On Wednesday, the Economist talks about new measures for after stopping transfers. New measures after stopping transfers. What they’re talking about transfers of the auctions, if you will. I believe so.
It says the statements and interviews conducted by the governor of the central bank of Iraq, Ali Alaq in New York, over a three day period that’s recently in the past with the us treasury officials gave a new boost to confidence to the iraqi banking system. So it sounds like this last meeting was a little better than the one that was about a little bit, I think it was back in July. It seemed like that one might have been a little rough on a lot, but we’ll see. Well, we may not, but the interesting thing is it sounds like, well, in this case, they say it gave a new boost in confidence to the iraqi banking system.
It says al Tamimi, an economist who’s basically stated that the advanced steps to join the global banking system in terms of expanding experience and international banking relations, which will increase knowledge in control procedures for foreign transfers and direct sales of the dollar. So now is the time where they have finally got sorted for the banking industry in Iraq to be on board with international standards and compliance. I think it was a rocky road for them. I think that the dollar auctions was such a cash cow, if you will, that it was very difficult for those that had been going after Alaq for quite some time trying to diminish his reputation, etc, try to get rid of him, call him on the carpet.
It didn’t work. And a lot of those were politicians, politicians that got probably dirty hands.
But the neat part about it is that they seem to have subsided. And the news coming out now is phenomenal with what’s going on with the central bank of Iraq, al Sudani’s reforms, the US treasury, the US Fed, everybody that’s involved, World bank, even implications of maybe we could hear something from the WTO in the short term again, because they had a lot of really good news back in July and previous months about having completed requirements. So at this stage of the game, with all these banks getting on board. They started the process in 2003 and they’ve told us rather that, no, we’ve actually done this and we’re even further along and we only have about 5% left.
Even if that’s true, depending on the timeframe, which the context comes, a lot of times articles don’t give you the full context. So they could actually be further along than that, remaining 5%. We’ll see. It says that this will lead to the development of systems in line with international local standards, the development of a system for covering foreign trade and protecting the banking and financial sector from money laundering and financing terrorism.
So that’s, they basically are trying to eradicate that. The central bank of Iraq will stop dealing with foreign correspondent banks in the future and reduce reliance on them. So basically the central bank of Iraq and other central banks, they don’t normally deal directly with foreign banks and correspondent banks, but in Iraq’s case, because of the circumstances, they needed to do that. And so they did it for quite some time and they had to clean that up.
And it looks like that since the US treasury has been involved and al Sudani has been in town. TAFE Sammy, the ministerial Council of Economics has been around since what, late 2022. They’ve made inroads on the digital transformation, electronic platforms, the electronic borders. They’ve done all those things.
So this is like we’re coming to a crescendo to where that they’re finishing the processes up. It says they’re basically going to do gradually end the work of the electronic platform and transfers, replacing it with direct banking relations with iraqi banks and a network of international, international correspondent banks, in addition to achieving stability in the exchange rate in the local market. So they are moving on that so much of what this economic expert is saying has been and is well underway. This last three day New York City meetings with Alalac was to be somewhat of a follow up from the following meetings in July, like I mentioned.
So what we’re seeing is that evidence of what we’re seeing is Iraq basically getting ready to go international. What are they doing? They’re basically setting the stage for more and more things to happen and for people to realize where Iraq is in terms of international finance, financial and banking systems, and systems of the world.
Cross border payments in other foreign currencies is where they’re at. We’ve heard them talk about the euro, the Durham, the yuan, all these different currencies, etc, that will be involved even still with the dollar. That’s not going to go away. And we can also, we also see like the things that we talked about the last few days is Ernst and Young, KPMG K, two international payment companies like what?
Visa, Mastercard and MoneyGram. So we all know that those are those things.
This article says the government advisor talks between the Central bank of Iraq and the US Federal Reserve achieved advanced results. So this last meeting that we just mentioned is in New York City. Been there for a few days, is in advanced stages. The central bank, Federal Reserve are good and consistent with the rules of work.
So that’s a big thing. What are they going to do? They’re going to restore internal banking markets. So they did have discussions with the central bank and the Federal Reserve.
And what are they doing? They’re just, they’re being consistent with that work, that work that they normally do. So in other words, we’re going to get away from what we did in the past and we’re going to be consistent with what we normally do. That’s what they do.
Normally do. They don’t necessarily work directly with iraqi banks. They allow that to happen with correspondent banks, especially just like any other outside source countries.
I believe we know that the statement of the Central bank of Iraq, there is significant optimism that the results of the discussions of the delegation that were in New York with the Federal Reserve in the United States of America and in particular consultation with parties of the main banking system in the United States, specifically the large international banks concerned with international banking operations that cross the markets. That’s a key statement right there, because they cross markets, cross border payments.
They’re going to have to have freedom of capital movement. And this reeks of circumstances that would be considered in compliance with article eight IMF rules, not to mention potentially having Article 14 involved with the IMF, involved with that because of restrictions and cross border payments. Cross markets.
That article specifically talks about cross markets. That’s where Article 14 would probably come in and we’ll find out. It says, basically an advanced model of understanding has been achieved at this stage. So they’ve come to an advanced situation with Iraq.
This came to document the path of steps and banking mechanisms adopted in foreign transfers, especially those related to financing foreign trade for the benefit of the iraqi market and ensuring a degree of fluidity and flexibility with the scopes of foreign transfer operations and through effective roles that have been or will be played by global, global correspondent banking entities that enjoy high standards in terms of what strength in compliance with the rules and regs, disclosures and governance. That’s what these guys are there for, professionalism at the highest levels. And that’s what Iraq is going to be up against, ensuring fluidity and high flexibility.
Iraq isn’t going to be isolated to herself. She’s going to have to have an involvement across the world.
So What they’re up to is that these 13 private commercial banks that they talked to and referred to a few days ago referred to the statements of talks issued by that central bank of Iraq, which dealt with the results of the talks between the monetary institutions and authorities of Iraq and the United States of America. They’re going to allow implementation of what they believe is going to be clear, accurate path. A clear and accurate pathway to do what?
Accelerating payments, settlements. They’re going to be doing that. What are they doing it with? They’re going to be doing it electronically.
So what they’re saying is these operations and settlement services that they would provide between iraqi banks and correspondent international banks, as well as the beneficiaries in the trading financial cycles in international trade and exchange areas that Iraq deals with by paying in different reserve currencies. So It’s kind of a hard work, hard little sentence to go over, but different reserve currencies. So obviously, Iraq’s going to be using what, the dinar with other reserve currencies.
They’re not talking about using the dollar. That’s not what they’re talking about as far as I can tell, noting that in addition to the dollar as a payment and settlement currency, in addition to the dollar, which I told you before, other international currencies such as the euro, the pound sterling, the chinese yuan will take over that task. And so down to important stable currencies such as the UAE, Durham, and the indian rupee they bring in.
They didn’t talk about Egypt, but on other currencies. And the basis of this coordination with their monetary authorities in the United States comes from the fact that the fact the source of the country’s basic reserves before going to diversify other international currencies is the US dollar itself.
So that doesn’t sound like it’s going to change. Which is verified from the oil receipts deposited in the oil dollar currency at the Federal Reserve bank. And they go on to say that this is consistent with standard operating rules adopted in international banking. And the key part here is especially in the matter of building foreign banking relations and the safety of moving money through global financial and banking systems.
So, especially in the matter of building foreign banking relations and the safety of moving money through the global financial and banking systems should have everybody thinking to themselves, man, so they are going global.
Doing international business and doing business with those cross border payments will require a country to have an internationally accepted currency trading in the international forex market. All of the currencies that Iraq will be doing business with are now in compliance with the international standards and traded on the forex.
It says, especially in the matter of building foreign banking relations and the safety of moving money through the global financial and banking systems.
Global banking relations, global financial and banking systems. And they’re talking about who? Talking about Iraq. Central bank of Iraq reveals the mechanism for ending the electronic platform.
Electronic platform for foreign transfers managed by the Central bank of Iraq began in early 2023 as a first phase to reorganize financial transfers to ensure proactive controls over them instead of subsequent control through the Federal Reserve auditing daily transfers. This was an exceptional measure on the Federal Reserve’s part, and they don’t usually do that. It says a gradual shift was planned towards building direct relationships between banks in Iraq and foreign correspondent and approved banks mediated by international auditing companies. I wouldn’t be surprised if that’s Ernst and Young, KPMG K, two other companies.
It says 95% of the transfer process from the electronic platform to the corresponding banking mechanisms directly between it and iraqi banks has been achieved. So they started this in 2023, but now, during the year 2024, up to today, it says 95% of the transfer process from the electronic platform to the corresponding banking mechanism directly between it and iraqi banks has been achieved. I said it twice because it’s important, which means that only about 5% of it remains within the platform, which will be transferred using the same mechanisms before the end of this year and according to plan. They already started back in 2023, but they’ve got it 95% completed. Now, they could have even more done than that, because why they didn’t tell us when they got started? They don’t give you any context on that, but they go on to say, it says, with some of these expectations, possible effects on the exchange rate and transfer operations are baseless. So basically, because we will not be, will not be sudden or one to go at the end of this year, but rather it was originally achieved during the pass period.
They’re talking about 2023 and in that past period, with effort and careful follow up, except for the remaining small percentage of what will be accomplished in the coming short period. it could be minutes. It could be days, it could be months.
But obviously at this stage of the game, it’s probably could be done. We’ll see. Central bank of Iraq confirms that the trade with the United Arab Emirates, Turkey, India and China represents about 70% of Iraq’s foreign trade imports, which prompted the central bank of Iraq to find channels for transfer in euros, Chinese Yuan, indian rupees and UAE durhams.
And here we go again through approved correspondent banks in those 13 iraqi banks that we’ve already mentioned. But here they say the 13 iraqi banks have actually begun to conduct transfer operations with a pre audit mechanism that has been agreed upon and approved in addition to transfers in the dollar. They have actually begun to conduct those transfer operations with a pre audit mechanism, probably with those big entities that has begun, been agreed upon and approved in addition to the transfers in dollars.
For legitimate purposes and external purchases. Legitimate purposes? External purposes through the electronic payment channels.
Global money transfer companies. What was that? Visa, Mastercard, Moneygram. Cash sales to travelers and paying cash dollars for income transfers to the parties and purposes specified in the central bank’s published instructions.
The Central bank of Iraq stresses that it has placed foreign transfer operations and meeting dollar demands on sound paths consistent with international practices and standards and their anti money laundering and terrorist financing laws.
They’re doing it and in what manner and in what exchange rate are they doing it with and what comparison? Because if they’re going to be using the dinar, why wouldn’t they expose it. They’re still doing it at 1310.
So this is coming from the central bank, what I just read to you that’s from the central bank, it says what they did was they have price stability.
They had controlled inflation. It says any other price traded outside these channels is considered abnormal pricing. Those that do it are what unorthodox and illegal practices.
And basically those folks are going to bear the additional costs by purchasing the citizens. If you’re doing that, if you’re using the parallel market, you’re using the black market. Purchasing at a higher price than the official price is basically a bad thing.
And these folks are trying to delude others into believing there’s a difference between the official and the other pricing. So they’re basically trying to rip people off and they’re still doing it. But ultimately I think that they’ve got a grip on this. And now that they’ve got 95% or less, I think that they’re basically getting to that stage where they’re going to keep rolling it out.
I have to go back to the 2023. They’ve already started it and they came into 2024. And what we’re seeing now is the end results. So that last 5% to complete isn’t very much if it hasn’t been finished.
If you guys remember that the Turkmenistan model that we talked about more than once over the years was a model that they used because it was successful in a revaluation process.
It’s called the dollar dilemma. Sri Lanka as a model. It says to me when I was reading it, what works is used just like the Turkmenistan model for revaluations. In this particular case, they’re talking about the dollar and they’re talking about there’s many countries or rather emerging and rising economies that share the phenomena. Like Sri Lanka, like Iraq, etc. And because of a feature of the fluctuation of the dollar exchange rate and other impacts on their economies and their exposure to financial and economic crisis is periodically.
Iraq’s not immune to crisis is economic, right. If you remember a few years back, they had ISIS, then they also had the oil shocks and the pricing of that. They had to go borrow money.
Has Iraq gone to a non oil basis, these electronic platforms, so they could take advantage of collecting that money that’s at the borders for the tourism. They’re getting back their artifacts. They’re doing all these things to be able to provide services for everybody and to provide income.
We haven’t seen the turkish pipeline open yet. Well, why? Because we’re waiting for that exchange rate, I believe the salaries, etc that we’ve been talking about. Have they been completely 100 distributed yet? Well, no, we haven’t shown us that they have, but they’re talking about them getting their money electronically. So it’s like it’s almost everything’s waiting and hinging on one major item.
Iraq talked about the basket we already did with all those other currencies, but even regionally. It says that is for each foreign currency in the components of the basket and with specific relative weights according to the trade areas to which the country is linked externally.
It’s in order to get rid of or reduce parallel market pricing and bring them to a state of balance with the official exchange rate. So there’s always, there’s been a lot of talk about brics, etc.
It says that at this particular point, Sri Lanka basically achieved simple results from cooperation, especially in the field of settling cash payments through its currencies, and it’s hoped that it will be able to break the dollar monopoly in the long term. Well, that’s probably right. They might very well do that. But if you remember, one of the things that our country talked about was leveling the playing field.
And there was laws done in 2020 that talked about that. They talked about specifically undervalued currencies. They talked about many countries. I think people probably remember Iraq is an undervalued currency.
People probably remember that. Completely different circumstances. I don’t study it, but they, but they were. There was a focus on the vietnamese dong, for instance, and there were some other currencies.
I think it’s FIMA International monetary Authority, and believe it or not, they have one where it’s about the currency manipulation law. I think they were on April 6, 2020. If you guys can dig in deep, not easy to find, but if you do, you’ll know that what I say is true.
These things probably have come to play and we’re going to see the results. So, hey, it takes time to get things done, but now we’re watching all of these things come together at the end. I think Iraq has made significant adjustments to what they’ve been doing.
I think their non oil revenue streams is going to bring value to their country. If you remember, we talked about it numerous times, that Iraq was based on their past glory days, was based off of just oil. I don’t know if you guys realize this, but Iraq has a lot more than just oil. They have a lot more.
And when they talk about liquid natural gas, that’s a massive amount of income. They used to burn it and flare it and just waste it. Now they’re going to produce it and ship it likely to Europe.
If you guys remember, they have a lot of more oil deposits. They’ve been talking about more oil they’ve been doing to talk about leasing. So they’re not only going to increase their oil, but they’re going to increase their revenue streams, the non oil revenue streams.
And so that’s where all the ability to be able to support the value of their currency far more than some of the regional countries better doesn’t mean, but they’ll be competitive at least. So let’s just see what these guys do. But the news out of late is completely off the charts. And it points to, I believe, internationalism is where Iraq’s headed.
