ECONOMIST: THE IRAQI BANKING SECTOR HAS ACHIEVED SIGNIFICANT GROWTH
Today, Thursday, the head of the “Iraq Al-Mustaqbal” Foundation for Economic Studies and Consultations, Manar Al-Obaidi, confirmed that the Iraqi banking sector has been able to achieve growth in many areas during the past period.
Al-Obaidi said in a tweet followed by “Al-Eqtisad News” that the data of the Iraqi banking sector between 12-31-2022 and 5-31-2024 indicate that the banking sector, despite all the challenges and shocks it faced during this period, was able to achieve growth in many areas, specifically in financial inclusion, as well as an increase in bank assets and maintaining the volume of deposits despite everything that was raised about the sector.
(Sounds to me like much progress in the banking sector just like they told us they had address the Pillars of Financial Reform and the banking sector was a major part of it. Are you seeing it yet?)
RV update
I need to start off my commentary today by highlighting some concerns by a few of my blog readers about the RV and the two step process to get to the reinstatement. I think it’s the misunderstanding by a few about this process that raises concerns. I have read all the blog comments. Although I thank everyone for the comments, as least I know someone is out there. So, I encourage those with concerns to please go FIRST read or re-read my writeup on the Project to Delete the Zeros and the Dr Shabibi plan. Then SECOND come back to this commentary and continue.
Any process I tell you about in the blog is not my opinion but FACTUAL information given to us by the CBI in 2011. You can argue over it and given your negative comments until the cows come home and it won’t make a bit of difference or change anything. If you think you are somehow being swindled then get the hell off my site. I am only trying to help people understand exactly the opposite of all the negativity and concerns. The plan I described was developed by the CBI and the IMF not me. Get it? It was published in a series of articles over a period of time in 2012. It is a sound plan and they told they will execute it “when the conditions are right”. They have said this over and over again in the last 11 years. The CBI attempting to execute on the plan once already and got stopped. You can go read why and how this happened in the rest of the blog. I have been in this investment for 18 years. These are smart people in the Iraqi GOI and CBI and know what they are doing. If you feel the plan is not a viable plan and is going to screw the outside investors than I suggest you sell you dinar and get the hell out of this investment. I am a bit tired of repeating myself over and over again on these issues.
First let me say that the three zero notes are not being obsoleted after the deadline in Iraq is over to turn them in. No one EVER said that! These notes will be used for “interbanking of international transactions” in the background where large sums of cash must be transferred. The CBI told us this many times in articles. Yes, eventually these notes will become obsoleted but we will be way out of this and exchanged by then. Get it? This is why I am telling go exchange ASAP and don’t wait. This three zero note currency of Iraq is not something you are going to hold on to and watch it grow for the future. This investment ends when the RV happens. Get it? This is not a stock investment. Get it? But the CBI did tell us there will “probably” be at least a 10 year use of these notes by the banks for this purpose. How does this concern you. Simply put it doesn’t and so why are you so worried about it?
Next, the CBI very distinctly told us this procedure of the Project to Delete the Zero is NOT a lop. In the articles back then, they described what a lop is and how it is used in times to relieve the stress on a currency due to hyperinflation. So, does Iraq have hyperinflation? They are averaging now about a 3-4% inflation rate with the highest of 9% when they did the de-dollarization in 2023. So, the tool of the “lop” does not apply. Get it.
Again, the Project to Delete the Zeros is a process to switch out or swap out the currency and get them out of the “sanctioned” mode and back to normalization. They are not doing it due to hyperinflation. I will not repeat this again. Read my lips! Go see a doctor if you can’t comprehend this notion.
Back in 2003 they did the exact same thing to swap out the Saddam Hussein notes (the lower denominations) for the larger 3 zero notes. Now they have to switch them back. They did this for two reasons: 1, to eventually get the Saddam picture off the currency; 2.to steal from the Iraqi people through the currency auctions using the pretext of trying to prevent terrorist funding when in fact this process has caused more of it. (they knew it would too and this was all a well thought out U.S. plot to steal the oil wealth from Iraq)
Like I said on my blog section about this process the rate will stay the same after the swap out inside Iraq. If a 5,000 dinar note is worth $4.80 US dollars today then the $5 dinar note after the swap out will be worth $4.80. Get it? No one in Iraq is getting rich. BUT THIS SWAP OUT PROCESS IS FOR IRAQ AND INSIDE IRAQ. Once the swap out deadline is over, these large three zero notes will not longer be in circulation on the streets in Iraq. Get it? I did not say obsoleted or null and voided.
When the swap out is done, they will watch for inflation and if all goes well, they plan to reinstate the currency. Now the rate on FOREX is going to be a normal value, as determined by QFS and the new rate linked to FOREX. The CBI site will then also link over to either the QFS or FOREX (I am not sure which) but it does not matter. The new rate will reflect the true value of the dinar not some suppressed rate as it is today while they play their stealing game of corruption. Get it? So then a $5 dinar note that was $4.80 before the reinstatement for instance, could go as high as $20 USD after the reinstatement if the rate on FOREX comes out at $1 IQD = $4 USD. This same rate would apply to the dinar both inside and outside of Iraq after the reinstatement. There will never be two official rates for the IQD.
While the swap out in Iraq is occurring, the dinar notes we as investors, outside of Iraq, have a choice. We can then either go take the swap out rate when it occurs, if the banks in our country want to exchange them at this time as this is the rate they will use, when this process occurs. Or we can wait for FOREX. This is also why they put the link on FOREX linking back the CBI official rate today of 1320 (about $4.80 for a 5,000 dinar note as in my example). This official rate while in swap out mode will change to just around 1:1. Yes this is also what 1:1 means. One 5,000 dinar note for one 5 dinar note. One for one. Get it?
As I said before there can only be one official rate of the dinar at a time. You as an investor can wait and go the bank when the reinstatement occurs on FOREX and get the new official new “revalued” rate for your dinar. I don’t know about you but I am going to wait for FOREX. Don’t be fooled, anxious or be greedy and rush into the taking the swap out rate when they conduct the swap out in Iraq. If you do it is your fault and your mess up, if you want to make any real money off this investment. Don’t blame me for being stupid! Again do you take the initial cheese put in the trap or do you wait.
Were you in this investment back in 2011 and 2012 when all this information came out? If not then go read my blog writeup on the process because I was in this investment and I was tracking all the information given to us investors by the CBI back then. If you were then you should know better than to ask such questions. So please don’t tell me how this is going to work. Please stop all your nonsense and relax. Stop all the hypotheticals it is a waste of my time to even address then as most are just nonsense and just shows a lack of understanding how the process will work.
I have also explained many times over already in my commentary that my CBI contact told me that the 3rd stage of the reforms is underway and was supposed to begin with the Project to Delete the Zeros in mid-June. The project did begin and is moving forward but they are also still waiting for the assurances from the US. This does not mean they can’t begin some of the process and do as much as they can in anticipation of getting it sooner than later. Why did delegates just spend a week in Washington, yes last week? It was to talk about the 32 banks under dollar sanctions. Come’on folks read the articles I am presenting! Why do I present these articles and take the time to find them, interpret them and list them if you are not going to read them? If you are lazy don’t blame me. The information is all there.
The CBI began the education already and I showed you a video of it. What the hell more do you expect. They can not actually perform the swap out until, what I believe, is that this crooked administration the Biden and Obama must end and somehow the new Treasury cabinet member to be designated by the new administration who has common sense and is willing to reinstate Iraq now and not wait for some long-term grandiose plan of Obama to happen but to give assurances to the CBI right now that the project should be executed in “full” measure. Yes, now and not wait. Otherwise, the CBI can educate all they want but the RV is still not going ahead until probably the election is over. You better pray the democrats are unseeded from power in the ability to be making these decisions for Iraq.
PILLARS OF FINANCIAL REFORM
So, this week we have many significant events happening in Iraq all mostly related to the Pillars of Financial Reform that the Finance Committee has talked about so often and are in the White Paper plan for Iraq.
“the strategy of banking reform and development is the basic pillar for comprehensive and radical reform of the national economy in line with what is stated in Article Twelve, Paragraph (7) of the government program”, which clearly and accurately stated that and I quote – “banking reform, with what it provides of a real and effective basis for the advancement of the Iraqi economy and the activation of investment through the restructuring and mechanization of government banks, reviewing their work, and stimulating and enabling private banks to be able to support investment and development in a real way.” Today is more of the reforms as they continue.
IRAQI STOCK EXCHANGE
Today they talk about the Iraqi Stock Exchange Iraqi Stock Exchange and how important it is and I quote from the article – “as in the case of the Iraqi model and long years of economic stagnation as a rentier economy that relies primarily on oil to finance its annual budgets and the state of price speculation on the stability of the dollar exchange rate in local markets or what is known as the parallel dollar situation, we can look at the Iraqi Stock Exchange as a tool supporting monetary policy and influencing the state of the rentier economy. The ISX can only add to the GDP outside of the oil revenues. This will reduce the dependence on oil for revenues (the rentier economy).
So, we learned about the launch of the broadcast of the Iraqi Stock Exchange (ISX) on YouTube. So this week Iraq witnessed the launch of the broadcast via the Iraq Stock Exchange website via YouTube, in addition to broadcasting via the market’s Facebook page.” This is all VERY GOOD news and heading in the direction we need. Choo Choo!
Former MP Manar Abdul Muttalib, on Thursday identified the features of black money in the Iraqi investment stock exchange, indicating that this money stolen from the Iraqi treasury has revived the economies of several countries . But how has it helped Iraq? Abdul Mutalib said in an interview with Baghdad Today, “There is no accurate figure for the amount of money looted in Iraq after 2003, but all indications indicate that it is hundreds of billions of dollars, some of which was smuggled abroad and some of which was turned into support for building economic wings for parties, forces and companies .” Can you see why now they fight to liberate the dinar? Most of this would stop. The goose that lays the golden eggs would stop. Like Dr Shabibi said to us way back in 209-2012 that longer they stay on the currency auctions and suppressed rate, the harder it will be to return to normalcy. We are witnessing that now.
Also we read that and I quote – “The investment environment in Iraq is going against the trend in the world in that anyone with $100,000 can invest in a project worth $100 million. This is a paradox. Yes, do you see why now they have to reinstate the dinar and off the sole peg to the US dollar and the 1/6 of a penny rate. Billions are being lost.
BANKING REFORMS
We learned that Rafidain Bank has started selling dollars to travelers by filling out an electronic reservation form and reserving it 72 hours before the travel date.” This procedure will onlytake place in the bank’s branches and receiving it through the bank’s office at Baghdad International Airport.” The mechanism will be adopted to provide hard currency to travelers according to the official exchange rate set by the Central Bank of Iraq.” Can you see how this is a step to stabilize the parallel market and legitimize the demand for the dollar? Will this finally get the parallel market rate equal to the CBI official rate, or at least much closer? Choo Choo!
I want everyone to know that Finance Committee that returned from Iraq after spending the week attempting to convince the US Treasury to let go of dollars sanctions of the 32 Iraqi banks was a failure. This was not good news. We still wait. I do not believe this will happen as the Biden administration is in turmoil in the US. The democrat party is desperate to stay in power at any cost. All efforts are going towards this and foreign policy, as we all can see is suffering greatly as a result.
VOLUME OF BANK DEPOSITS GROW
WOW! WOW! It is finally taking root. Al-Obaidi said in a tweet followed by “Al-Eqtisad News” that the data of the Iraqi banking sector between 12-31-2022 and 5-31-2024 indicate that the banking sector, despite all the challenges and shocks it faced during this period, was able to achieve growth in many areas, specifically in financial inclusion, as well as an increase in bank assets and maintaining the volume of deposits despite everything that was raised about the sector. Folks again this is all VERY GOOD news. We know the banks must recover the money from the hoarded stashes outside the banking system in order to provide liquidity for the banks to operate and use the funds to loan out and for other financial products. But they are not there yet and won’t get to the final goals until they change the rate. Choo Choo!
INSURANCE REFORMS
Wow! I also have some news for you today in the category of insurance reforms to help investors and businesses come in to Iraq.
So in today’s news we find out that Iraq is joining the International Association of Deposit Insurers (IADI) which will enhance the transparency and credibility of their national banking system. Do you think this was needed prior to the RV happening? My impression is NO! However, it is a part of th Pillars of Financial Reform they said they needed to address. It will certainly help in their country’s commitment to strict international standards in the field of deposit insurance. It sends a positive message to citizens and investors, stating that their deposits with banks that are members of the deposit insurance system are in safe hands and that the banking system is subject to effective local monitoring and supervision.
International bodies do not only provide a platform for the exchange of expertise, but also provide technical and advisory support to their members. National institutions can benefit from the expertise of international specialists in developing and implementing effective deposit insurance policies, assessing potential risks, and preparing for financial crises.
By adhering to international standards and implementing best practices, national institutions can reduce the risk of financial crises and enhance the stability of the banking system. Choo Choo!
Oil and Gas Law (better known as HCL)
Next we learn that the Parliamentary Oil, Gas and Natural Resources Committee expects that the Oil and Gas law will be transferred to the next parliamentary session, a member of the Parliamentary Oil and Gas Committee, Ali Al-Lami, said in an interview with Al-Mada news in Iraq. We know this is important I have been many times this is needed in the Obama/Biden economy plan for Iraq. Yes, I was told they must fulfill this constitutional referendum requirement. Choo Choo!
The RV train just keeps moving down the tracks quicker than ever. Quicker than my 18 years in this investment. Hold on to your hat. Anything could happen at this time.
