Iraq Economic News and Points to Ponder Monday Afternoon 1-22-24

Tlm724 Administrator Bondlady’s Corner

Can Iraqi Banks Provide Foreign Currency Directly? 

Money  and business   Economy News – Baghdad   Advisor to the Association of Private Banks, Qusay Safwan, confirmed today, Monday, that Iraqi banks can currently provide foreign currency directly, indicating that the bank does not have the right to receive dollar transfer amounts and give them in Iraqi dinars.

Qusay said, “The policy of the Central Bank has moved from providing the dollar through import by the Central Bank to Iraqi banks,” according to the Rudaw Media Network.

He added, "Iraqi banks, whether private or public, have a section of customers who obtain income through state partnerships or contracts, and the Central Bank has provided an opportunity for these banks to feed these accounts through banks that carry out the process of transferring funds directly," pointing out that "the banks Iraq is currently able to provide foreign currency directly, because the central bank allowed these banks to buy dollars at the parallel market price.”

He added: "It is also possible to enhance their accounts through the presence of non-oil exports by some companies and individuals and feeding these accounts with dollars. These banks can have a dollar balance on hand from which they can feed these accounts, and then carry out the import process so that the owner of this... Account in foreign currency on a regular basis.

Safwan explained that “a portion of the banks had dollar accounts for some customers that they disposed of. As you know, banks receive deposits and grant credit, and a portion of these banks had dollar products that were included in dollar financing. When the Central Bank converted the contract formula to the Iraqi dinar, The installments recovered from the parties granting credit have become dinar accounts.”

While he pointed out that “the Central Bank addressed this issue by allowing these banks to import dollars from abroad”; He noted that "gradually the Iraqi market will turn to the dinar," stressing that "the bank has no right to receive dollar transfer amounts and give them in Iraqi dinars."

The economist added, “The Central Bank now allows merchants to export and import foreign currency at a value of 40% of exports, and this percentage represents a large amount whose owner can withdraw foreign currency and resell it to the same bank at the parallel market price, so that there is a sustainable process of obtaining the dollar.”

Qusay pointed out that “there is supposed to be a legal system governing Iraqi banks, that the currency that enters the account is dollars, and therefore its owner has the right to withdraw this dollar currency at the same value and is not forced to convert it to another currency,” pointing out that “a portion of Iraqi banks It has dinar deposits and wants to have investment portfolios in different countries, to obtain returns from them through what was known as overnight investment.”

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The US Treasury Imposes Sanctions On Iraqi Figures Accused Of Supporting Iran

Political |  01/22/2024   Mawazine News – Baghdad   The US Treasury Department included, on Monday, the head of the Parliamentary Rights Movement, Representative Hussein Munis, on the sanctions list.

The sanctions included the leader of the Popular Mobilization Forces, Salah al-Maksusi, as well as the Fly Baghdad airline company.   At the end of last year, the US Treasury Department imposed sanctions on the Secretary-General of the Sayyed al-Shuhada Brigades, Abu Alaa al-Wala’i, and a number of leaders in the Popular Mobilization Forces.   https://www.mawazin.net/Details.aspx?jimare=240860

Al-Rafidain Announces The Offering Of The Third Issue Of Emaar Bonds

Economy News _ Baghdad   Today, Monday, Rafidain Bank announced the offering of the third issue of (Emaar bonds).   The bank said in a statement received by Al-Eqtisad News, “In a step to enhance the investment aspect and in line with the directives of the Ministry of Finance, we announce the offering of the third issuance (Emaar bonds) for sale to citizens until January 30, 2024, and with the same previous mechanism for the first and second issues.”

He added, "The bonds will be available in two categories:

- A 500,000 dinar bond with an annual interest rate of 6 percent paid every six months for two years.

- A 1,000,000 dinar bond with an annual interest rate of 8 percent paid every six months for a period of four years.

The bank confirmed that “the person Anyone wishing to purchase bonds must submit a direct request to the bank, bringing with him the original identification documents,” explaining that “the buyer will be given a receipt by the bank in exchange for the amount he paid to purchase the bond. The buyer will keep this receipt until the bond is prepared, and the buyer will bring the aforementioned receipt to the bank.” To receive the bond after it is prepared.”

He stated that “bond trading takes place in the stock market, buying and selling. In addition, the bond’s statute of limitations is 10 years after maturity, and then it is transferred to the Ministry of Finance,” pointing out that “purchasing and trading of the bonds offered (Emaar bonds) Exempt from taxes according to what was stated in Federal Budget Law No. 13 of 2023.”

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Parliamentary Finance Reveals The Most Prominent Amendments That Will Be Made To The 2024 Budget

Money  and business  Economy News – Baghdad  Today, Monday, the Parliamentary Finance Committee revealed the amendments that will be made by the government to the 2024 budget tables, noting that the variables in the 2024 budget tables will be sent to Parliament next month for approval.

Committee member, Moeen Al-Kadhimi, said in a statement followed by Al-Eqtisad News, that “the Finance Committee met yesterday, Sunday, with the Minister of Finance, in which many topics were discussed related to the changes that will be made in the 2024 budget tables.”

He added, "The most important variables are an increase in the allocations for rations, social care, and allocations for purchasing rice and wheat from farmers, in addition to an increase in allocations related to the electricity sector and the costs of oil production."

Al-Kadhimi indicated that “the amendments to the 2024 budget will be submitted to the House of Representatives next month for approval.”  https://economy-news.net/content.php?id=39699

Oil Prices Fell For The Second Day In A Row

Monday 22, January 2024 | Economical Number of readings: 300  Baghdad / NINA / Oil prices fell, today, Monday, for the second day in a row, under pressure from global demand expectations and their impact outweighing geopolitical concerns in the Middle East and an attack on a Russian fuel export station at the weekend.

The price of Brent crude fell 41 cents, equivalent to 0.5 percent, to $78.15 per barrel after falling 54 cents upon settlement on Friday, and West Texas Intermediate crude futures contracts for the nearest February delivery contract fell two years, to $73.39 per barrel.

The most active March contracts for West Texas Intermediate crude recorded $72.95 per barrel, down 30 cents./End 9   https://ninanews.com/Website/News/Details?key=1102391

Government And Central Bank Meetings In Davos To Shorten The Time Towards Financial And Banking Reform

Economy News – Baghdad   Samir Al-Nusairi  On the sidelines of the Davos Forum in its 54th session held in Switzerland last week, Mr. Prime Minister, his accompanying delegation, and Mr. Governor of the Central Bank continued to hold meetings, understandings, and negotiations with the World Bank, the International Monetary Fund, the President of the European Bank for Reconstruction, the American bank, J.P. Morgan, and international financial institutions, with the aim of accelerating the procedures that... It is implemented by the government in cooperation with the Central Bank towards achieving financial and banking reform.

In implementation of what was stated in the twelve axis of the government curriculum (financial and banking), in which the government’s program for the financial and banking sector was determined and strategic policies and procedures were drawn up in paragraphs (1-7).

To restructure the general budget, manage public money, reduce the pressure on consumer spending in favor of projects and programs for sustainable development, and pressure public debt to a minimum, and limit external borrowing to investment and service projects. The borrower will repay the loan from the project’s revenues, and establish the Iraq Fund for Development and include it in the general budget in 2023.

Controlling border crossings, reforming the tax and public sector systems, maximizing revenues for economic productive sectors other than oil, and reaching 20% ​​in budget revenues over the next 3 years. The primary and important goal is to reform the banking and private sector in accordance with what was stated in Paragraph (7), which considers financial and banking reform to be the beginning of reform.

A successful economy, with a focus on structuring and empowering government banks, reconsidering their work, and empowering private banks to be able to truly support investment and development.

In fact, the government and the Central Bank have initiated contractual and negotiating procedures with the international auditing and consulting firm Ernst & Young, under the direct supervision and follow-up of the Prime Minister, and his emphasis on the company’s global programs being applicable and different from previous experiences, in a way that ensures achieving the goal according to the time period planned for project completion. Completely.

And the meeting with the CEO of the American bank JP Morgan on the sidelines of the Davos Forum held in Switzerland and asking him to cooperate with the Central Bank and banks to open accounts for Iraqi banks to organize financing of foreign trade and help accelerate digital transformation applications and the use of electronic payment technologies, in addition to the close follow-up of the Minister of Finance and the Governor of the Bank. Iraqi Central Bank.

With regard to banking reform, the Central Bank made great efforts to implement what was stated in the government curriculum in the face of the challenges facing the reform process, as the regulation of foreign trade financing and digital transformation in the banking sector were achieved in 2023, the near launch of a national lending strategy, and the establishment of a Riyada Bank to finance small and medium enterprises, and work continues to reduce... Fluctuation of the exchange rate of the cash dollar in the parallel market. In general, the Central Bank’s plans aim to achieve my goals:

First - Developing and reclassifying the Iraqi banking system, enhancing citizens’ confidence in it, and providing financial solvency that enables it to meet requests quickly and when required.

2-Transforming banks to their primary function, which is lending for sustainable development.

3- Banks that do not provide loans and banking facilities that help in development lose their meaning as banks, which requires a specific stance towards them from the Central Bank.

4- Banks are the lever of development and the importance of the Ministry of Finance and the Central Bank to support banks, develop their functions, and rely on their own capabilities in dealing with reputable global correspondent banks and to be regulated in the global banking system in accordance with international standards and to obtain internationally accredited classification.

5- Withdrawing funds that are outside the banking cycle and entering them into the banking system by providing comprehensive banking products and services to customers without delay, smoothly, easily and transparently.

All of the above objectives, although the period specified for their implementation according to the government timetable ranges between (1-4) years, the strategy of the government and the Central Bank for the year 2024 will shorten the time and achieve most of the above objectives.

There are banks that are moving towards the required development, banks that still need an additional period of time to achieve their goals, and there are troubled banks that are now making exceptional efforts from the central bank and the departments of these banks to rehabilitate them.

What concerns us here is the real functional role of banks in providing loans and banking facilities and the transition from the banking role to the developmental role. There are two important observations that must be taken into consideration with regard to providing loans and banking facilities to stimulate the economy.

First: The nature of the banks’ activities depends on the nature of the activities of the economic sectors, and that the economic activity is concentrated in foreign trade (imports), so it requires controlling imports, supporting the local product, and supporting the private industrial sector, which the government is currently working to promote with calculated executive measures and with the cooperation of all other sectors.

Second: It is necessary to provide a legal environment and extend the authority of the law in order to eliminate the phenomenon of defaulting on loans by making legislative amendments and treating private sector debts in the same manner as government sector debts as premium debts that must be repaid, which will help expand the private banking sector by granting all types of bank financing. .

The other important thing is the transition of the government and private banking sector to a solid and developed economic sector that is committed to international regulations, rules and standards for compliance, anti-money laundering, financial reporting and risk management, and thus to truly be a lever for development.

Contributing to stimulating the economic cycle by activating and supporting financing for small and medium enterprises and large development projects, through which the building of a solid national economy and sustainable development is achieved that ultimately serves the Iraqi people and their aspirations for a better life.

This means that each government or private bank must have a plan with specific goals for the four years specified in the government curriculum and under the supervision and follow-up of the Central Bank in the areas of development of payment systems and modern banking technologies, the transition from dealing in cash to dealing with modern electronic payment methods in accordance with international standards, and the presentation of new banking products to stimulate inclusion.

Financial capacity building, training and qualification of human resources, achieving the goal of investing in human capital and developing the structural structure of the banking sector.

Banks also pay attention to applying financial stability standards, which are financial safety indicators such as the capital adequacy ratio, the liquidity ratio, and the profitability ratio such as the ratio of profit and net profit to capital, the ratio of return on assets, the ratio of return on shareholders’ equity, the ratio of activity costs, financial leverage, and the ratio of investment of funds, in addition to adopting indicators to measure efficiency. the performance. 01/21/2024 - https://economy-news.net/content.php?id=39640

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Provoking Points To Ponder on Adversity:

In victory even the cowardly like to boast, while in adverse times even the brave are discredited.  - Sallust

Adversity is sometimes hard upon a man; but for one man who can stand prosperity, there are a hundred that will stand adversity.  - Thomas Carlyle

Some knowledge and some song and some beauty must be kept for those days before the world again plunges into darkness.  - Marion Zimmer Bradley

There is not enough darkness in all the world to put out the light of even one small candle.  - Robert Alden

 http://famousquotesandauthors.com/topics/adversity_quotes.html

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