Significance on the use of the ATMs to the “Project to Delete the Zeros”:
Another topic that many are still skeptical on is the significance of the Automated Teller Machines (ATMs) in Iraq. So I researched through my archives of articles to find the article to prove my point about the ATMs and their significance. Remember just recently we read two more articles about these ATMs and how they were installing thousands more of them through the Rafidian Bank, which is a government owned part of the Central Bank. If you still don’t believe me that the ATMs are VERY significant after reading this article then I can’t help you anymore. But why would they even mention the Project to Delete the Zeros in the same breath (article) and also talk about the project if they were not interconnected in some way. Can you figure out how they are connected? Can you let me explain to you what my CBI contact told me on my Wednesday call to Iraq?
Rafidain Bank in Dhi Qar confirms that the introduction of ATM depends on the currency
In 2014 the director of the Rafidain Bank (Dhi Qar Hussein Abbadi) said in a televised interview broadcast by the local Nasiriyah that the introduction of ATM in the markets and banks ARE SUBJECT TO THE IMPLEMENTATION OF THE DECISION TO DELETE ZEROS FROM THE IRAQI CURRENCY, pointing out that the Iraqi currency suffers from large inflation at the present time.
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Let me now explain in more detail. I included this article that told us that the Automated Teller Machines (ATMS) in Iraq were part of the project to delete the zeros and were only supposed to be turned on when the project occurred. This of course did happen as they are turned them on with the 250, 500 and 1000 notes being now dispensed from them. This was in 2014. Oh…did you read that they already started the project to delete the zeros? Yes, they did in 2014 but remember it was put on-hold due to ISIS over running the country at this time. They have not yet moved to the next phase, the phase of the project we want to see. Get it? But this is still a very good sign to us and shows they are serious about doing the project and the importance of the ATMs.
We must remember that the paper currency is not going away and the CBI told us they are not going solely to a digital currency but rather trying to catch up the wester society in merchant electronic payments (debit cards) and electronic payments of salaries and benefits. The goals is just like in the U.S. the government sends your social security payment to your preferred bank account or your employer sends you payroll (minus taxes) to you preferred bank account. This makes it hard for the citizens to stash large amounts of cash at home, thus taking it out of circulation. Remember they told us that nearly 80% of the cash is stashed in people’s homes in Iraq. The banks need this cash for liquidity to loan out. So, when they do finally receive in all this cash, as part of the currency swap out, they don’t want to repeat this hoarding and stashing of money again outside of the banking system. Thus, the ATMs will allow for more control of money as daily limits will make it harder to get cash to stash. The ATMs will be the vehicle for this purpose and take the load off the banks with personal walk-ins which also can be subject to criminal activities and corruption. This way its all electronic and not much personal intervention. But to make this successful they needed to get these ATMs setup and dispersed. We read this is now taking place. Its all good news but I just wanted to explain today in more detail why I keep saying this to you. Yes, I would consider this “WOW!” news.
So, what is the newest news from Iraq?
On Wednesday, the Deputy Prime Minister and Minister of Foreign Affairs, Fuad Hussein, visited Washington DC and met with the US Treasury Department, for issues related to monetary policy and banking. Mainly it was all about the 32 banks not allowed to deal with US dollars and easing of these sanctions on them. The Central Bank feels that if the US would only let them do the reforms their way, according to their plan they can ease the tensions with the dollar and finally raise the value of the dinar. But does the US really want this to happen. Many Iraqi economist are skeptical in the sincerity of this current US administration. The results of this meeting this week have not yet been revealed but I am sure they will come out soon. If these talks are successful, this could play major role in getting the parallel market rate very close, if not equal to the official CBI rate in the coming weeks.
Also more in the issue with the dollar were revealed by Economic expert, Munir Al-Abidi on Tuesday who told us there is a large volume of trade between Iraq and Iran, while indicating that the dollar problem in Iraq is not due to official trade as the article told us and I quote – “Our official trade for the private sector does not exceed 3 billion dollars with Iran and does not exceed 300 million dollars with Syria,” stressing that “the problem with the dollar is not the official trade with Iran and Syria.”
He then pointed out that “the problem of the demand for dollars in the local market is to cover the needs of other types of informal and illegal trade, most notably drugs,” stressing that “all this fuss, crying and wailing in the channels is to reopen the money channels for this trade.” Can you see the corruption? Yes, Iraq has an illegal drug issue just like in the US. Do you see the problems this causes for society?
RADICAL CHANGE IS HAPPENING:
There is a VERY GOOD article in today’s Article Section that talks about the efforts and measures taken by the government and the Central Bank to implement what is stated in the government program of the government of the Sudanese Prime Minister. It is titled “PROPOSED VISION TO ACTIVATE THE GOVERNMENT AND CENTRAL BANK PROCEDURES IN ECONOMIC AND BANKING REFORM”. Please take some time to read it in detail as it will allow you to understand in part why we have waiting so long for the RV to happen. It’s not rocket science to understand why. They tell us without achieving comprehensive and radical economic reform that begins with financial and banking reform, the government’s complete goals and visions cannot be achieved. What are these goals and vision? They are all spelled out in the White Paper plan. Therefore, the government program, as the author sees it, is a four-year strategy to achieve the revolution of economic, financial and banking reform. Where are they in this four year plan? Will it really take four years?
This article analyzes the past administrations in their efforts or lack of performance in their efforts for the needed reforms to move Iraq ahead compared to the Sudanese administration, which is the ninth government after the change in 2003 from Saddam Hussien. Sudanese has been in charge for only approximately one year and eight months and his progress amounts to much more that all the other administrations combined. Really? Yes, really! From the article you can see that things have changed drastically for Iraq and they are now moving aggressively ahead. But we must also remember all the wasted years that they could have conducted the reforms and didn’t. We must ask why not? Why were all these years wasted?
Yet another VERY GOOD article in our Articles Section today titled ‘MINISTER OF TRADE: ALL COUNTRIES ARE KEEN ON IRAQ’S RETURN AS A GLOBAL ECONOMIC PLAYER”. Just in the title alone gives us assurances that the atmosphere in Iraq under the Sudanese government has changed. It was reported that the Minister of Trade Athir Dawood Al-Ghariri confirmed on Friday, yesterday and I quote – “that negotiations for Iraq’s accession to the World Trade Organization are proceeding at a rapid pace, while indicating that all countries are keen on Iraq’s return as a global economic player.” So, does this article sound like it will be much longer before Iraq’s accession takes place. But just not yet. Can Iraq really come back as a super power in the global markets without a currency globally traded? I don’t think so. But the important part is not really what you and I think but what the plan is for Iraq. We must stick to FACTS. Again no rumors just the FACTS. Go to the White Paper and see what the plan calls for. Yes, it does call for the reinstatement back on FOREX but only as a byproduct of the reforms being implemented. Yes, they must work on the Pillars of Financial Reform.
I know, I know you are asking and thinking now in your head – when is the end ? When enough is enough of reforms to finally conduct the Project to Delete the Zeros and then to Reinstate to FOREX?
The problem with asking this questions is I don’t think anyone, even the CBI knows. The only criteria, if you really want to know, is to go read the White Paper as it outlines what must be done to achieve the end result. Remember Iraq does not look at it the way we do. We really only care about going to the bank and exchanging. But rather in Iraq they are rebuilding a nation, getting out of the war time mode of being sanctioned and antiquated banking and financial practices. This is what is really important to them and they know that if they can be successful the rest will fall into place.
Another article titled “PARLIAMENTARY FINANCE: IRAQ ADOPTS A VISION TO INCREASE ITS RESERVES WITH THE CENTRAL BANK” reveals to us that Iraq is backing their dinar currency with GOLD and a basket of other currencies. What did I tell you? Now what we are looking for is at some point they intend to turn to a new peg and use these other currencies to strengthen the dinar even more and visa versa. Get it? Its coming and this article is telling us of the vision. This vision is also spelled out in the White Paper. Yes, the plan is all there if you care to read it.
A member of the Finance Committee, Mudar Maan, confirmed last Friday that Iraq had increased its balance in what he called a safe haven.
Maan said in an interview with Al-Ma’louma and I quote- “Iraq has adopted a good strategy in diversifying the financial reserves it has in the Central Bank, especially gold, the balance of which has risen according to the latest readings to about 150 tons.“ What more gold? Yes, and now you know why.
He then added and I quote again – “There are three positives to Iraq’s strengthening of its gold balance, the most notable of which is confronting the fluctuations of the international financial markets. It also represents a desirable guarantee in the markets, in addition to strengthening the country’s financial capacity.”
But here is what I really wanted to read and in the article he pointed out that “Iraq is adopting a vision to increase its reserves with the Central Bank, expressing his hope to move to dealing in a diversified basket of currencies and committing to setting sufficient reserves that will make us more capable of facing any financial fluctuations in global markets”.
If this was not enough of “WOW!” news then they told us and I quote –“It is noteworthy that gold reserves in banks affect financial dealings by adding another advantage to the strength of the currency and the economy and the possibility of resorting to them in times of need” WOW! WOW! WOW! Do you get it yet? Do you see it yet? They did not talk about the Sovereign Funds they are putting together either to help invest to pay down debt and fund budget deficits. WOW! again….
