More Iraqi News Wednesday PM 12-2-20
More Iraqi News Wednesday PM 12-2-20
TLM724 Administrator BondLady’s Corner
Currency Auction ... "An Outlet For Corruption And A Drain On Money"
Time: 12/01/2020 23:54:39 Read: 4,953 times {International: Al Furat News} In the year 2019, the Central Bank of Iraq sold 44 billion dollars of hard currency at the Central Bank auction (the window for selling currencies), mostly intended to cover the import of materials and goods that the country needs, stabilize the price of the Iraqi dinar and prevent inflation, according to data To the bank.
However, according to Iraqi economists, the volume of Iraqi imports reached $ 18 billion, according to the economic expert, Manar al-Obeidi.
Iraqi experts warn of "currency leakage" outside Iraq due to "corruption" in the currency auction in the country. Suspect
Al-Obeidi says to the website that "there is actually a difference of about $ 30 billion between the volume of remittances abroad and the value of goods entering, which indicates that the currency auction does not do its proper duty to provide funds for the purpose of import."
The Parliamentary Finance Committee called on the words of a number of its members to "reconsider the issue of the currency auction." Committee member Ahmed Al-Saffar said in a press statement that "the issue of the currency window of the Central Bank does not exist in all countries of the world except for Iraq." Rolling Eyes
A member of the Finance Committee, Muhammad Sahib Al-Darraji, announced in a statement, on Monday, that:
Before the public prosecutor, Darraji requested and opened an investigation into the auction.
A journalist interested in Iraqi economic affairs, Bassem Al-Shara, says that "the currency auction has become a major obstacle to the liberalization of the Iraqi economy and it is only a front for financing currency smuggling operations, especially in the current year after revenues from crude oil have declined significantly."
Al-Shara says that "the auction sells large numbers of dollars a day that exceeds the needs of the Iraqi economy and does not return from them as goods except at rates that do not exceed 40 or 50 percent at best, and the rest goes to neighboring countries, especially Turkey and Iran."
The bank sells the US dollar at 1182 dinars for every dollar, but the exchange rate in the Iraqi market is about 1250 dinars per dollar, and exchange companies benefit from the currency difference.
But Salem al-Douri, a businessman from Baghdad, says that "the central bank sells about $ 200 million a day in currency, which is much greater than the Iraqi market’s consumption or its need."
Al-Shara says, "The Turks and Iranians talk about large exports to Iraq, but the ministries of agriculture, government agencies, and even private sector traders do not know the fate of these goods, and thus they are statements of misleading and smuggling of dollars."
According to Sharia, "the survival of the price of the Iraqi dinar is subsidized against the dollar, which serves the two countries and does not serve the Iraqi state and its industrial and agricultural production, which makes it more expensive to support the dollar than the importer," thus making Iraq a market for the two countries that suffer from the collapse of their currency.
The currency auction is serving in its current form, as Sharia says,
Although critics of the auction (the window) say that it turned the central bank into a "money exchange company", which is recognized by the central bank in a paper it issued in 2019 regarding the auction, when it compared proposed solutions to develop the auction work and reduce its damages.
The bank admits in the paper that the auction consumes effort and time that the bank was supposed to spend in supporting the Iraqi market and performing its real role, but the paper also said that it is not possible to completely cancel the auction, because this will cause great inflation in the Iraqi market, and also it is not possible to transfer it to a custody The Ministry of Finance or the Iraqi stock market due to "lack of experience and the restrictions of the US Federal Bank," according to the paper.
The economic expert, Salam Sumaisem, says that "the rule of exchange liberalization requires the existence of a window for selling the currency," adding that any blocking of currencies will make the dollar price higher and this is not desirable.
But Sumaisem criticizes the "lack of jurisdiction" among those in charge of Iraqi monetary affairs, and says that it is possible to develop the auction work in a way that reduces the rate of leakage in hard currency outside the country.
The Iraqi economic expert, Manar Al-Obeidi, says that it is not possible in any way to cancel the currency auction because 92 percent of the Iraqi state’s imports are in US dollars and the Iraqi state must sell dollars to the central bank, and the central bank must secure the Iraqi dinar necessary to give it to the Iraqi government Against the sale of dollar imports. Suspect
Al-Obaidi added that the solution to reducing the impact of the auction is through maximizing the state’s revenues from the Iraqi dinar and providing local substitutes for the necessary imports.
Al-Obaidi takes on the current financial system not to link the central bank transfers to the customs authority to find out if the funds transferred abroad through auction enter Iraq in the form of goods.
Businessmen, such as Salem al-Douri, criticize the bank’s auction, which he says allows Iraqi money to be taken out of hard currency in order to buy non-essential items.
Al-Douri calls for floating the dinar and adopting the "difficult solution" in order to save the Iraqi economy.
According to al-Douri, "The Iraqi pays a dollar for five kilos of Iranian tomatoes, and the central bank pays about a quarter of an additional dollar to reduce the price for the Iraqi citizen, and all this money goes out of thousands of different goods outside Iraq."
According to Al-Douri, "In the tomato example, the central bank can support the Iraqi farmer with this quarter of a dollar, and thus the foreign currency will remain inside Iraq, and the agricultural sector will develop, and this example can be generalized to other sectors as well."
The idea of floating the dinar means canceling the support provided by the Central Bank to the Iraqi currency and making it face foreign currencies without interference.
This decision will significantly reduce the value of the Iraqi dinar against the dollar, meaning that a commodity whose price is a thousand dinars may become two thousand or more, according to the league that says, "Perhaps the central bank should support the sectors of agriculture and industry first before removing the subsidies completely, but the support It should be raised sooner or later. ”
The financial advisor to the Prime Minister, Mazhar Muhammad Salih says,“ The stability of the Iraqi dinar exchange represents the stability of the external value of the national currency, and hence the stability of the standard of living, and defending the stability of the exchange rate is one of the most important duties of the Central Bank of Iraq in achieving its objectives. In building stability as a climate for economic growth. "
He indicated that "despite the current account deficit of the balance of payments to GDP, which is about negative 8% according to preliminary estimates; however, the Central Bank defends the exchange rate through its foreign reserves, and that this defense is dependent on the sufficiency of foreign reserves that have not Its red lines reach until now. "
Late last year, the Iraqi Integrity Commission revealed details of criminal cases related to the "currency auction" file that it is investigating, and talked about three different "tricks" used by government banks, including using people's accounts without their knowledge and depositing checks for others who do not have a balance.
According to the Integrity Commission, the cases included private and governmental banks, some of which claimed to have imported goods inside Iraq, but "no material has entered Iraq since 2004," according to the commission's statement. LINK
The “Currency Auction” Is A Window For Smuggling Billions Of Dollars Annually To Iran And Its Militias, And Nothing Benefits The Iraqi Economy
The Baghdad Post Wednesday, December 02, 2020 01:13 AM
The Central Bank of Iraq sells about 200 million dollars a day to the local market, 44 billion dollars exited Iraq through the currency auction in 2019, of which 30 billion dollars no one knows their destination and no goods were brought with it. The corruption of the currency auction in Iraq is still one of the economic farces over the years. It was invented by the corrupt Shiite government to make corruption whales and preserve permanent resources for Iranian gangsters and militias in Iraq.
In the year 2019, the Central Bank of Iraq sold $ 44 billion in hard currency at the Central Bank auction, mostly intended to cover the import of materials and goods the country needs, stabilize the price of the Iraqi dinar and prevent inflation, according to data from the bank.
However, according to Iraqi economists, the volume of Iraqi imports reached 18 billion dollars, of which "6 billion dollars" were bought by the Iraqis of goods from Iran, according to the economist Manar al-Obeidi. Iraqi experts warn of "currency leakage" outside Iraq due to "corruption" in the currency auction in the country.
According to a report by Al-Hurra, Manar Al-Obaidi said, "There is actually a difference of about $ 30 billion between the volume of transfers abroad and the value of incoming goods, which indicates that the currency auction is not doing its proper duty to provide funds for the purpose of import."
The Parliamentary Finance Committee had called on the words of a number of its members to "reconsider the issue of the currency auction." Committee member Ahmed Al-Saffar said in a statement to the official Iraqi agency that "the issue of the currency window of the central bank does not exist in all countries of the world except for Iraq."
A member of the Finance Committee, Muhammad Sahib Al-Darraji, announced in a statement, on Monday, that he "submitted an official complaint to the Iraqi judiciary to stop the waste of hard currency and its smuggling abroad" through the currency auction.
A journalist interested in Iraqi economic affairs, Bassem Al-Shara, said that the currency auction has become a major obstacle to the liberalization of the Iraqi economy and is merely a front for financing currency smuggling operations, especially this year after revenues from crude oil have declined significantly.
Al-Shara added that the auction sells large numbers of dollars a day that exceeds the needs of the Iraqi economy and does not return from them as goods except at rates that do not exceed 40 or 50 percent in the best case, and the rest goes to neighboring countries, especially Turkey and Iran.
The bank sells the US dollar at 1182 dinars for every dollar, but the exchange rate in the Iraqi market is about 1250 dinars per dollar, and exchange companies benefit from the currency difference.
But Salem al-Douri, a businessman from Baghdad, says that "the central bank sells about $ 200 million a day in currency, which is much greater than the Iraqi market’s consumption or its need."
Al-Shara says, "The Turks and Iranians talk about large exports to Iraq, but the ministries of agriculture, government agencies, and even private sector traders do not know the fate of these goods, and thus they are statements of misleading and smuggling of dollars." According to Shara, the "survival of the Iraqi dinar against the dollar , supported by serving the two countries does not serve the Iraqi state industrial and agricultural production , which makes it more expensive dollar support from the importer," which "make Iraq a market for the two countries that suffer from the collapse of Ammelthma."
And the currency auction serves its current form, according to Sharia, "many banks belonging to influential parties and gives them important profits with which they can face the interruption of financing, especially since the selling differences are large between the bank and the banks."
Although critics of the auction (the window) say that it turned the central bank into a "money exchange company", which is recognized by the central bank in a paper it issued in 2019 regarding the auction, when it compared proposed solutions to develop the auction work and reduce its damages.
The bank admits in the paper that the auction consumes effort and time that the bank was supposed to spend in supporting the Iraqi market and performing its real role, but the paper also said that it is not possible to completely cancel the auction, because this will cause great inflation in the Iraqi market, and also it is not possible to transfer it to a custody The Ministry of Finance or the Iraqi stock market due to “lack of experience and US Federal Reserve restrictions” according to the paper. The economist, Salam Sumaisem, says that “the exchange liberalization rule requires the existence of a window for selling the currency,” adding that any blocking of currencies will make the dollar price higher and this is not desirable in it.
But Sumaisem criticizes the "lack of jurisdiction" among those in charge of Iraqi monetary affairs, and says that it is possible to develop the auction work in a way that reduces the rate of leakage in hard currency outside the country.
The economic expert, Manar Al-Obaidi, confirmed, according to Al-Hurra, that it is not possible in any way to cancel the currency auction because 92 percent of the Iraqi state's imports are in US dollars and the Iraqi state must sell dollars to the central bank, and the central bank must secure the necessary Iraqi dinar to give to the government Iraqi against the sale of dollar imports. Al-Obaidi added that the solution to reducing the impact of the auction is through maximizing the state’s revenues from the Iraqi dinar and providing local substitutes for the necessary imports.
Al-Obaidi takes on the current financial system not to link the central bank transfers to the customs authority to find out if the funds transferred abroad through auction enter Iraq.In the form of merchandise.
Businessmen, such as Salem al-Douri, criticize the bank’s auction, which he says allows Iraqi money to be taken out of hard currency in order to buy non-essential items.
Al-Douri calls for floating the dinar and adopting the "difficult solution" in order to save the Iraqi economy.
Late last year, the Integrity Commission revealed details of criminal cases related to the "currency auction" file that it is investigating, and talked about three different "tricks" used by government banks, including using people's accounts without their knowledge and depositing checks for others who do not have a balance. According to the Integrity Commission, the cases included private and governmental banks, some of which claimed to have imported goods inside Iraq, but "no material has entered Iraq since 2004," according to the commission's statement.
According to "Independent Arabia", the basic idea of the currency auction revolves around "selling dollars to private banks and money transfer companies to manage the import of goods process." Its daily sales of dollars reach the limits of $ 180 million, but several suspicions affect influential political figures standing behind those banks to manage operations corruption.
And the Treasury Department has included Iraqi banks - dealing with the auction - in the sanctions list on more than one occasion.
Economists describe the currency auction as "a drain on the dollar and an opportunity for some banks owned by influential parties to make big profits."
And a professor of political economy at the Iraqi University, Abdul Rahman al-Mashhadani, says, Iraq has become a gateway to relieve pressure on Iran.
Reveals "
He points out that “Iraq's commercial dealings with Iran are not done through the banking system due to the sanctions imposed on it, and most transactions are done through direct payment,” indicating that “several evidence for this, including very inflated numbers regarding the import of roses, tomatoes and watermelons at inflated prices. Exceeds the need for Iraq. "
On the money laundering operations that mar the currency auction sales in the Central Bank, Al-Mashhadani estimates that the money laundering proceeds from the daily sales of the Central Bank are about "15 percent," indicating that "the talk about currency auction being a gateway to corruption and money laundering has been taking place since 2010." . He adds, "influential political parties standing behind the banks that own shares of the auction have also become outlets for merchants' transfers, and a percentage of them are tainted by money laundering operations."
In summary, the currency auction is a gateway to smuggling billions of dollars annually to Iran and its militias, and Iraq does not benefit from anything. The economic and financial deterioration is clearly visible and economic plans must be developed to eliminate this chaos completely. LINK
Experts: The Foreign Currency Auction Is A Front For Financing Its Smuggling Operations Abroad
The Baghdad Post Wednesday, December 02, 2020 03:33 PM Experts confirmed that the foreign currency auction has become a major obstacle to the liberation of the Iraqi economy and its overcoming the current crisis.
Experts said that the foreign currency auction is just a front for financing currency smuggling operations, after revenues from crude oil have fallen dramatically this year.
The experts added that in the auction, large numbers of dollars are being sold every day that exceeds the need of the Iraqi economy, and it does not return as goods except at rates that do not exceed fifty percent at best, and the rest goes to neighboring countries, especially Iran.
The Central Bank sells the US dollar at 1182 dinars for every dollar, but the exchange rate in the Iraqi market is about 1250 dinars per dollar, and exchange companies benefit from the currency difference. LINK
Parliamentary Finance Submits A Request To Question The Governor Of The Central Bank
The Baghdad Post Wednesday, December 02, 2020 10:31 AM The Parliamentary Finance Committee revealed that a formal request has been submitted to the Presidency of the House of Representatives to question the Governor of the Central Bank.
Committee member Thamer Theban said that "the coming days will witness an interrogation within the House of Representatives of the Governor of the Central Bank," pointing out that "the Finance Committee has submitted a formal request for the Presidency of Parliament to question the governor."
He added that "the governor of the central bank committed a big mistake regarding banks and the currency auction, and he will be questioned on this basis."
The Parliamentary Finance Committee revealed earlier, that it began collecting signatures for the dismissal of the Governor of the Central Bank of Iraq, because the Council was not satisfied with the answers provided during the hosting. LINK
In The Document .. Seizure Of The Movable And Immovable Funds Of The Manager Of The (Key Card) Company, His Family And Close To Him
Wednesday 02, December 2020 11:38 | Economical Views: 287 Baghdad / NINA / A document issued by the Central Bank of Iraq, with the seizure of movable and immovable funds, showed the director of the "Key Card" company and his family members and close associates of him.
A source in the Central Bank confirmed to the Iraqi National News Agency / NINA / the document issued by the Legal Department in the Central Bank / Attestations and Reservations Department, dated (11-30-2020), which included directives issued to all banks, to seize movable and immovable funds, to a company director. Key Card (Bahaa Abdel-Hussein Abdel-Hadi, his wife and children), members of his family, and close to him
The document, which was signed by the Director General of the Central Bank, and Wiam Abdulaziz Hassan, also included the seizure of movable and immovable funds for each of (the International Smart Card Company for Key Card - the Iraqi Electronic Payment System Company - the Information Technology Achievement Company).
The directive issued by the Central Bank came in accordance with the document, based on the letter of the Prime Minister's Office / Diwani Order Committee (29), No. 443 on 11/24/2020, accompanied by the judicial decision, dated 10/15/2020, issued by the Judicial Investigation Authority. According to the Judicial Order (126 on 6/9/2020), and the minutes of the Subcommittee on the Diwaniyah Order No. (29) ./ End 8 https://ninanews.com/Website/News/Details?key=873848
In The Document ... The Central Bank Seizes The Money Of Three Companies, Including The "Key Card" Company
Author: AhadNA3 On 2/12/2020 - 10:26 AM 120 Ahed News – Baghdad Al-Ahed News publishes the document, that the Central Bank has seized movable and immovable funds of the "Key Card" company and its director, Baha Abdul-Hussein Abdul-Hadi, and his family members.
The document also refers to the seizure of movable and immovable money for the Injaz Information Technology Company and its director, Ammar Abdul-Jabbar Fattah Al-Jaff, his sons and wives, and the Iraqi electronic payment system company, as well as the seizure of the transferred funds for Samer Abdul-Muttalib Al-Skouti, his children and wives.
https://alahadnews.net/139919/%d8%a7%d9%84%d8%b9%d8%b1%d8%a7%d9%82/%d9%85%d8%ad%d9%84%d9%8a%d8%a7%d8%aa/
The Home Is Safer .. Iraqis Are Losing Confidence In Their Country's Banks
Reports| 02:53 - 02/12/2020 Baghdad - Mawazine News
Businessmen in Iraq suffer from weak banking systems, which leads them to resort to banks in neighboring countries in their international commercial dealings, while many citizens do not trust them and save their money in their homes.
"The Iraqi banking systems are now far from international standards," said economist and head of the Lawyers Union in Diwaniyah, Abbas Anid Ghanem.
According to Ghanem, the problems go back decades, and specifically to the 1990s, when the sanctions imposed on Saddam Hussein's regime caused the isolation of Iraq from the world. After the US-led coalition entered the country in 2003, widespread looting emptied banks of liquidity.
More than 70 banks have been established since then, but the sector as a whole has not developed.
The World Bank reported in 2018 that the three largest banks, namely Al-Rafidain, Al-Rasheed and Al-Iraqiya for state-owned trade, hold about 90 percent of the sector's assets.
No facilities.
The three public banks mainly pay the salaries of eight million Iraqi employees. But the state had to borrow from it due to the collapse in oil prices this year, which raised its domestic debt.
As for the director of the Al-Akhyyar Contracting Group, Adel Al-Salhi, the problem with public banks is that they are satisfied with "loans (to the state) and pay employees' salaries and are not interested in dealing with the trade sector and supporting businessmen."
This applies especially to the Rafidain and Rashid banks, and to a lesser extent to the Iraqi Trade Bank, which was established by the US Coalition Provisional Authority under the supervision of the civilian governor Paul Bremer in 2003. But Ghanem explains that “sectarian and partisan quotas in the political system and administrative and financial corruption are matters that have affected this banking institution.” Its role was almost limited to lending to the government.
Although the Iraqi Trade Bank is the only one that enables merchants to open credits, it “does not provide any banking facilities to us (businessmen), and asks us for guarantees with a very high value of up to 110 percent to provide a letter of guarantee only,” according to Al-Salhi.
This prompted the group of good guys for contracting to resort to banking services outside the country, like many companies that have come to rely on banks in Jordan, Turkey, Lebanon or even Iran to facilitate their dealings.
The issue is not only related to financial facilities, but also, according to Al-Salhi, to "transparency" in transactions and the provision of "special employees from within the banks (...) according to the evaluation and work of the merchant," unlike Iraqi banks that "deal with us as employees in a dry manner."
According to the World Bank, less than 5 percent of small and medium-sized enterprises obtained loans from local Iraqi banks, while most merchants and investors resorted to borrowing from family and friends.
Ghanem attributed this to the high value of interest that banks take, especially in investment projects, as it "ranges between seven to ten percent, while most of the world's advanced banks do not reach more than one percent."
Iraq was ranked 172 out of 190 countries classified in the "Ease of Doing Business Index" report.
Money is at home
The problems of the Iraqi banking sector do not stop at companies, as its services are not popular with citizens either.
World Bank figures indicate that only 23 percent of Iraqi families have an account with a financial institution, which is among the lowest in the Arab world. Those account holders are especially state employees whose salaries are distributed to public banks at the end of each month.
But salaries do not remain long in the accounts, as soon queues form in front of banks of employees who withdraw their salaries in cash and prefer to keep them in their homes, because of the weak confidence of Iraqis in banks.
Memories of bank looting and robbing during the 2003 invasion are still fresh in their minds, and many lost their savings.
Nabil Kazem was one of the victims. He told France-Presse that after the bank robbed, "I found it very difficult to get my money back. It only happened after years that I lost confidence in the banks." In addition, Kadhim attributes his reluctance to keep his money in the bank to the lack of electronic and card-based payment mechanisms in "buying and selling transactions, especially in large amounts transactions."
Kazem prefers to resort to the services of exchange offices or private banks to obtain remittances from abroad because they are "better and faster than government banks, but even more secure than them." The economic expert, Abbas Inid Ghanem, explains that "Iraqi banks do not allow deposits in dollars for savings purposes, and this causes a great loss of hard currency."
This also reveals the lack of confidence in the local currency, as many citizens "convert their savings and money into dollars and hoard them in homes."
Ghanem notes that there is a paradox between official discourse and reality. “The state calls on citizens to deposit their savings in banks,” while “it does not amend the laws of these banks and does not provide them with any basic services.” Ended 29 / A 43 https://www.mawazin.net/Details.aspx?jimare=132648
Oil Prices Are Losing More
Time: 12/02/2020 10:33:04 Read: 1,573 times {International: Al Furat News} Oil prices continued their losses on Wednesday, affected by an increase in oil inventories in the United States and at a time when OPEC and its allies left the markets in a state of uncertainty by postponing an official meeting to decide on increasing production in January.
Brent crude futures were down 37 cents, or 0.78%, at $ 47.05 a barrel by 05:23 GMT, while West Texas Intermediate crude was down 39 cents, or 0.88%, at $ 44.16 a barrel.
Industry data from the American Petroleum Institute showed that US crude inventories rose by 4.1 million barrels last week.
The figures came after the Organization of the Petroleum Exporting Countries (OPEC), Russia and other allies, in a group known as OPEC +, postponed talks on oil production policy next year until Thursday.
Earlier this year, the group imposed production cuts of 7.7 million barrels per day, as the Coronavirus pandemic reduced fuel demand. These cuts were widely expected to be extended from January to March 2021 amid spikes in COVID cases. -19.
However, the oil price losses culminated in investor hopes for a vaccine to combat the growing cases of COVID-19 which could in turn revive fuel demand. LINK
The exchange rate of the dollar and foreign currencies in the local markets
Time: 12/02/2020 09:35:04 Read: 4,524 times {Baghdad: Al Furat News} The exchange rates of the dollar and foreign currencies in the Iraqi market, according to the Iraqi Political Economic Center, today, Wednesday
The sale price of the dollar is 126,000 The purchase price of the dollar is 125,000
Euro: 100 euros, 120.70 dollars
GBP: 100 pounds $ 134.13
Turkish Lira: 100 $ 782.90 Turkish Lira
The price of an ounce of gold worldwide is $ 1810.80
The price of a barrel of Brent crude oil is $ 47.12 The price of a barrel of US crude oil is $ 44.21 LINK
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