"Tidbits From TNT" Saturday 7-22-2023

Jul 22

TNT:

CandyKisses: ICT Minister: We are Working to Complete the Procedures for Iraq's Accession to the Digital Cooperation Organization

Economy News _ Baghdad

Minister of Communications Hiam Al-Yasiri confirmed on Friday work to complete the procedures for Iraq's accession to the Digital Cooperation Organization.

According to a statement by the Ministry of Communications received by Al-Eqtesad News, "Al-Yasiri met via video conference with the Secretary-General of the Digital Cooperation Organization, Dima Al-Yahya, and discussed with her the completion of the procedures related to Iraq's accession to the Digital Cooperation Organization and the services that the organization can provide to Iraq in the field of digitization."

Al-Yasiri stressed that "Iraq seeks to be an active member of the organization, which is one of the specialized organizations concerned with advancing the reality of communications and informatics and transferring advanced expertise to the countries organizing it, which contributes to strengthening digital cooperation between these countries."

For her part, the Secretary-General of the Digital Cooperation Organization expressed her "great welcome to Iraq's desire to join the organization," stressing that "the organization will support Iraq in its efforts for digital transformation, e-governance, investments in the digital field, and benefiting from international expertise and experiences in this field

Tishwash: With the exacerbation of the dollar crisis.. Parliament hosts the central governor

The House of Representatives intends to host the Governor of the Central Bank, Ali Al-Alaq, and the Minister of Finance, Taif Sami, during the current week, to find out the reasons for the lack of control over the parallel exchange rate.

The parallel price means the exchange rate of the dollar in the market and exchange offices, and not the official rate set at 1132 dinars per dollar, according to the decision of the Board of Directors of the Central Bank of Iraq, which was approved by the Council of Ministers.

The exchange rates of the US dollar against the Iraqi dinar rose in Baghdad markets, after Washington imposed sanctions on 14 Iraqi banks, to reach 152 thousand dinars per hundred dollars yesterday, Friday.

Member of the Finance Committee, Representative Mueen Al-Kadhimi, said in a press statement: "The government tried to control the exchange rate, by reducing the dollar from 145 to 130, and was able to provide remittances to countries to which remittances can be sent."

Al-Kadhimi added, "However, there are other countries from which Iraqi merchants import, and US sanctions prevent sending these remittances, forcing these merchants to obtain dollars from the parallel market."

He explains, "Which leads to the dollar's price remaining high in this market, and the recent measures of the US Federal Reserve not to deal with a number of private banks had an impact on the rise in the dollar's price."

Regarding the procedures of the Finance Committee in this regard, Al-Kazemi confirms, "There will be a hosting of the Governor of the Central Bank and the Minister of Finance this week, to find out the real reasons for the inability to control the parallel price."

For his part, the specialist in economic affairs, Dr. Ahmed Al-Rawi, told Al-Sabah that “the approval of the current budget with large allocations for spending will lead to an increase in demand for the dollar, and despite the central bank’s measures to mitigate the official price difference from the parallel, all these measures only affect a few percentages in this difference. ink

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Tishwash: US sanctions confuse Iraq's finances, suggesting a "scarcity" of the dollar and a new crisis

The decision of the US Treasury Department to impose new sanctions on 14 Iraqi banks, months after imposing similar sanctions on 4 important banks due to financial dealings with Iran and others related to money laundering operations, caused a rapid reaction inside Iraq, as it led to a decline in the value of the dinar against the dollar, along with the influx of depositors to the punished banks to withdraw their money deposited in dollars.

And the Iraqi dinar on the Baghdad and Erbil stock exchanges recorded a sharp decline by 1520 dinars per dollar, after it was between 1450 and 1460 dinars on Wednesday. The Wall Street Journal, on Wednesday, quoted US officials as saying that the United States had prevented 14 Iraqi banks from conducting transactions in dollars.

The newspaper's report stated that the ban, imposed by the Treasury Department and the Federal Reserve Bank, is part of "a comprehensive campaign against the transfer of US currency to Iran."

The newspaper added that the United States revealed information that Iraqi banks were involved in money laundering and fraudulent transactions, some of which may have involved sanctioned individuals, and raised concerns that Iran might benefit from these transactions.

Local penalties

An official source in the Central Bank of Iraq said, “The bank’s management has officially received the imposition of US sanctions on a number of banks, which included each of the Islamic Advisor Bank for Investment and Finance, Al-Qartas Islamic Bank for Investment and Finance, Taif Iraq Company, Elaf Bank, Erbil Bank for Investment and Finance, International Islamic Bank, Trans-Iraq Bank, Mosul Bank for Development and Investment, Al-Rajih Bank, Sumer Commercial Bank, Trust International Islamic Bank, Ur Islamic Bank, Islamic World Bank for Investment and Finance, Zain Iraq Islamic Bank for Investment and Finance.

And the source continued: "The central bank administration worked to stop all transactions in dollars with those banks and prevent them from entering the currency auction on Thursday."

And the source, who asked not to be named, indicated that the penalties are local, pointing out that the latter "will not stop all of these banks' work, but will only prevent them from dealing in dollars, while other banking operations will not be affected by the imposed penalties, especially since those banks have bank accounts for citizens worth billions of dinars, and those banks also have many employees' salaries that are localized in them, so these businesses will continue normally."

He added, "Imposing US sanctions on 14 Iraqi banks will have a significant impact on the Iraqi economic and financial situation, and these sanctions will have repercussions on raising the exchange rate of the dollar in the local market. Preventing these banks from dealing in dollars will cause a new scarcity in the US currency, and there will be a new resort to buying the dollar and withdrawing it from the market, which raises its value."

The official source in the Central Bank of Iraq concluded, "According to information received from the US Treasury, there is another group of Iraqi banks that may be subject to sanctions during the coming period, due to monitoring their illegal activities in sending currency to Iran, especially since money transfers in dollars are all closely monitored by the US Treasury and the US Federal Bank."

Gradual rise

For his part, a member of the Finance Committee in the Iraqi parliament, Mustafa Al-Karawi, said, "Great economic repercussions will be witnessed by the Iraqi financial market, due to the imposition of sanctions by the United States on a number of banks, including the rise in the exchange rate of the dollar, which witnessed a rapid rise a few hours after the imposition of those sanctions."

Al-Karawi warned that "the rise in the exchange rate of the dollar will not stop and there will be a gradual rise every day, and this matter requires a real government stance and measures to address this matter, which could turn into a cash crisis like the one that occurred during the past months with the beginning of the formation of the new government, and this matter requires Iraqi diplomatic movement towards the US Treasury and the US Federal Reserve."

He added, "The Finance Committee in the Iraqi parliament will work to host the responsible figures and authorities in the Central Bank, to discuss the repercussions of imposing sanctions on a number of private Iraqi banks, and to find out what the bank's procedures are to address the significant increase in the exchange rate in the local market."

On the other hand, Mustafa Akram Hantoush, an expert in financial and economic affairs, told Al-Araby Al-Jadeed that “the imposition of US sanctions will restore the crisis of a significant increase in the exchange rate of the dollar in the local market. It will also have an impact on the reputation of the Iraqi banking sector in front of the international community. These sanctions confirm the involvement of these banks in acts that violate international laws.”

And Hantoush indicated that "the imposition of US sanctions on some banks confirms the lack of Iraqi control by the Central Bank on the work of the sector, in contrast to the US control over the work of banks, which indicates the difficulty of removing any dollar from Iraq towards the US-sanctioned countries, led by Iran."

Not the last

Hanoush stressed that "US sanctions against Iraqi banks are not the first, and most likely will not be the last, and this matter requires an Iraqi government position to stop the sanctions on the remaining local banks, and monitor the work of banks regarding preventing dealing in dollars with Iran, Syria, Lebanon and Russia."

In turn, an official at Elaf Bank, one of the banks included in the US sanctions list, said that the bank had received a notice banning its dealings in dollars, stressing in a phone call that "the banks will continue to operate in the local currency," refusing to comment on the US decision regarding the involvement of the sanctioned banks in "suspicious" financial transactions.

And the Iraqi financial expert, Ahmed Al-Janabi, considered that the private banks had failed to implement the Central Bank's instructions, and had become a burden on the Iraqi economy. Pointing out that there are several reasons for the failure of these banks, most notably their reliance on quick profits in the currency auction, without significant financial risks, their inability to attract and develop deposits, and the failure to achieve investment goals due to the failure of private banks to attract real capital and employ them in the economic fields.

Despite the Iraqi government's approval of a package of financial measures, the most prominent of which was fixing the exchange rate of the Iraqi dinar at 1,320 dinars against one dollar, despite the fact that several months have passed since this decision, the difference is still large between the official exchange rate approved by the Central Bank of Iraq and the parallel market. link

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