KTFA:

Samson:  The Central Bank announces international cooperation with Iraqi banks

14th September, 2022

Today, Wednesday, the Central Bank of Iraq announced a work plan to link and open accounts between Iraqi banks and some international banks

The Governor of the Central Bank of Iraq, Mustafa Ghaleb, said in a press interview, which was seen by "Al-Ghad Press", that "work is currently underway with a number of sober international banks to prepare the necessary ground for banking cooperation with Iraqi banks that have outstanding performance and have a credit rating from accredited rating agencies

He added that "work is underway to study the requirements and proposals for the subject, which were submitted by some international banks for the purpose of opening accounts for Iraqi banks and opening new horizons for international cooperation

The Association of Iraqi Private Banks signed, last March, with the Federation of Egyptian Banks, in Cairo, a memorandum of understanding to develop banking relations between Iraq and Egypt

And the Central Bank of Iraq announced, in October of last year, that 19 licensed Iraqi banks had obtained a rating from accredited international rating agencies  LINK

************

Samson:  The Central Bank separates the work of the Deposit Insurance Company, the development of the payments system, and cooperation with major international banks

14th September, 2022

The Governor of the Central Bank of Iraq, Mustafa Ghaleb Mukhif, outlined today, Wednesday, his most prominent priorities and main tasks adopted by the bank, while separating a group of files, including international cooperation with major banks, the work of the Deposit Insurance Company, the performance of the banking sector and the development of the payment system.

In an interview with an economic magazine affiliated with the Central Bank, and seen by the Iraqi News Agency (INA), he said, “Everyone knows that the Iraqi economy has been accompanied during the past period by many shocks, such as the drop in oil prices and the war on ISIS terrorist, as well as the state of political instability.”

Therefore, the Central Bank of Iraq contributed to maintaining the stability of the value of the Iraqi dinar significantly, bearing the costs of imbalance in the cash flow of the general budget.

He added: "In addition, we have set our sights on moving from the process of unilateral targeting (maintaining an acceptable level of inflation) to the case of bilateral targeting represented in maintaining monetary stability and promoting growth, and for this we seek to work on activating indirect monetary policy tools, as well as the adoption of a policy of quantitative easing through the Central Bank’s initiatives, which amounted to about 18 trillion dinars, which represents a state of planned financial guidance in harmony with market economies in creating a partnership between the banking sector (conventional and Islamic) and the real sector (public and private), as strategic projects will be presented Financing it through the banking system and under the supervision of the Central Bank.

He continued his speech by saying, "One of the most important priorities of this bank, in addition to its main tasks, is to adopt the following:-

1- Adopting an efficient policy that stems from the fact that general price stability is a prerequisite for achieving sustainable growth, a pivotal element in the overall economy, and a major factor in providing a suitable environment for investment and protecting the purchasing power of the national currency.

2- Contributing to achieving sustainable development and providing job opportunities, especially since the Bank is a member of the Sustainable Development Committee 2020. 

3- Strengthening the relationship and effective coordination between the monetary policy represented by the Central Bank of Iraq and the financial policy represented by the Iraqi government (Ministry of Finance) in order to achieve the overall goals for the next stage.

4- Implementing an effective precautionary control policy by analyzing and evaluating potential risks in the banking sector.

He continued: "As is the case in all countries of the world, the banking system faced financial and health crises, which in turn led to a stagnation in economic activity at a lower level than expected, but it is acceptable in light of the multiple challenges experienced by the banking sector."

And he indicated, "The measures of the Central Bank contributed to prompting some banks to take courageous steps to strengthen the confidence of depositors and society in them, while the activities of other banks were negatively affected by these circumstances, as we expect our urgent reform efforts to bear fruit soon, and it is useful to say, that the Central Bank's initiative to support Bank liquidity and the provision of funds to those in need of citizens and companies has enhanced the performance of the banking sector and made it more involved in moving the economic wheel.

He continued: "Through the foregoing, the Financial Action Task Force (FATF) removed Iraq from the monitoring and follow-up list for the modernization phase every two years, and we are now in the process of removing Iraq from the high-risk countries according to the classification of the European Union."

And he added: “In addition, the Bank has started implementing Financial Reporting Standard No. 9 since 2017, and it has imposed on banks to apply international standards since 2019, including Standard No. 9, and with regard to financial inclusion, we have taken important steps in achieving this goal by forming a committee To prepare the national strategy for financial inclusion in cooperation with relevant international and local institutions.

Concerning keeping pace with the application of international standards, he said, "The bank keeps pace with all international standards in the field of compliance, and evaluates banks in the field of compliance and anti-money laundering on a semi-annual basis through their reports, procedures, training courses, and international certificates granted to them in this field."

He explained, "The compliance and anti-money laundering officials are appointed according to conditions determined by the Central Bank of Iraq related to banking experience and certificates, and they are not dismissed except after obtaining the approval of this bank, and their departments are independent and linked to the bank's board of directors directly in accordance with the governance guide issued by this bank."

He continued: "This bank has entered into a number of agreements with major commercial banks to open new horizons for international banking cooperation, to maintain existing relations and open new channels of communication with international commercial banks with high credit ratings characterized by low risks and the ability to achieve the objectives of the Central Bank of Iraq from By contributing to managing foreign reserves investments, facilitating external transfers and oil credits, as well as developing the capabilities of the cadres of this bank.

On the other hand, work is currently underway with a number of sober international banks to prepare the necessary ground for banking cooperation with Iraqi banks that have outstanding performance and have a credit rating from accredited rating agencies. Opening accounts for Iraqi banks and opening new horizons for international cooperation.

And he continued: “In the field of custodianship of securities, the Central Bank has contributed to facilitating banks’ access to major securities custodians by opening an account for the Central Bank of Iraq with the most important custodian institutions in the world, allowing these banks to keep or pledge their securities by opening accounts A sub-branch of the main account of the Central Bank of Iraq.

Regarding the Deposit Insurance Company, he said: “The board of directors of this bank issued a decision to grant the Iraqi Deposit Insurance Company the final license with a capital of 100 billion dinars to practice working with deposit insurance, taking into account the Law of the Central Bank of Iraq No. 56 of 2004 and the Banking Law No. 94 of 2004 and the amended Companies Law No. 21 of 1997 and Deposit Insurance Law No. 3 of 2016 provided that it is subject to the control and supervision of this bank. The members of the company’s board of directors were selected and the authorized manager was appointed, and the company’s website was also chosen to complete the procedures and start doing its business.

And the governor continued: “Here, it must be noted that the company is still in the first stage in terms of implementing its objectives and it needs media support, especially at this stage in order to communicate its objectives and the purpose of its establishment to the public, in order to enhance the citizen’s confidence in the banking sector, and all of this needs more Combined time and effort.

On the other hand, the governor said, "Within the framework of the Central Bank of Iraq's efforts to develop its infrastructure, a future vision is being developed for the development of the payments system by operating systems compatible with international best practices with the aim of enhancing financial inclusion and electronic automation through several procedures we are working on as projects for the Payments Department in The Central Bank of Iraq, which are:

A- Activating electronic collection for billing entities

B- Automating the work of ministries and government institutions 

C- A project to establish a Fast Payment system

D- A project to digitize e-learning in Iraq

E- Implementation of the “Know Your Customer” e-project K-KYC), which provides a unified database to facilitate the process of customer identification,

F - Implementation of digital financial services.

G- Developing the Real-Time Gross Settlement (RTGS) system to work in line with a unified database to facilitate the process of identifying the customer.

H - The participation of the Iraqi banking system in the regional clearing system and the inter-Arab payments clearing and settlement system.

I - Preparing the national strategy for financial inclusion and delivering electronic payment services to all segments of society.

J - Contracting with consulting companies to draw up a payment strategy and develop the structure of payment systems.

K- Contracting with external audit companies to audit the work of electronic payment service providers in terms of financial and technical terms and their compliance with international standards and the instructions of this bank.  LINK

Samson:  Egypt is preparing to introduce a new category of currency for the first time in its history

14th September, 2022

Today, Wednesday, the Egyptian Cabinet announced the approval of some decisions, including minting a new coin to be put into circulation for the first time in Egypt

The council initially approved a proposal to conclude a partnership agreement between the Public Treasury and the Egyptian mint, and the British Royal Mint, "Royal Mint", to establish a British-Egyptian mint in the Suez Canal Economic Zone

This approval comes within the framework of the Ministry of Finance’s aspiration to establish a partnership that goes beyond the idea of ​​transferring technical expertise only, and seeks a partnership based on participation in the production and operational process, with the aim of settling metallurgical industries in Egypt, and for Egypt to be a leading regional center for the production and minting of currencies for Arab, African and Middle Eastern countries, depending on local inputs in the manufacture of national currencies and currencies intended for export abroad instead of importing them as raw discs

LINK

************

Samson:  Digital currencies and inflation top the meeting of Arab central bank governors in Saudi Arabia

14th September, 2022

The Kingdom of Saudi Arabia, represented by the Saudi Central Bank “SAMA”, will host on Sunday and Monday, September 18 and 19, 2022 in Jeddah, the meeting of the 46th regular session of the Board of Governors of Arab Central Banks and Monetary Institutions, and the high-level round table workshop accompanying the meeting On "Digital Currencies for Central Banks and the Future of the Monetary System", sponsored by the Custodian of the Two Holy Mosques, King Salman bin Abdulaziz Al Saud.

The Saudi Central Bank said, in a statement today, Wednesday, that the meeting will witness the participation of a number of senior officials of the International Monetary Fund and the Financial Stability Board, as well as experts from international institutions and global central banks.

He also made it clear that the governors of Arab central banks and monetary institutions will discuss during the meeting a number of main topics; Most notably: the global inflationary wave and its repercussions on monetary policy in the Arab countries, the risks of the repercussions of climate change on the financial sector and banking services, and the challenges of shifting towards green finance, in addition to the requirements and challenges of rebuilding capital and liquidity margins in the banking sector after lifting support packages.

And the Central Bank indicated that the meeting’s agenda will include informing the governors of Arab central banks and monetary institutions about reports on the work of the committees and work teams emanating from the Council, as well as reviewing the fifth edition of the Financial Stability Report in the Arab Countries for the year 2022 AD, and the Unified Arab Economic Report for the year 2022 AD, as well as briefing on the unified Arab speech for the year 2022 AD, which will be presented by the Arab Group at the annual meetings of the International Monetary Fund and the World Bank next October 2022 AD, which reflects the views of the Arab countries towards the current economic developments.

The Governor of the Saudi Central Bank, Fahd bin Abdullah Al-Mubarak, stressed the importance of this meeting in light of the rapid events and developments that the region and the world are witnessing in all fields in the economic and financial sectors.

Al-Mubarak praised the efforts made by the secretariat of the Board of Governors of Arab Central Banks and Monetary Institutions, whose work is carried out by the Arab Monetary Fund, in following up on topics and developments, preparing for the council’s meeting, and following up on the development of the work of the committees and work teams emerging.  LINK