Iraq Economic News and Points to Ponder Monday AM 1-6-25
Economist: The Government’s Measures Did Not Close The Gap Between The Official And Parallel Price Of The Dollar
January 5 10:55 Information / Baghdad...Economic affairs researcher Diaa Abdel Karim said that government measures regarding government and private banks and issuing decisions about exchange companies were unable to close the gap between the official and parallel dollar exchange rates. Abdul Karim told Al-Maalouma,
“The parallel exchange rate for the dollar is approximately 20,000 Iraqi dinars higher than the official one, as it is a big difference with the official selling price at the Central Bank outlets, and it requires the government to intervene to take further measures to eliminate this difference.”".
He added, "There is an urgent need to take measures that would stop any transactions in dollars at home, including ending transactions in dollars regarding the buying and selling of cars in trade showrooms, where citizens resort to buying dollars from banking outlets in order to go to official or private showrooms to buy a car." He stated,
“The government can open a window and allocate it to sell dollars for the purpose of buying a car,
or
impose strict control and force official exhibitions not to deal in dollars, in order to limit foreign currency to foreign transfers, travel, and imports, and
the dollar is sold in official outlets only, in order to end the difference between the official and parallel prices.”. End25n
Expert: Jordanian And Gulf Banks Control The Iraqi Banking Sector And Push It Toward Collapse
January 4 18:35
Information / private..
Economic expert Mustafa Akram Hantoush confirmed today, Saturday, that the
banking system is going through a major crisis, noting that
Gulf and Jordanian banks have now controlled the monetary and dollar sector inside Iraq.
Hantoush said in a statement to the Maalouma Agency,
"The Iraqi banking system is almost non-existent at the present time, as four or five Gulf and Jordanian banks control the movement of funds." He added,
"Four Jordanian banks submitted applications to enter the Iraqi market, and two of them succeeded in operating, while two others, Al-Ittihad and Housing, are still under study." He explained,
"This situation strengthens the dominance of these banks over the dollar, while local banks are facing major challenges, as some of them remain in the market, while others are forced to search for agreements with Jordanian and Gulf banks in order to continue working," adding,
"Whoever does not succeed... In reaching agreements with these banks, he will move towards merging or exiting the market.” He pointed out that
"the banking system was previously suffering from weakness in its structure, and
today it is in a state of complete collapse," stressing that
"it has become very difficult to obtain loans in Iraq easily, and
whoever succeeds in this needs relationships and mediation, which reflects the situation in Iraq."
"Stagnation and paralysis in the Iraqi banking system."
It is noteworthy that the United States imposed sanctions on 34 Iraqi banks in an attempt to restrict the Iraqi economy, which opens the way for five Jordanian and Gulf banks to enter the Iraqi market, with the aim of completely controlling the economy amid the silence of the Iraqi government. 25 d finished
https://almaalomah.me/news/87219/economy/خبير:-المصارف-الأردنية-والخليجية-تسيطر-على-القطاع-المصرفي-ال
Continuing The Iraqi Currency Auction: Enhancing External Balances And Banks’ Interest In Cash Carriers
January 5, 2025 Last updated: January 5, 2025
Independent/- The Central Bank of Iraq began the beginning of 2025 by continuing its monetary policy through the foreign currency auction, as
it organized an auction on Sunday, January 5, 2025, in a new step towards enhancing external balances of hard currency,
which reflects the continuity of the bank’s strategies in
supporting exchange rate stability and
ensuring Liquidity required in the markets.
Auction details and exchange rates
In this context, the Central Bank of Iraq sold in its last auction an amount of 297 million 78 thousand and 208 dollars, at different exchange rates depending on the type of transactions.
A base exchange rate of 1,310 dinars per dollar was set for documentary credits and international settlements for electronic cards, while a price of 1,310 dinars per dollar was set for external transfers, while the cash sale price was 1,305 dinars per dollar.
Sales Distribution: Boost balances for cash withdrawals
The data showed that
most of the dollar sales at the auction went to strengthen balances abroad, as foreign remittances amounted to 279 million 828 thousand and 208 dollars, equivalent to about 93.91% of the total sales.
As for cash withdrawals, they did not exceed 17 million and 250 thousand dollars, which highlights the greater trend towards enhancing balances outside Iraq.
Number of participating banks and companies
The sales were distributed among a number of banks and exchange companies participating in the auction. The
number of banks that purchased cash dollars reached one bank, while the
number of banks that requested an increase in external balances reached 9 banks.
19 exchange companies also participated in the auction,
which reflects the diversity of participants in the dollar sale process and increases the flexibility of the auction organization mechanism.
Strategic objective of the auction
The currency auction is considered one of the effective tools used by the Central Bank of Iraq to achieve several main goals, including:
1. Exchange rate stability: By controlling the supplied quantities of dollars, the central bank works to limit fluctuations in the exchange rate of the Iraqi dinar against the US dollar, which enhances economic stability.
2. Meeting the needs of the local market: By providing hard currency to importing companies, the bank contributes to ensuring the continuity of the flow of goods and products to the local market.
3. Strengthening external reserves: Strengthening balances abroad through external remittances is part of ongoing efforts to maintain the stability of the financial system and meet import and international trade needs.
Challenges and criticisms
Despite the significant economic goals that the central bank seeks to achieve through currency auctions, these operations are not without some challenges.
The most prominent of these challenges are:
•Depletion of cash reserves: Concerns are growing that the expansion of selling the dollar may lead to a reduction in the country’s cash reserves, threatening financial stability in the long term.
• The possibility of corruption and money laundering: Questions are raised from time to time about how some companies or banks exploit the currency auction to smuggle or launder money, which requires intensifying oversight and scrutiny of buying and selling operations.
Future actions and directions
To reduce concerns related to these challenges, the central bank seeks to enhance transparency in auction processes.
These steps include
publishing auction details periodically, and
implementing advanced control systems to ensure the integrity of transactions.
In addition, the bank seeks to diversify the monetary tools used to achieve monetary policy objectives without harming the national economy.
Conclusion
The currency auction organized by the Central Bank of Iraq remains a key tool in implementing the country's monetary policies.
Despite the challenges and fears that accompany it,
the Central Bank continues to organize auctions to
stabilize the exchange rate,
meet the needs of the local market, and
enhance balances abroad.
While pursuing ongoing reforms and enhancing transparency, this auction remains an essential part of Iraq's efforts to achieve sustainable economic stability.
https://mustaqila.com/مواصلة-مزاد-العملة-العراقية-تعزيز-الأ/
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