Tuesday Morning Iraq Economic News Highlights 2-28-23
Iraq Tends To Use The Yuan In Non-Oil Foreign Trade
Markets London The New Arab February 28, 2023 Iraq plans to pay for private sector imports from China in yuan (Murtaja Latif/AFP) Iraq tends to use the Chinese yuan as an official currency in its non-oil foreign trade exchanges. The Iraqi government plans to pay for private sector imports from China in yuan in order to inject foreign currency into the financial system and help relieve pressure on the dinar , according to the US Bloomberg Agency, today, Tuesday.
Saudi Arabia and the UAE have previously taken steps to use currencies other than the dollar in non-oil transactions.
The UAE and India are working to promote non-oil trade in rupees, and Saudi Finance Minister Mohammed bin Abdullah Al-Jadaan recently said that the kingdom is open to trade in currencies other than the dollar.
Iraq, the second largest producer in the Organization of the Petroleum Exporting Countries ( OPEC ), is intensifying its efforts to stabilize the dinar, after raising its value earlier this month.
Iraq suffered from a shortage of dollars after being subjected to US pressure to limit the flow of funds to neighboring Iran, as the Federal Reserve Board (US Central Bank) in New York imposed, last November, stricter controls on dollar transactions by Iraqi commercial banks. .
An official source in the Central Bank of Iraq, who asked not to be named, said in previous statements to Al-Araby Al-Jadeed, “The bank launched, in the past short period, a second package of reforms to push the dollar to decline closer to the official price, and focused on facilitating trade financing from China.”
Through the electronic platform, it also included the facilitation of money transfers to the United States and Europe and the facilitation of citizens transferring money through international companies (Western Union and Money Gram) and for various purposes.
This is happening at a time when countries are balancing the US currency in global trade and establishing deeper economic relations with emerging powers in Asia, and China has been pressuring the use of the yuan in transactions with major energy and commodity exporters.
While Middle Eastern economies may flirt with other currencies, according to Bloomberg, their decades-long dollar foundations are here to stay. LINK
With Anticipation Of The Results, The Chinese Yuan Is Chasing The Dollar In Iraq’s Foreign Trade
726 New dealings in Iraq’s foreign trade through the use of the Chinese yuan currency to help strengthen its dinar and to relieve pressure on the dollar after the latter witnessed large booms against the Iraqi dinar in the parallel market, which caused great economic problems and revived the black market.
The Central Bank of Iraq revealed that the step of paying in Chinese yuan comes within the second package of transactions, which includes organizing foreign trade from Beijing, by providing facilities for financial transfers to the United States and Europe, using the same mechanism later.
A number of specialists in financial and economic policy agreed that the use of the Chinese yuan currency comes to relieve pressure on the dollar and to reduce the time period for cash transfers for trade purposes.
Payment Is Subject To Compliance
And the financial advisor to the Prime Minister and former deputy governor of the bank, Mazhar Muhammad Salih, said in a press interview seen by “Takadam” that “the step of paying in the yuan currency comes so that the mechanisms that are in dollars are lighter,” adding that “this does not mean that it is not subject to compliance rules, as all transactions Foreign affairs and foreign trade financing, whether in dollars, yuan or euros, are subject today to the compliance platform, in which the papers must be correct, the final beneficiary is present, and the goods enter Iraq.
He added, “This measure will not extend its application to Iraq’s oil trade,” explaining, “This measure covers only private sector imports.”
He pointed out that “Iraq’s trade with China is large, and in order not to be hindered, the Chinese yuan was adopted as an intermediary currency to finance foreign trade for the private sector only, but this does not prevent the existence of auditing, compliance and knowledge of the final beneficiary.”
Throw Ashes In The Eyes
“The use of this or that currency in commercial exchanges and monetary and financial transactions is not subject to decisions from above, but rather to the facts that control the global monetary system,” says economist and oil expert Hamza Al-Jawahiri, in a press interview seen by “Takadam”.
He added, “Many countries previously announced the abandonment of the dollar and the adoption of other currencies such as the ruble and the yuan, but these decisions were in most cases sterile, and it is an attempt to sow ashes in the eyes and achieve imaginary victories. It is related to confidence in these currencies and the independence of the central banks that issue them.”
He pointed out that “the adoption of the yuan in relation to foreign trade for any country means narrowing the opportunities for trade exchange to a large extent because the confidence of dealers in it at the global level is limited, while the dollar is still on the throne of monetary transactions.”
And he stressed that “most of Iraq’s foreign trade takes place with China, so if Iraq succeeds in converting it into Chinese yuan, this is considered liberation from the dominance of the dollar in global trade and it will be in the interest of Iraq.”
The Conversion Is Faster
The economist and professor of economics at the Iraqi University confirmed that “using the yuan currency in foreign trade with China will be subject to the same previous conditions and will not be outside the electronic platform, which is the point that some had imagined that it would not be subject to the platform,” noting that “in all cases, you will pay in dollars until you get on the other currency.
He added, “Some of the merchants called on the government to import goods from China in their local currency to facilitate the import process faster, which was approved by the Central Bank of Iraq.” The American who will finance Iraqi trade through China by paying in dollars and converting it into Chinese yuan.
Al-Mashhadani explained that “this process may make merchants feel more reassured, liberated, and quick in transferring, after these transfers were made for more than 20 days, which is a long period for them, while relying on the Chinese Bank as an agent or the Asian Development Bank will shorten the period due to the presence of a financial balance in these banks.” .
Iraq witnessed a shortage of dollars after it was subjected to pressure from the United States aimed at limiting the flow of money to neighboring countries, which had been imposed financial sanctions by the United States of America, and the Federal Reserve Bank of New York last November imposed stricter controls on dollar transactions for banks.
As a result, the approval of transfers slowed down and ultimately prompted merchants to buy dollars from exchange offices, which raised the price of the dollar against the Iraqi dinar to high levels, which led to a rise in the prices of basic and food items in the local markets.
https://takadum-news.com/archives/151548
The Central Bank’s Dollar Sales Increased By 124%
Economy News-Baghdad Today, Tuesday, a report by the Central Bank of Iraq confirmed that its sales increased by 124%, to record $233 million.
The bank’s report stated, “It sold today, during a window for buying and selling US dollars, 233 million and 921 thousand and 34 dollars, an increase of 124% compared to yesterday, Monday, which amounted to 104 million, 216 thousand and 250 dollars, which the bank covered at a basic exchange rate of 1305 dinars per dollar.” Dollars for documentary credits and international settlements of electronic cards, at a price of 1310 dinars per dollar for foreign transfers, and at a price of 1310 dinars per dollar in cash.
He added, “Most of the dollar sales went to reinforce the balances abroad in the form of (remittances, credits) at 180 million 321 thousand and 34 dollars, while the rest of 53 million and 600 thousand dollars went in the form of cash sales.
He pointed out that the banks that bought cash dollars amounted to 15 banks, while the number of banks that met requests to strengthen balances abroad reached 23 banks, while the total number of exchange and mediation companies participating in the auction was 190 companies.
https://economy-news.net/content.php?id=32714
A Citizen In Need Of Dollars Can Only Find It With Speculators
February 28, 2023 Baghdad / Obelisk: Iraqi citizens complain about the inconsistency of dealing in dollars through private banks, which forces them to wait for hours without a breakthrough.
The Central Bank authorized the sale of dollars to citizens at the official rate, by a number of private banks, within the monthly quota of 7 thousand and 500 dollars.
Accusations are leveled at currency dealers of acquiring citizens’ shares in agreement with banks.
The exchange rates of the dollar have stabilized in the local markets. The selling prices were recorded at 152,500 dinars per 100 dollars, while the purchase prices were recorded at 152,000 dinars per 100 dollars. And the bank decided, earlier, to adjust the exchange rate of the dollar against the dinar, as the price of buying a dollar from the Ministry of Finance reached 1,300 dinars per dollar and sold it at 1,310 dinars per dollar to banks through the electronic platform, and it is sold from banks to the final beneficiary at a price of 1320.
Speculators are active through the black market for the dollar, which has kept the exchange rate of the dollar high in the parallel market, with a difference of up to 200 dinars from the official rate.
The bank launched a second package of reforms to push the dollar to decline closer to the official rate, and focused on facilitating trade financing from China through the electronic platform, as well as facilitating money transfers to the United States and Europe, as well as facilitating citizens’ transfer of funds through international companies (Western Union and Money Gram). And for multiple purposes.
However, banks complain about the difficulty of obtaining dollars, and the delay in disbursing funds, which reaches a period ranging from 10 to 14 days from the date of submission of the request, and in limited quantities that do not exceed 100 thousand dollars per request and do not exceed 200 thousand dollars per month and do not cover the market need.
The economic advisor, Ziyad Al-Hashemi, expects that if banks, companies, and merchants fail to adapt to the requirements of external transfer controls, the dollar exchange rate will continue to rise, indicating that the continued support of the dinar from falling costs the Iraqi treasury millions of dollars per month.
Journalist Ali Al-Azzawi believes that the Iraqi government must provide teams and committees to follow up the exchange rate of the dollar in private and governmental banks and monitor merchants and market owners who exploit this situation under the pretext of the rise of the dollar, calling for strict penalties to control the economic situation in markets and banks.
Activist Aziz talks about private banks that have fake companies that withdraw the dollar from the currency auction, go to the black market, and flee outside Iraq under the pretext of importing from fake companies that do not exist.
The continued work of speculators leads to confusion in the market, in addition to the underdevelopment of monetary instruments in Iraq, as the interest rate was not well invested, and the bonds offered are also ineffective, and even compulsory saving is not considered an appropriate option at the present time as a result of the problems arising due to a “living crisis” caused by On the mismanagement that accompanied the process of changing the previous exchange rate, which led to the citizen losing about 50% of his real income, according to the economist, Dr. About 77% of the total currency issued, pointing out that this matter needs real education and hard work by banks.
https://almasalah.com/archives/43824
