In today’s commentary I have to refer first to some “massive” news. Yes, this news was massive. I am talking about the news in the article titled “ECONOMIST: THE CENTRAL BANK’S POLICY IS MOVING TOWARDS GLOBALIZING IRAQI BANKS”.
In this article economic expert “Safwan Qusay confirmed that the Central Bank’s policy is moving towards globalizing Iraqi banks, while stressing that it will contribute to raising the status of these banks globally” also “the process of ending dealings with the electronic platform will contribute to accepting local banks that have the ability to provide guarantees and international compliance conditions with international correspondent banks.” Yes, “providing guarantees and international compliance” is all insurance related. Remember our Pillars of Financial Reform? Well… here they are again. Investors in Iraq need to know that their funds in Iraqi banks will be protected and not subject to being stolen from corruption or in some cases, as from the past the events, “just disappeared!”. These past events of corruption left a nasty stain on the Iraqi banking system, to which they now have to overcome and are overcoming.
Now here is the real juicy part of the article and I quote “He added that these correspondent banks can carry out the process of changing the Iraqi Dinar to any global currency immediately, and for more than a million banks around the world.” What did it just tell us? A million banks around the world? What does this mean to us as investors?
We know that from reading the White Paper of 2019 that conditions to get back to FOREX that this insurance part is a pillar of the financial reform. Therefore, it is a reform that needed to take place and is now taking place. Also, I want to add that the statement of “changing the Iraqi dinar to any global currency immediately” is an amazing statement. The article goes on to also say and quote “this step will contribute to raising the status of Iraqi banks globally, “meaning that they will succeed in the process of having a name in international financial transfer operations, and gradually confidence between banks will be strengthened,”
Could this news get any better at this time? Can this be what is holding up the revaluation and the reinstatement? Just asking….
This next article titled “THE DECLINE IN THE DOLLAR PRICE AGAINST THE IRAQI DINAR IN LOCAL MARKETS: IS THIS THE BEGINNING OF STABILITY? is amazing too. It conforms exactly what I have told you would happen from my conversations with my CBI contact when dealing with bringing down the parallel market.
It is as if someone is reading my mind again…. So, didn’t I tell my readers months ago and again more recently, that the parallel market, once they institute the banking transfers through the correspondent banks, (starting Jan 1st 2025) that there would first be a spike in the dollar rate as the initial shortage of dollars in the black market will be a shockwave. Then as time pressed on, we will gradually see the rate drop and come closer and closer to the “official” CBI rate, something they need to have in order to begin the project to delete the zeros and move ahead to further steps in the currency reform we are waiting to see.
In the news in this article today, “the Iraqi local markets witnessed a slight decline in the exchange rate of the US dollar against the Iraqi Dinar, as the selling price of 100 dollars reached 152,000 Iraqi Dinars, while the buying price recorded 150,000 Iraqi Dinars. This decline comes in light of the efforts of the government and the Central Bank of Iraq to control the exchange market and enhance the value of the Dinar. ”Didn’t the CBI and the prime minister tell us this is the goal – to enhance the value of the Dinar? To bring it back to its “glory days”? They are doing it and this last step is going to stabilize it by shutting down the parallel market of selling the Dollar at absorbent rates.
In the article it further says that “this decline is attributed to a number of factors, most notably the increased injection of (other) foreign currency into the markets (besides just the dollar), the imposition of strict controls on exchange operations, and the improvement of financial and economic policies”. Then the article goes to say the best juicy part of all and I quote – “All eyes will be on the coming days to see how long this decline will last and how it will impact the Iraqi economy as a whole. Are we on the cusp of a period of monetary stability?”
Could this all be what is holding up the revaluation and the reinstatement? Just asking….I was told it is by my CBI contact. Do you remember?
In the next bit of news in an article titled “IT CAN BECOME A MAJOR SOURCE OF INCOME IN THE ECONOMY.. AL-SUDANI DIRECTS THE MATURATION OF TOURISM PROJECTS”. In the article Al-Sudani directed to work on maturing tourism projects and offering them as a single package, especially since developing this sector will contribute to strengthening and diversifying the national economy by activating vital sectors, including the tourism sector, which the government is keen to activate for the next stage. He pointed out that tourism and its components are available in Iraq, and it is possible to transform into a basic source in the non-oil economy.
According to the statement, the meeting approved extending an invitation to a Spanish company specialized in tourism development in order to put projects related to this sector into action, as well as to develop the capabilities of specialized tourism cadres and keep pace with the latest developments witnessed by this sector globally. Twenty one (21) tourism projects were also reviewed, including hotels, resorts, sustainable forests, cities and entertainment complexes in Baghdad and various governorates, which provide attractions, infrastructure and economic feasibility. Folks this is going to be BIG!
So now we can see that Al-Sudani is taking on this non-oil revenue sector seriously and will exploit it to overcome the rentier economy (oil based economy) of Iraq. Now you add this to the other non-oil sources of revenues and you have a booming economy for Iraq. Are you tired yet of saying WOW? They will soon be filthy rich with little to no debt. They are backing their currency with GOLD too. Oh…. their dinar is at what price? A 1/6 of a penny? Really?
This is another article about these future non-oil revenues. The title of the article is “GOVERNMENT ADVISOR: ASYCUDA SYSTEM IS A VITAL TOOL FOR DEVELOPING CUSTOMS WORK AND BOOSTING INTERNATIONAL TRADE”. Oh… didn’t we address this one before? The Prime Minister’s Advisor for Financial Affairs, Mazhar Muhammad Salih, reviewed on Sunday, the importance of adopting the ASYCUDA system in customs administration, noting that it reduces delays at ports and boosts international trade. Yes, yes, just do it. But can you?
Saleh told the Iraqi News Agency (INA): “ASYCUDA is a customs data management system developed by the United Nations Conference on Trade and Development (UNCTAD) since the eighties of the last century, as this system aims to simplify and accelerate customs and border crossing operations using modern digital technology, according to the generations of the system applied, including the second advanced generation that relies on cloud digital technology.” Remember again that this system needs a link to FOREX currency exchange to get the most current, UpToDate rate of currencies in order to calculate the fees. They cannot “fully” implement it without this tie in.
But here is the juicy part of this news today about customs revenues and I quote from the article “in line with the government program to enhance the efficiency of collecting non-oil revenues and make them no less than 20% of total revenues” What did they just say? Did they say customs would be no less than 20% of total non-oil revenues?
But what about the revenues for tariffs? I am sure eventually we will be reading about them too and the percentage of total non-oil revenue they represent. This news will probably come out when the Port of Faw is fully operating. Also don’t forget about the Development Road Project and what this will mean to Iraq.
In another article titled “CENTRAL BANK RENEWS DIRECTIVE TO SPREAD AND EXPAND FINANCIAL SERVICES AND ATMS” we read that the Central Bank of Iraq renewed, on Sunday, a directive to banks and non-banking financial institutions to spread and expand their financial services in areas that lack the presence of various services for bank card holders. Why are these ATMs so important to our investment in the Iraqi dinar? They are important because the CBI told us they are an integral part of the Project to Delete the Zeros.
