss in favor of foreign banks, which constitutes a major blow to banking autonomy.”
He explained that "the monopoly of the dollar by these banks will lead to difficulty in stabilizing the exchange rate and increasing volatility, which will exacerbate the economic situation and weaken competition in the banking sector."
As part of the solutions, Hantoush called for "extending the work of the money transfer platform in coordination with the new US administration, and enabling Iraqi banks to open dollar accounts in international banks such as Citibank and JP Morgan, as is the case in the countries of the region."
He also stressed the "importance of transparency and announcing the mechanisms of cooperation with Ernst & Young regarding transfers in other currencies such as the euro, yuan and dirham, in addition to revealing the results of the contract with Oliver Wyman regarding the status of the 28 sanctioned Iraqi banks."
At the end of his statements, Hantoush called for “addressing the central banks of countries such as Turkey, the Emirates, China and India to open branches of Iraqi banks in those countries, which would contribute to transforming the banking relationship from remittances to a direct commercial partnership.
Al-Sudani receives official invitation to visit Japan
Prime Minister Mohammed Shia Al-Sudani received an official invitation to visit Japan today, Sunday (December 29, 2024).
The Prime Minister's Media Office stated in a statement received by "Baghdad Today" that "Al-Sudani received the new Japanese Ambassador to Iraq, Akira Endo, on the occasion of his assumption of his duties."
He added that "Al-Sudani received an invitation from the Japanese Prime Minister to visit Tokyo, presented to him by the Ambassador, and he wished him success in his mission," stressing "Iraq's aspiration to further strengthen the bonds of joint bilateral cooperation between the two countries, and to strengthen the constructive partnership in various fields of development, for the benefit of the peoples of Iraq and Japan."
Al-Sudani stressed, according to the statement, "the importance of the role that Japan can play as an active member in the international arena, with regard to stopping the aggression on Gaza, supporting stability in Lebanon, and providing relief to the Palestinian people who are being subjected to systematic genocide, in addition to its role in preventing the expansion of the conflict in the Middle East, and strengthening efforts for stability and calm."
The Central Bank announces the positive indicators achieved in the third quarter of 2024
The Central Bank of Iraq announced, today, Sunday, the positive indicators achieved in the third quarter of 2024.
A statement by the bank, received by the Iraqi News Agency (INA), stated that "the total deposits in banks operating in Iraq recorded a growth of (4.2%) in the third quarter of 2024, as their value amounted to (127.6) trillion dinars, compared to their value of (122.4) trillion dinars in the third quarter of 2023, while cash credit granted by public banks recorded a growth of (11.6%) in the third quarter of 2024, as its value amounted to (72.7) trillion dinars, compared to its value of (65.1) trillion dinars in the third quarter of 2023."
The bank stated that "deposits in private banks operating in Iraq recorded a growth of (14%) in the third quarter of 2024, as their value amounted to (18.7) trillion dinars, compared to their value of (16.4) trillion dinars in the third quarter of 2023, while cash credit granted by private banks achieved a growth of (15.1%) in the third quarter of 2024, as its value amounted to (12.2) trillion dinars, compared to its value of (10.6) trillion dinars in the third quarter of 2023," noting that "these rates reflect the increased confidence of economic units in private banks operating in Iraq."
He added, "Private sector deposits in banks operating in Iraq recorded a growth of (3%) in the third quarter of 2024, as their value amounted to (56.1) trillion dinars, compared to their value of (54.4) trillion dinars in the third quarter of 2023," indicating that "cash credit granted to the private sector by banks operating in Iraq achieved a growth of (8.6%) in the third quarter of 2024, as its value amounted to (42.8) trillion dinars, compared to its value of (39.4) trillion dinars in the third quarter of 2023, stressing that this increase reflects the increased confidence of the private sector in banks operating in Iraq."
The bank revealed, according to the statement, that "the narrow money supply in Iraq recorded a growth of (4.1%) in the third quarter of 2024, as its value reached (158.6) trillion dinars, compared to its value of (152.4) trillion dinars in the third quarter of 2023, while the broad money supply in Iraq recorded a growth of (3.3%) in the third quarter of 2024, as its value reached (179.8) trillion dinars, compared to its value of (173.9) trillion dinars in the third quarter of 2023."
He added, "The gold reserves of the Central Bank of Iraq recorded a significant growth of (57%) in the third quarter of 2024, as their value amounted to (16.8) trillion dinars, compared to their value of (10.7) trillion dinars in the third quarter of 2023," stressing that "the annual inflation rates in Iraq are among the lowest annual inflation rates in the countries of the region for the months of August and September of 2024, as the rate remained acceptable at (3.7%) and (3.1%) respectively, and this reflects price stability and the success of monetary policy in Iraq."
Parliamentary move towards the Central Bank regarding the dollar exchange rate
The Parliamentary Finance Committee threatened, on Sunday, to host the governor of the Central Bank if the exchange rate continues to fluctuate in the parallel market.
Committee member MP Jamal Kojer said in a statement to Al-Maalouma Agency, “The issue of the fluctuation of the dollar exchange rate in the parallel market is unstable and may be temporary, but the committee follows up on the parallel market on a daily and continuous basis."
He added, "If the exchange rate continues to fluctuate in the parallel market, the committee may move to host the governor of the Central Bank to discuss the reasons for the continued fluctuation and to develop measures to limit it."
It is noteworthy that the parallel market has recently witnessed a noticeable increase in the exchange rate of the dollar against the Iraqi dinar, as it exceeded 150 thousand dinars for every hundred dollars, despite the government measures taken to control its official price.
Economic Advisor: Our country is ranked ninth in the world in natural resources
The economic advisor to the Prime Minister, Mazhar Mohammed Salih, said, “What the economic policy in our country aspires to is thinking outside the box and providing sustainability in the current account surplus of the Iraqi balance of payments.”
He added, “This comes through investment expansion in natural resources, manufacturing them, and preparing them for export, which provides returns that help establish a sovereign wealth fund.”
Saleh pointed out in a press statement followed by (Al-Masry - Today, Sunday), that "the most appropriate model is to generate a sovereign wealth fund {directing its investments towards internal opportunities} and according to a different vision; because our country is ninth in the world in terms of the diversity of its natural resources in the earth's interior and first in the world in terms of the concentration of wealth in one square kilometer."
Central Bank records 'significant growth' in Iraq's gold reserves
The Central Bank announced, on Sunday, that it recorded a significant growth in the country's gold reserves, while it considered the inflation rates in Iraq to be the lowest in the region during the months of August and September, of the year 2024, which is about to end.
This came in a statement issued by the bank regarding the positive indicators it achieved for the third quarter of 2024 compared to the same quarter in 2022 and 2023, considering that this reflects the success of the monetary policy adopted by the bank during 2024.
The Central Bank of Iraq confirmed that the total deposits in banks operating in Iraq recorded a growth of (4.2%) in the third quarter of 2024, as their value amounted to (127.6) trillion dinars, compared to their value of (122.4) trillion dinars in the third quarter of 2023. In contrast, the cash credit granted by public banks recorded a growth of (11.6%) in the third quarter of 2024, as its value amounted to (72.7) trillion dinars, compared to its value of (65.1) trillion dinars in the third quarter of 2023.
The bank stated that deposits in private banks operating in Iraq recorded a growth of (14%) in the third quarter of 2024, as their value amounted to (18.7) trillion dinars, compared to their value of (16.4) trillion dinars in the third quarter of 2023. In contrast, cash credit granted by private banks achieved a growth of (15.1%) in the third quarter of 2024, as its value amounted to (12.2) trillion dinars, compared to its value of (10.6) trillion dinars in the third quarter of 2023, noting that these rates reflect the increased confidence of economic units in private banks operating in Iraq.
The statement added that private sector deposits in banks operating in Iraq recorded a growth of (3%) in the third quarter of 2024, as their value amounted to (56.1) trillion dinars, compared to their value of (54.4) trillion dinars in the third quarter of 2023, indicating that cash credit granted to the private sector by banks operating in Iraq achieved a growth of (8.6%) in the third quarter of 2024, as its value amounted to (42.8) trillion dinars, compared to its value of (39.4) trillion dinars in the third quarter of 2023, stressing that this increase reflects the increased confidence of the private sector in banks operating in Iraq.
The bank revealed that the narrow money supply in Iraq recorded a growth of (4.1%) in the third quarter of 2024, as its value reached (158.6) trillion dinars, compared to its value of (152.4) trillion dinars in the third quarter of 2023. In contrast, the broad money supply in Iraq recorded a growth of (3.3%) in the third quarter of 2024, as its value reached (179.8) trillion dinars, compared to its value of (173.9) trillion dinars in the third quarter of 2023.
He added that the gold reserves of the Central Bank of Iraq recorded a significant growth of (57%) in the third quarter of 2024, as their value reached (16.8) trillion dinars, compared to their value of (10.7) trillion dinars in the third quarter of 2023.
The Central Bank noted that the annual inflation rates in Iraq are among the lowest annual inflation rates in the countries of the region for the months of August and September of 2024, as the rest of the percentage is acceptable at (3.7%) and (3.1%) respectively, which reflects price stability and the success of monetary policy in Iraq.
Development Bank announces the opening of its 31st branch in Baghdad
The International Development Bank announced, today, Sunday, the opening of the bank's 31st branch, in the Al-Amiriya area in Baghdad.
The bank stated in a statement received by the Iraqi News Agency (INA), that "This opening of the new branch of our bank in the Al-Amiriya area is the 31st branch, which is a step that reflects our aspirations for continuous growth and expanding the scope of our banking services to reach more of our valued customers."
He added, "The opening of the new branch comes within the International Development Bank's plan for 2024, and embodies our commitment to providing the highest standards of quality and banking services that meet the growing needs of our customers and contribute to supporting local economic development."
Iranian source to Baghdad Today: Al-Sudani to visit Tehran soon
A responsible source in the Iranian presidential office revealed, today, Sunday (December 29, 2024), an upcoming visit by Iraqi Prime Minister Mohammed Shia al-Sudani to the capital, Tehran.
The source said in an interview with Baghdad Today, "Al-Sudani will visit Tehran, and this visit is likely to be in the first half of January 2025, and we are coordinating with the Iraqi side regarding this visit."
He pointed out that "the visit of Al-Sudani and the accompanying ministerial delegation will focus on the situation in the region, especially in Syria after the fall of President Bashar al-Assad's regime at the hands of extremist groups on December 8."
Al-Sudani's last visit to Tehran was on May 22, to participate in the funeral of the late Iranian President Ebrahim Raisi, who was killed in the crash of his presidential plane in northwestern Iran on the 19th of the same month.
On September 11, Iranian President Masoud Pezeshkian visited Iraq for a three-day visit during which he met with officials in Baghdad. He then went to Erbil, Sulaymaniyah, Najaf, and Karbala, concluding his visit in Basra Governorate in the far south of Iraq.
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Expert: Central Bank decisions threaten banking sector and stability of national economy
Researcher and specialist in financial and banking affairs, Mustafa Hantoush, confirmed today, Monday, that the decisions of the Central Bank threaten the banking sector and the stability of the national economy.
Hantoush said in a statement to Al-Maalouma Agency that "the recent decisions of the Central Bank of Iraq, which included stopping the financial transfer platform (FITR) and handing over the management of the Iraqi dollar to four banks owned by investors, some of which belong to countries such as Jordan and the Gulf, constitute serious repercussions.”
He pointed out that "these policies may lead to the collapse of the Iraqi banking system and the exacerbation of economic crises, noting that more than 100,000 jobs in the private banking sector are threatened with loss in favor of foreign banks, which constitutes a major blow to banking autonomy.”
He explained that "the monopoly of the dollar by these banks will lead to difficulty in stabilizing the exchange rate and increasing volatility, which will exacerbate the economic situation and weaken competition in the banking sector."
As part of the solutions, Hantoush called for "extending the work of the money transfer platform in coordination with the new US administration, and enabling Iraqi banks to open dollar accounts in international banks such as Citibank and JP Morgan, as is the case in the countries of the region."
He also stressed the "importance of transparency and announcing the mechanisms of cooperation with Ernst & Young regarding transfers in other currencies such as the euro, yuan and dirham, in addition to revealing the results of the contract with Oliver Wyman regarding the status of the 28 sanctioned Iraqi banks."
At the end of his statements, Hantoush called for “addressing the central banks of countries such as Turkey, the Emirates, China and India to open branches of Iraqi banks in those countries, which would contribute to transforming the banking relationship from remittances to a direct commercial partnership.”
Document.. Exceptional measures to provide dollars for travelers during the New Year's holiday
The Central Bank of Iraq announced, on Monday, that it has accepted banks’ requests to provide dollars to travelers during the New Year’s holiday.
A document issued by the bank, obtained by Shafaq News Agency, stated, "In order to provide cash liquidity in US dollars for travelers on the New Year's holiday on January 1 and the banking holiday on January 2, requests from banks and exchange companies will be accepted from the cash sales window."
The document continued, "The sale will be on December 30 and 31 exclusively after the bank or company sells and registers no less than 50% of its last share received through the fltr platform instead of 80%."
It is noteworthy that the Central Bank had previously announced its intention to stop the electronic platform for selling the dollar at the end of this year, and thus dealing will be direct between banks and correspondent banks to sell the dollar and finance foreign trade.
Rafidain Bank
Al Rasheed Bank
Trade Bank of Iraq
Exchange companies
M cash sale window
Greetings....
Offer to provide US Dollar cash to travelers during the New Year's holiday 1/1/2025 and the holiday
2025/1/2 Banks
Banks and exchange companies’ requests to purchase dollars from the cash sales window for the days (30) 12/31/2024 will be accepted exclusively after the bank or company sells and registers no less than (50%) of
The last share received on the (FITR) platform instead of (80%).
With appreciation.
Central Bank of Iraq
Ed Ammar Hamad Khalaf
Conservative MP
12/2/2024
Video: Tabaqchali on Iraqi Markets, AI, and Cryptocurrency
https://www.youtube.com/watch?
In a new video from AI4Iraq, Ahmed Tabaqchalli, Chief Strategist at AFC Iraq Fund, discusses the progress of capital markets in Iraq, the impact of artificial intelligence and the future of crypto currency.
AI4Iraq is a non-profit organisation with roots in Iraq, Lebanon and Hong Kong. According to its website:
"We are a group of secondary school students of Iraqi background excited to be part of the roll-out of next generation technology for the betterment of Iraqi society. Our targets are in-line with the UN 17 Sustainable Development Goals (SDGs) by 2030."
Key points from the interview:
- Iraq Stock Market Context
- Iraq is considered a "frontier market of a frontier market" due to its history of conflicts
- The market has recently reached new highs but has only returned to 2014 levels, while other markets have grown much further
- Current stability (relative to Iraq's history) is enabling business growth and development
- Market Development and Investment Climate
- Baghdad is experiencing significant development and improved safety compared to 5 years ago
- The country is seeing a business boom driven by:
- Relative political stability
- Strong oil prices in 2022 providing government spending power
- Banking system improvements
- Growing private sector development
- Market Challenges
- Technical challenges:
- Lack of market makers and proper bid/offer structure
- Predominantly retail investors rather than institutional investors
- Limited market liquidity
- Underdeveloped market architecture
- Technical challenges:
- Regulatory Environment
- Mix of socialist, market-driven, and new regulations
- Contradictory rules and old structures still in place
- Regulatory framework is evolving but typically lags behind market developments
- Moving in the right direction, albeit slowly
- Institutional Investment
- Initial interest from institutional investors during 2009-2012
- Interest declined after ISIS (Dash) emerged
- Future institutional investment depends on:
- Improved market performance
- Changed international perception of Iraq
- Better market access and clarity
- Technology and AI Impact
- AI seen as a valuable tool but not immediately applicable for trading in Iraq due to:
- Insufficient market liquidity
- Lack of interconnected markets
- Absence of developed derivatives and currency markets
- More immediate AI applications in:
- Compliance monitoring
- Pattern recognition
- Risk management
- AI seen as a valuable tool but not immediately applicable for trading in Iraq due to:
- Financial Innovation
- Limited potential for cryptocurrency adoption due to:
- Need for monetary stability
- Central bank requirements
- Volatility concerns
- Reserve currency considerations
- Limited potential for cryptocurrency adoption due to:
- Investment Advice
- Emphasis on thorough research and due diligence
- Understanding risk-reward ratios
- Long-term perspective needed for frontier market investing
- Importance of patience in dealing with market development
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