AL-ALAQ: THE FINANCIAL SITUATION IN IRAQ IS GOING ACCORDING TO PLAN
The Governor of the Central Bank, Ali Al-Alaq, confirmed the stability of the financial situation in Iraq, and revealed new mechanisms to facilitate foreign trade, including a new mechanism for small traders’ transfers. He also pointed to the importance of the upcoming meeting in New York to resolve the problem of sanctioned banks, stressing the existence of a government move to strengthen the banking sector.
He then went on to talk about the Financial situation in Iraq, foreign trade, other international currencies, inflation, an the upcoming meeting in New York, lifting restrictions on banks and the Housing Initiative.
IRAQ RAISES ITS GOLD HOLDINGS TO MORE THAN 148 TONS
The World Gold Council announced today, Thursday, that Iraq has increased its gold holdings to more than 148 tons. The report indicated that Iraq increased its gold holdings to 148.3 tons, after it was 145.7 tons, which represents 10.02% of its total other reserves.
According to the latest report published by the Council in August 2024, which was reviewed by Al-Eqtisad News, Iraq advanced one rank to reach 29th place globally out of 100 countries included in the table, after it was ranked 30th.
The report indicated that Iraq ranks third in the Arab world after Saudi Arabia and Lebanon.
(But the dinar is still at 1/6 of a penny…what?)
RV Updates
August news from Iraq is explosive. We now see many changes to the banking system and currency auctions. This as I am told is from the pressure of the Feds and the US Treasury. The situation with Ali al-Alaq is complicated and I want everyone to know the TRUTH of what is really going on over in Iraq and the CBI.
Her information combined with news from the articles can give us the BEST picture of the situation in Iraq. My contact is not just some idiot off the street or some contractor looking for attention. She works directly in the CBI and attends many of the ongoing meetings. All the information she brings is not secretive or sensitive in nature.
It is actually a very good situation and will help Iraq move to the next step of the currency reform process much, much sooner. Is this not what we want? In the recent news from Iraq we hear from the results of the interrogation of Ali Al-Alaq (the CBI director) before the Integrity Commission. Once again, he says that everything is going according to plan. Really?
So, I asked my CBI contact on Wednesday that if everything is “going according to plan” as Ali Al-Alaq said then why has the not been started in mid-June that the plan called for?
Her response to my question was that the CBI has a plan for banking and currency reforms and that the plan did call to roll out the project in mid-June but it was the Federal Reserve (Feds) the stopped it. Again she told me that the plan can not move ahead without written agreements for assurances the US Treasury would continue the process once started.
She said that the Feds do not agree with the CBI plan as new developments are occurring since the plan was devised. She said the CBI must now be flexible and move more aggressively on the reforms due to these new developments in the region. She then explained the obvious to me as she told me about the corruption still lingering with the currency auctions and the dollar. She explained again to me, that there are two views as to how to handle the crisis with the dollar. The Feds want the process to move a certain way and the CBI, under the direction of Ali Al-Alaq, want it to go another way. The Feds feel that taking much more risk in the Ali Al-Alaq plan is not suitable and they sent in the US Treasury to fix it.
So, you can read Ali Al-Alaq’s testimony in the article today with the Integrity Committee as he covers a lot of issues. He sounds confident. But reality is what it is and the corruption continues. Of course, he is going to paint a rosy picture of successes not failures. The CBI had been warned many times about this corruption with the dollar and so my contact told me the Feds simply have had enough and it is time to step in and fix it. It is that simple. But I have to ask myself then why didn’t Ali Al-Alaq do it. Yes, just do it if it was required by the Feds and he knew it was required a long time ago. Isn’t this also what you are thinking?
Then my contact reviewed the new developments with the Israeli war on terrorism and this issue could explode the middle east if not handled correctly. She felt the reason why the Feds moved in so fast was that these dollars from Iraq are being laundered or funneled to Iran, Syria and Lebanon to fund these terrorist groups. This is the urgency and why they want to expedite the reforms and stop the flow of dollars now. She emphasized the word “NOW” not some months down the road.
As the conversation with my CBI contact in Iraq continued I could not help but remember the phrase “the best laid plans of mice and men” is a proverb that means that no matter how well prepared one may feel, their plans may still fall apart due to circumstances outside of their control.
My CBI contact could not give a more certain timeframe when her committee would be able to rollout the Project to Delete the Zeros. It seems the Feds want the parallel market rate to come down to match much more closely to the official CBI rate. Also the currency auctions must also come down to the amount to support the economy at about 250 million per day. Funny how Ali al-Alaq will tell the Feds that is at this amount, but when the Feds look at the audit they see double the amount almost each day. The director then explains what that extra is and that it is “under control”. Basically, telling the Feds don’t worry about it. But the Feds do worry about it and it is an issue that needs a resolution. Are you see a conflict yet with the CBI and the Feds?
She said this is one example of the conflict in managing the dollar with the CBI vs the Feds. Both the CBI and the Finance Committee agree that there are ample dollars in the reserves to handle these differences. Oil sales are high and so the risk is low. However, the Feds are more worried about who is receiving these dollars from the money laundering taking place through the parallel black market and auctions. This is the issue. So, to me it all stems about what side of the fence are you on? Are you more about managing the banking in Iraq or policing the situation of sanctions with these terrorist countries. Obviously, the Iraqi Central Bank cares more about managing Iraq and the Feds care about the sanctions. It is also a case of national sovereignty as Iraq is supposed to be a sovereign nation. The attitude is that if dollars do flow out, it the property of Iraq as it is the oil revenues. It is not the property of the Feds and so why do they care so much? The reserves are high and can absorb the loss. It is also felt there will be some levels of corruption as long as it is controlled to levels that are manageable.
Do you see now the difference of opinion now CBI vs Feds?
As far as timeframes, my contact told me to watch the progress of the banking reforms that the Feds are pushing. This includes the parallel market rate vs the CBI official rate and the currency auction levels. I then inquired and asked – Didn’t you tell me months ago that the parallel market rate was important and so why does the CBI not listen to the Feds?
Her reply to my question shocked me. I was told that when the money is flowing in Iraq they get careless and take more risk than they should. She compared it to a mouse in a cheese factory. When the mouse is fat and full it tends to be lazy.
I then asked is this why Ali Al-Alaq has sent in his resignation to the GOI? I was told that the GOI has not yet accepted his resignation and so it is not final. The news media ran off half cocked with the story. She said let’s wait and see what happens to Mr. Alaq. If he stays, he has to agree to work with the Feds and the US Treasury and work out a satisfactory plan, then take it back the Finance Committee and explain it. He is scheduled for a trip to the US for this purpose very soon. She said for me to allow the process to work itself out. She thinks he will remain as the proxy director for a period more. Let’s see what happens.
Today we read yet more articles on the banking reforms now in motion, just as I was told would take place from my 8/3 Saturday call. Yes, measures are being put in place just as my contact told me would happen and the situation with the banks is going to be resolved, and soon.
In an article today we learn from a member of the Parliamentary Integrity Committee, Hadi Al-Salami, revealed on Thursday that his committee has been following up for more than a year on the file of ending the assignment of the Governor of the Central Bank, Ali Al-Alaq, from his position. Al-Salami explained to Shafaq News Agency that the committee addressed the Prime Minister several times to pressure him to end Al-Alaq’s assignment, due to the existence of many violations against him.
If you recall way back in January 2023, that the government program announced to hire Ali al-Alaq back as director of the CBI for only 6 months. During this time he was supposed to accomplish certain goals, some of which he has not met.
So what do they now do with Ali Al-Alaq as there is pressure to dismiss him. We know he already submitted his resignation. I will let the information from my CBI contact guide us on this issue of dismissing Ali Al-Alaq. As I have said many times in the past I actually like the guy and I think he is a patriot of Iraq. I believe he does serve the country with honor and dignity. He does have the best interest of the country in mind with his policies. He has talked about reviving the Iraqi dinar to 1980’s levels. This is what we all want as investors. But I will add he is slow to act and does not force the CBI policies. However, I have to be fair also in that when he does get forceful the judiciary does not back him up either and enforce the rules of the CBI. For instance, many of the bank managers of these 24 sanctioned banks should already be in jail. Why are they not prosecuted already? Nori al-Maliki too is involved in much of the laundering of the dollars. Why is he still walking the streets free? So, you see although the news media wants to paint Ali Al-Alaq as such a bad guy, I believe he is caught between a rock and a hard place. They just want to screw him because they know if he did have the judiciary on his side he would clean house with them all. This still may happen someday and the know it. They need him gone.
I wanted to list some of the headings of the news just from the last couple days and so you can see the movement of the reforms taking place that the Feds are requiring:
IMPOSING GUARDIANSHIP ON ZAIN IRAQ BANK REVEALS THE EXTENT OF THE DETERIORATION IN THE BANKING REALITY:
The Central Bank of Iraq has placed Zain Iraq Islamic Bank under guardianship, in a move that reflects the bank’s unsound practices and unsatisfactory management performance, threatening the independence and integrity of the Iraqi banking system.
RAFIDAIN ANNOUNCES THE IMPLEMENTATION OF THE COMPREHENSIVE BANKING SYSTEM IN 37 BRANCHES:
“This important step came to strengthen the banking system, meet its requirements, and move away from paperwork and towards completely electronic systems.” He added that “the plan for digital transformation and adoption of the comprehensive banking system is proceeding according to the set timetables to include all bank branches in implementing the system. He added, “This important step came to strengthen the banking system, meet its requirements, and move away from paper work and towards completely electronic systems.”
AFTER SANCTIONS.. A NEW AMERICAN STEP TOWARDS IRAQI BANKS:
The United States of America did not stop at punishing some Iraqi private banks by preventing them from participating in the currency auction held by the Central Bank of Iraq daily to sell the dollar, but the US Treasury Department recently returned and informed it of the need to merge and close some of those banks, thus deciding their fate after many suspicions had been raised about them. Four Iraqi private banks were subjected to sanctions during the past period., most notably the Middle East Bank owned by businessman Ali Ghulam, who arrived in Iraq on November 19, 2022 and was arrested at Baghdad International Airport, based on an arrest warrant issued against him in accordance with Article 456, and then released on bail.
TRADE BANK OF IRAQ INVITES EXCHANGE COMPANIES TO PARTICIPATE IN THE DOLLAR SELLING WINDOW:
The Trade Bank of Iraq called on Wednesday all licensed exchange companies to participate in the cash dollar selling window for travelers. It is noteworthy that the Central Bank of Iraq decided on July 4, 2024 to start selling dollars to travelers, exclusively through corporate and banking outlets at international airports.
AFTER SANCTIONS.. A NEW AMERICAN STEP TOWARDS IRAQI BANKS:
The controversial ambassador within Iraqi circles said in a tweet she posted on the X platform (formerly Twitter) , that the aim of this participation is to listen to their experiences and learn how the United States can help in the growth of their businesses. Stressing that the United States is committed to helping Iraq diversify its economy and strengthen its private sector. Although this initiative appears on its face to be a positive step to support the Iraqi economy , it has not been free from criticism and questions about the intentions of the United States and its continued interference in Iraq’s internal affairs
