Some "International News" posted by Samson at KTFA Thursday 6-30-2022
KTFA:
Samson: The Russian Central Bank Introduces A New Banknote
30th June, 2022
The Russian Central Bank offered, on Thursday, a new 100-ruble banknote, and the regulator announced that the new banknote would be put into circulation starting today (June 30, 2022).
The front side of the new banknote contains the Spasskaya Tower, the main tower of the eastern wall of the Kremlin, also known as the clock tower, while the reverse contains the Rzhevsky monument to the Soviet soldier.
The new banknotes are treated with special materials for added protection, and contain a QR code that takes the user to the central bank's website. LINK
Samson: Disruption of official working hours in Kurdistan for a week
30th June, 2022
Today, Thursday, the Kurdistan Regional Government announced the suspension of official working hours for a whole week.
And the regional government stated in a statement received (Baghdad today) that it had "instructed to suspend official working hours for a week on the occasion of the blessed Eid al-Adha."
And she indicated that "the holiday starts from Saturday, July 9, until Sunday, July 17." LINK
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Samson: The Governor of the Central Bank of Iraq participates in the (Access to Finance) conference
29th June, 2022
The Governor of the Central Bank of Iraq, Mr. Mustafa Ghaleb Mokhief, confirmed that the Central Bank continues to perform its roles prescribed by law in monitoring the financial and banking sector.
His Excellency said Wednesday, that the Central Bank is pushing the financial and banking sector to greater horizons. His Excellency added in his speech at the "Access to Finance" conference, which was held at the Al-Rasheed Hotel, with the participation of the public and private sectors:
The Central Bank of Iraq has initiated a package of measures to save the economy and economic institutions from a certain abyss, after a state of despair and panic prevailed among the dealers in the economy. And those dealing with state institutions, after the reluctance that occurred in the performance of their obligations with them.
He added: The Central Bank made access to finance possible when it launched a number of qualitative and courageous initiatives that enabled our society to feel safe through our initiatives that covered different and important sectors. His Excellency pointed out that the Central Bank of Iraq is not kind to these measures and initiatives, and finds itself only in the position it should be in.
Governor clarified that the goal of enhancing financial inclusion and securing access to financial and banking services to the community was one of our priorities that we are working on with short, medium and long-term plans, and that access to finance is no longer a dream intertwined with red tape, corrupt and closed-minded hands, but rather has become a national path in the work of the banking sector and institutions Microfinance, and its defense has become a priority for the Central Bank and the banking sector alike.
Central Bank of Iraq
Media Office
29 - June - 2022 LINK
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Samson: Al-Fateh: The Countdown To Forming A Government Begins After Eid
30th June, 2022
A member of the Al-Fateh Alliance, Ghazanfar al-Batekh, confirmed, on Thursday, that the coordination framework negotiations with the rest of the political blocs are continuing, and the formation of the government will take place after the blessed Eid al-Adha.
Al-Batekh said in a statement to "Al-Maalouma", that "the atmosphere is positive and there are no differences for the coordination framework with the rest of the political blocs," noting that "the initial agreement emphasizes the speedy formation of The government is in one basket, represented by the President of the Republic, the Prime Minister, the cabinet, and then the government curriculum.
He added, "Resolving the position of the president of the republic among the Kurdish parties is the key to the next government, which needs a quorum of 220 deputies to pass the candidate," stressing that "the next government will be a government of services in all respects, especially the economic one."
The coordinating framework forces became the most numerous parliamentary bloc in the House of Representatives, after obtaining about 40 new seats, taking advantage of the resignation of members of the Sadrist bloc, which gives it the upper hand in the file of government formation and the distribution of positions. LINK
Samson: The “Great China Fund” .. Beijing is establishing a bank to promote its currency, so will the “international monetary” compete or overthrow the throne of the dollar?
29th June, 2022
China's announcement of the establishment of an international monetary fund with a number of Asian countries, in what can be called the Great China Fund, or the Chinese Monetary Fund, raises questions about the purpose of this step, and whether it establishes an end to the dominance of the dollar on world markets, or does it represent a competitor to the International Monetary Fund, which is dominated by Western countries led by America.
China's plan to establish a system to accumulate reserves in yuan (renminbi) initially includes the Chinese central bank, known as the People's Bank of China (PBOC), the Bank of Indonesia, the Central Bank of Malaysia, the Monetary Authority of Hong Kong, the Monetary Authority of Singapore, and the Central Bank of Chile.
The Chinese Monetary Fund could pave the way for the Chinese currency to play a key role in the Asia-Pacific region, and it is believed that in the longer term, this Chinese Monetary Fund could be a competitor or alternative to the International Monetary Fund, which is dominated by the dollar, according to the American Business Insider website.
The plan comes amid growing concern in Beijing about the dominance of the US dollar, with global investors searching for safe havens, while the US set out to try to tame high inflation by raising interest rates.
How do member states benefit from the fund?
Each country will contribute 15 billion yuan, or about $2.2 billion, to the RMBLA liquidity system. “When liquidity is needed, participating central banks will not only be able to withdraw their contributions, but will also be able to obtain additional financing through a secured liquidity window” to counter market volatility, the Chinese central bank said.
These funds will be stored in the Bank for International Settlements, (BIS) is an international financial institution owned by central banks, which "promotes international monetary and financial cooperation, and acts as the bank of the central banks", particularly with regard to the passing and settlement of banking transactions, and is headquartered in Basel, Switzerland, and has offices Representative in Hong Kong and Mexico City.
How will the Chinese Monetary Fund compete with its international counterpart?
With the announcement of the new fund's ability to lend to its founders more than their contributions to it, it will make it similar or a competitor to the International Monetary Fund, which is dominated by the United States, and the major Western countries.
China's monetary fund could attract more members to join in the future, said Ding Shuang, chief China economist at Standard Chartered Bank. CMF participants will also have access to additional financing through a secured liquidity window, which allows participating central banks to borrow additional using their existing holdings as collateral.
The People's Bank of China said the arrangement would help meet reasonable international demand for the yuan and contribute to regional financial security.
This is how Beijing is trying to gradually reduce the dominance of the dollar
The announcement highlighted China's central bank's efforts to build infrastructure, which will help loosen the dollar's dominance of global trade.
China's plan to establish a yuan liquidity reserve pool with the Bank for International Settlements (BIS), could help boost the international use of the Chinese currency.
The Chinese authorities have taken a flexible approach, seeking to expand the yuan's dealings internationally, through their fourteenth five-year plan for the period from 2021-2025, describing the process of the international use of the yuan as a matter that depends on the choice of the market and gradually.
China has for years sought to increase the global use of the yuan, signing bilateral currency swap deals worth more than 3 trillion yuan with more than 40 countries, including 400 billion yuan each for Hong Kong and South Korea, and 350 billion yuan each with the Bank of England and the Central Bank. The European Union, 300 billion yuan with Singapore, and 150 billion yuan with Russia.
What are the reasons for the establishment of the Chinese Monetary Fund?
While tension over Hong Kong's national security law has sparked heated debates about a possible financial separation between China and the United States in 2020, the recent Western sanctions on Moscow after its invasion of Ukraine have served as a special wake-up call for Beijing, especially the decision to exclude major Russian banks from the SWIFT messaging banking system. and freezing the assets of the Russian Central Bank with Western countries and their Asian allies.
It is noteworthy that Russian President Vladimir Putin told the BRICS Business Forum last week that Russia and China are working on developing a new reserve currency with other BRICS countries (this grouping includes countries with the fastest economic growth in the world, most of which are large non-Western economies).
Meanwhile, government data indicated that China's foreign exchange reserves - the largest in the world - rose last May, for the first time in 2022, by $80.6 billion to reach $3.13 trillion.
Everyone is afraid of America exploiting the dollar for its own benefit
In addition to political factors, and the fear of being subjected to a blockade similar to the Western blockade against Russia, China and many countries of the world are concerned about the dollar's situation, which in recent weeks has reached its highest level in 20 years.
The sharp rise in the value of the dollar as the US Federal Reserve continues to raise interest rates in an unprecedented and aggressive manner, for nearly 30 years, is posing challenges to currencies and central banks around the world.
The whole world, even America's allies, feel that Washington is exploiting the dollar's status as a major reserve and trading currency, in a way that only serves its economic goals, as the US Federal Reserve accelerated the tightening of monetary regulations, and launched the process of shrinking the balance sheet in June, which led to fears of launching a recession wave. hypertrophied all over the world. Against this backdrop, China is touting that the launch of the renminbi liquidity arrangement is of great importance to defuse potential risks, a China Daily report said.
Yuan expands despite Washington's nose
Recently, the Chinese renminbi has been used more often in trade settlements, international investment and finance, and foreign exchange transactions, and more central banks have included it in their foreign exchange reserve pools. Market players have shown an increasing willingness to use it, China Daily reported.
The yuan's share in global payments, forex transactions, and reserve assets is still far from competing with the US dollar. The yuan accounted for 2.14% of global payments, in April 2022, well below the 41.81% led by the US dollar.
In terms of its share of global foreign exchange reserves, the yuan ranked fifth at the end of last year, with a share of 2.79%, compared to 58.5% for the US dollar and 20.6% for the euro. But many analysts believe that the Russian-Ukrainian war and market turmoil in the wake of massive interest rate increases by the US Federal Reserve may give it an opportunity for the yuan to strengthen its position.
Sanctions have damaged the global financial system and will accelerate the de-dollarization move,” China's investment bank Citic Securities said, while a Washington Post report said Beijing's plan to internationalize the yuan could also get a boost through the Belt and Road Initiative, particularly within Asia.
The start of the yuan competition against the dollar will be from Asia
"The yuan will initially play the role of the base currency in Asia.” That appears to be China's initial plan, understood by an article by Deng Zhijie, head of the Research Center of China's State Administration of Foreign Exchange (SAFE), in the June issue of Modern Bankers.
But the Chinese official said internationalizing the yuan would be a complex and long-term task. "In the future, we should pay more attention to economic ties and strengthen regional monetary and financial cooperation," he said.
The yuan's weight in the IMF's Special Drawing Rights basket will be raised to 12.28% on August 1, 2022, an increase of 1.36 percentage points over the 2016 assessment.
Does China want to find an immediate alternative to the dollar or the IMF?
The current financial and monetary system is led by America, through the dollar, the International Monetary Fund and the World Bank, and it and Western countries control the Swift system of banking exchange and the role of major Western financial stock exchanges, in addition to America's role as the largest consumer in the world. Most likely, China does not want an immediate replacement for this existing system.
As for Beijing, it is the biggest beneficiary of the current financial system, as the dollar being the main trading currency makes it expensive, and enables China to reduce the price of its currency, which increases the competitiveness of its exports to be sold heavily to the West, especially the United States, and the latter compensates for its trade deficit with the flow of cash on its securities from The money of China, Japan, and sometimes the Gulf states, benefiting from being the center of the global financial system.
But China mostly wants to find a gradual alternative to this system for two reasons, the first is that in the long run it cannot continue the export-driven development model at the expense of domestic consumption, because it is based on low wages in the country, which cannot be sustained for reasons of potential popular discontent that may cause it.
Beijing has already begun to turn to advanced industries based on knowledge and technology, not low wages, and the continuation of this model is based on the continued opening of the United States and Western countries to Chinese products, which is not guaranteed.
The second reason is that China fears that it will be subjected to any form of deprivation or Western sanctions, similar to what happened with Russia, although this will be more difficult for the West than the Russian case due to the size of the Chinese economy and the West's dependence on Chinese supply chains. Hence, China wants to create a financial system parallel to the current financial system led by the United States, so that it participates in the two systems. He is starting to mature.
This system will consist of its currency, the yuan, which is becoming increasingly important, as it is the largest exporter in the world, which makes it a desirable currency in international trade. With the establishment of the proposed Chinese Monetary Fund, there will be mechanisms for trading and lending the yuan, similar to the mechanisms that are dominated by the West such as the IMF.
Mostly this means that there will be two parallel global financial systems (just as there will likely be two parallel systems in all other areas of life), one led by America and the other by China. Any country can participate in both systems simultaneously, including Beijing itself.
But the problem is that the Chinese financial system, even if it is parallel or reserve, encourages financial separation between America and China more than before, a separation that will not only harm the global economy, including the economies of the two countries, but will also sever the bonds of the trade relationship between America and China, In a way that may encourage a dangerous escalation of competition between them, given that this close commercial relationship is still the first brake on the confrontation between the two giants. LINK