Iraq Economic News and Points to Ponder Monday Afternoon 1-8-24

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The Sale Of Dollars To Travelers In Iraqi Banks Stopped

Economy     breaking     Iraqi banks     Sell ​​the dollar     Travelers   2024-01-06 23:04  Shafaq News/ The sale of the dollar to Iraqi citizens wishing to travel outside the country has stopped in all government and private banks, according to what an informed local source said on Sunday.

The source told Shafaq News Agency that the reason for the suspension is that most government and private banks do not have the quota allocated for distribution by the Central Bank of Iraq.

The source revealed that procedures are being followed on a timely basis to stop the dollar selling platform, likely to generate a significant rise in the dollar exchange rate in local markets.

In addition, economic expert Muhammad Al-Hassani told Shafaq News Agency that the controls and instructions placed on the electronic platform are very complex, and most often the traveler cannot obtain the dollar because the quantity runs out.

The Iraqi traveler to countries specified by the Central Bank is given an amount of $3,000, and in the case of treatment, he and the accompanying person are given $6,000 at the official rate, with the exception of Iran, Syria, and Lebanon.

The dollar exchange rates recorded, this morning, Sunday, 152,850 Iraqi dinars for every 100 dollars, in the parallel market, while the official price is 132,000 thousand dinars.

https://shafaq.com/ar/اقتصـاد/توقف-بيع-الدولار-للمسافرين-في-المصارف-العراقية

Economists: Government Measures Gradually Reduced The Dollar Exchange Rates

Investigations and reports    11-15-2023, 14:02  Baghdad - IA - Nassar Al-Hajj  With the start of announcing the package of measures to address the difference in the exchange rate, and its spread in the media, the dollar exchange rates began to gradually decline below 160 thousand dinars for every 100 dollars.

While economists praised this package, which they described as strict, limiting speculators in exchange rates, putting the wheel of dollar prices on the right track and returning them to what they were before.

The financial advisor to the Prime Minister, Mazhar Muhammad Salih, confirmed to the Iraqi News Agency (INA), that  “the country’s foreign currency reserve is the largest in Iraq’s financial history and exceeds 100 billion dollars, as  it constitutes the central reserve wallet for Iraq,” indicating that

“market demand to finance exchanges Foreign exchange for the private sector is done through those official reserves that the monetary authority displays through its platform at the official exchange rate of 1,320 dinars per dollar.  He added, "The high commercial efficiency of the country's foreign currency reserves has its highest standard indicators for a period of more than (fifteen commercial months), while the global standard is about (three months)."

 He added,  "At a time when the demand for foreign currency is financed through the Central Bank of Iraq platform and bank balances are enhanced in various foreign currencies to finance private sector foreign trade, which constitutes 85% or more of the actual need of the demand for external transfer and in accordance with governance rules and standards."

Globally,  despite this, there is a demand for the cash dollar to finance commercial operations of very specific commodities that do not exceed five commodities, and

forces from within the market are trying to purchase them from outside the official commercial mechanisms by resorting to obtaining the cash dollar from the parallel market (which is the market that does not It constitutes only 10% of the demand for foreign currency allocated for travel outside the country to finance its informal trade.

 He continued, "These are commercial actions that are not legally recognized by the financial, commercial and banking departments and are carried out for many reasons, including tax or customs evasion or evasion of inspection and quality control procedures." He pointed out that

"the economic policy in general and the monetary policy in particular have all the economic capabilities to control the noise of the parallel market,

which is represented by combating illegal commercial activities above all, as the state currently undertakes the policy of defending economic stability, especially in providing sufficient commodity supply for the goods that...

It affects the life of the citizen directly, at moderate prices, financed at an exchange rate of 1,320 dinars per dollar on a permanent basis, and in two directions.

The first: providing additional supportive food and medicine baskets, construction baskets, and high-demand spare parts, and selling them at the official stable exchange rate through the cooperation mechanism between the commercial arm of the state and the national private sector, and

the second: The monetary authority has adopted new mechanisms by providing liquid foreign currencies in addition to the dollar currency (and from a basket of various foreign currencies) to meet travel needs according to the traveler’s destination, especially for Hajj, Umrah, and tourism in its various aspects and for various neighboring and distant countries, in addition to facilitating the use of payment cards with very high flexibility.” He pointed out that

"the policy package aims to contain the noise made by foreign currency speculators in the parallel market in order to profit at the expense of economic stability," noting that "the basic trends in economic policy are currently being implemented by isolating the effects of the parallel or black market and limiting its illegal activities from stability."  The overall price system in the country.

For his part, a member of the Parliamentary Finance Committee, Mustafa Al-Garawi, said,

“The more bank accounts are strengthened and the number of outlets through which the dollar is financed increases, this will lead to the provision of a larger amount of currency and thus the pressure on it within the markets will decrease and lead to relative stability and a decrease in the exchange rate.”"

 He explained, "Government measures regarding control of ports, customs, and import procedures, as well as the Ministry of Commerce's procedures and control of imported materials, will prevent citizens' need to use the dollar and import from countries outside the window."

While the financial and economic expert, Safwan Qusay Abdel Halim, pointed out that “the Central Bank seeks to approach the Iraqi market’s need for foreign currencies, especially since many Iraqi traders deal with the Asian markets, whether Chinese or Indian, as well as with the Gulf markets through the United Arab Emirates and even The Kingdom of Saudi Arabia, as well as dealings with the European Union and Turkey.”

 He added, "The presence of a basket of foreign currencies, the Chinese yuan and the Indian rupee, will contribute to reducing the period of external financial transfers through the electronic platform, as

these selected banks will have their balances enhanced through Citibank and JP Morgan, so that there will be direct payment through the banks." Jordanian foreign currencies to correspondent banks for suppliers. He added,

"We look forward to this measure being able to encourage Iraqi merchants, whether in Baghdad and the provinces or in the Kurdistan region, to accelerate the investment of these advantages to obtain commercial licenses and deal directly and quickly through these banks to transfer money to suppliers,

thus ensuring a decline in demand for the dollar in the informal market." Gradually, it is possible that the Iraqi dinar will support such policies.”

He called on "Iraqi merchants to comply with the documents required of them that are consistent with the desire of the American Federal Reserve and the electronic platform to ensure the nature of the supply and that the supplier is not subject to penalties for the high-risk system to ensure the smooth facilitation of transfers and documentary credits, in addition to providing merchants with heavy-type contracts with originators." Rasina is subject to the transfer system via documentary credits so that we can achieve financial stability.”

He continued,  "It is possible to force the local markets, in their various sectors, to submit to the official prices, and this will certainly contribute to stopping speculators engaging in irregular transactions and controlling the local markets."  In this regard, economic expert Nabil Jabbar Al-Tamimi said: “

The set of measures presented by the government and the central bank includes several courses of action, addressing the exchange rate crisis and resolving internal issues related to the inability of traders to enter the platform and facilitating procedures,” pointing out that

“the negotiations conducted by... The Central Bank with the American side in Abu Dhabi, and also concluded multiple agreements, as well as dealing in many currencies, are all positive messages sent by the government to the market, merchants, and banks to facilitate the work of dollar trading and currency exchange, and  as a result, they give messages that can reduce the exchange rate.

Therefore, these measures have had a positive impact on market fluctuations and the decline in the price. Exchange". He pointed out that  "it is possible that the dollar exchange rate will decline further until the official price is reached, especially if serious work is done to resolve this issue in cooperation with the government and the Central Bank."

In turn, economic expert Ahmed Abd Rabbo confirmed that  “the reform packages launched by the Central Bank have had positive effects on the parallel market,” noting that

“there is a need to significantly restore confidence in the banking system and for there to be consultative decisions that take consultation between the Central Bank and the banks.” Civil society and even government banks.

He pointed out that  "there must be more measures, including finding an appropriate formula for negotiation and continuing negotiations with the American side and with the Ministry of the Treasury in order for the dollar payments to arrive at the appropriate time.

We must also work to prevent smuggling operations and control the borders in order to prevent the exit of the dollar illegally." Official".   For his part, economic expert Osama Al-Tamimi said:

“The steps taken by the government and the central bank had a rapid impact on the decline in the dollar exchange rate in the past two days,”

stressing “the importance of the government taking strong legal deterrent measures in cooperation with the judicial and legislative authorities to deter those causing harm to the economy.”

National Bank and close all doors and roads to put an end to speculators who may take other methods to try to prove their presence again and benefit in a distorted way at the expense of the citizen.

Yesterday, Tuesday, a government source revealed a package of measures to address the difference in the exchange rate, while

indicating that Prime Minister Muhammad Shiaa Al-Sudani directed the activation of a committee to hold serious discussions with the US Treasury Department regarding transfers.

The government source stated to the Iraqi News Agency (INA), that “the government has taken a package of measures to address the difference in the exchange rate, including:   organizing the import process and   ensuring the entry of the largest number of merchants and importers to the foreign currency sales window  by facilitating account opening procedures, deposit operations, and other procedures related to issuing...

The identity of the importer, which would facilitate the “Know Your Customer” requirements for the category of merchants and importers,” noting that

“there are ongoing negotiations between the government and the Central Bank with the Iranian side to regulate trade between the two countries and make the best options regarding payment of dues and amounts, and discussions are taking place at a good pace.” 

He added, "Prime Minister Muhammad Shiaa Al-Sudani directed to work on a number of important projects to ensure that the poor and middle-income groups are not affected by the exchange rate difference, as the  Ministries of Commerce and Health are working to import important materials and provide them in Iraqi dinars at stable prices,

an example of which is the food basket project (Al-Sandah) at stable prices." ), the pharmaceutical basket, the construction basket, and the basket of reserve materials for the transportation sector, some of which work began some time ago.” 

He continued, "The government is now working on an (equal deal) project to exchange trade and imports with some countries, such as China and India, and in their own currencies from Iraq's main trading partners, such as India, China, and some neighboring countries," pointing out that

"the government is currently studying the establishment of a free zone to import materials, and from...

Then market it to the private sector and ensure its delivery to the consumer at competitive prices and in the Iraqi dinar.

The government is also currently studying a re-export project, and there are important discussions in this regard.”  He pointed out that "the government issued a series of measures to develop electronic payment systems and reduce dependence on cash.

It will also issue in the coming days a series of other decisions related to pricing and incentive policy for services provided through electronic payment." 

He explained, "Prime Minister Muhammad Shiaa Al-Sudani directed the activation of a joint committee between the government, the central bank, and the private sector, under the supervision of his office, to hold serious discussions with the US Treasury regarding transfers through the foreign currency sales window, and the committee has begun its meetings from now." 

He pointed out that  "the government is conducting ongoing discussions with the Central Bank of Iraq regarding a number of topics, including facilitating procedures related to Iraqi banks importing the (cash) dollar.

This process has already begun with some banks importing the dollar, and  the process will expand to include other banks, and work is also underway."

To proceed with concluding agreements to supply the currencies of some countries to be provided through banks and banking companies to meet the needs of Iraqi tourists and pilgrims going to those countries without the dollar currency.

Earlier, a government source revealed an Iraqi-American agreement to strengthen the dollar balance of 10 banks.  The source told the Iraqi News Agency (INA):

“In light of the recent meetings of the Central Bank with the American side, the number of banks whose balance can be directly strengthened in US dollars has become 10 banks, five of which are through Citi Bank , and the other 5 are through JP Morgan Bank.  He added, "The number of banks whose balances in the Chinese yuan will be strengthened through the Singapore Development Bank will become 13," explaining that  "the banks that have strengthened their accounts in Indian rupees with the Singapore Development Bank are two, and other banks will be added during the next two weeks."

https://www.ina.iq/197383--.html

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Provoking Points To Ponder on Adversity:

Remember that the Devil doesn't sleep, but seeks our ruin in a thousand different ways- Angela Merici

Down you mongrel, Death! Back into your kennel!- Edna Saint Vincent Millay

He that wrestles with us strengthens our nerves and sharpens our skills. Our antagonist is our helper.- Edmund Burke

The block of granite which was an obstacle in the path of the weak becomes a steppingstone in the path of the strong.- Thomas Carlyle

Strong people are made by opposition, like kites that go up against the wind.- Frank Harris

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