During the meeting, Al-Sudani stressed that the government is adopting a constructive economic policy, improving the level of services that citizens receive from state agencies, alleviating their suffering, and completing the infrastructure that will provide an additional boost to development projects at various levels.
IN THE PAST 20 DAYS, IRAQ LOST ENOUGH MONEY TO BUILD A NEW POWER STATION OR A LUXURY RESIDENTIAL COMPLEX
About 20 days have passed since the start of the decline in oil prices, which has sparked fears about the size of the loss that Iraq, which is heavily dependent on oil, will incur , and the possibility of its impact on salaries.
While assurances were issued that salaries would not be affected by this level of the current decline in oil prices, as salaries could be provided even if the price of oil reached $60 per barrel, It actually suffered a huge loss during September for two reasons compared to previous months.
The prices of Iraqi oil during the fifth months until the end of the seventh were ranging at an average of between $88 and $79 per barrel as a minimum, which means that on average the price of a barrel of Iraqi oil can be considered to be $84 per barrel as a minimum, but in August the average price of a barrel became $75 per barrel.
Since the beginning of September until now, the average price of a barrel of Iraqi oil can be calculated at $70, which means that it has lost an average of $14 per barrel compared to the average price during the past months.
Accordingly, while issuing 3.3 million barrels in September according to the OPEC agreement, which means that Iraq lost about $925 million in the last 20 days alone.
At the same time, it was Issued more From 3.4 million barrels in August and July, but in September its exports decreased to 3.3 million barrels, which is another matter that caused a loss for Iraq, in response to compensating for the surplus production. During the past months according to the OPEC agreement.
And by calculating the export loss of 100 thousand barrels per day, the loss will be Iraq Over the past 20 days, it has amounted to $140 million, in addition to the loss of $925 million from the decline in oil prices.
RV Updates
The Project to Delete the Zeros is not just a common project to redenominate but for Iraq it is also a steppingstone as part of the process to the reinstatement.
We witnessed another onslaught of articles about the Project to Delete the Zeros once again. Remember the past when we didn’t hear anything for years and then in July 2023 the CBI reminded us about the project again. Remember the news media reports what is going on in Iraq so someone, something must have reignited the spark for the Project to Delete the Zeros. Was it the CBI?
Yes, it was the CBI and when the CBI talks, I listen. All the economists have opinions, as factual as they may be, they are still just opinions. But the CBI sets monetary policy.
Let’s start with an interesting article titled “IRAQ PLANS CURRENCY REDENOMINATION AMID ECONOMIC CHALLENGES“. My goal today is to show you that this is just not another article about the Project to Delete the Zeros but much, much more. I also want to show you that I believe this project is going to move forward this fall, and I am told not until after the US election.
I quote – “The Central Bank of Iraq (CBI) has announced that discussions regarding the project to remove zeros from the Iraqi dinar are ongoing,” Oh…. but we already knew that, didn’t we? It is September and if you recall my CBI contact told us the committee was planning to begin the roll out of the currency swap out in November. Then the article went on to say and I quote – “To address these issues, it has amended some monetary policies in line with the international situation, aiming to increase confidence in the Iraqi dinar and prevent a significant decline in its value.” Is this not one of the main reasons for the Project to Delete the Zeros?
I quote again – “Earlier this year, the Iraqi federal government decided to postpone a plan to remove three zeros from the nominal value of its currency notes, citing that the current economic climate was not suitable.” Earlier this year? Is it suitable now? Is this what they are telling us? Did you read it?
The US Treasury decided to stop it and we know the rest about the banks and the corruption that we read. Now the CBI has decided to do it this fall. This is why they occupy an entire floor in the CBI. The reasons are really two-fold: 1. One is to help reform their banking system to allow them to do it and 2. the other is to be onboard to assist in the actual swap out. You will not see the US Treasury leave the CBI until this is done and the Project to Delete the Zeros (swap out) is completed.
Another piece of the puzzle also surfaced I quote -“Last year, the central bank indicated plans to redenominate the Iraqi dinar to simplify financial transactions in an economy that remains heavily centralized and oil-dominated, where deals are often conducted in cash.” So, what the CBI is saying is that they reminded us that last year they indicated plans to do it and this year they are going forward with it.
Please take a look at the article titled ” REMOVING ZEROS FROM THE IRAQI DINAR IS BACK IN THE SPOTLIGHT..STRENGTHENING THE CURRENCY OR JUST CHANGING ITS FORM?“ I quote – “The process of deleting zeros is linked to the Central Bank of Iraq,” indicating that “the issue is not new and was previously discussed about 14 years ago.“ Look at all the fake evidence presented at the UN to justify the overthrow of Saddam. Having this currency auction in place also allowed for a massive corruption scheme and up to a trillion dollars’ worth of oil revenues were stolen and never made it to the people of Iraq for the benefit of the people of Iraq. If this war was not a conspiracy, I don’t know what is.
The reason why al-Sadar, the political cleric, called off his million-man march this week, was for reasons that promises were made to correct the situation and that, for now, is what matters. If you have been following the news from Iraq, you know that al-Sadar has meetings with the prime minister al-Sudani, and they agreed on something. What do you think it was? Folks, you can’t keep promising the citizens the revaluation and the currency reform for too long without delivering on promises. Yes, the people are getting angry over it in Iraq. They have a champion to fight for them and it’s the cleric Al-Sadar. Get it? The pressure was exerted.
So, now I want to reiterate again, that within Iraq the value of the dinar is not going to change. – ” The process of deleting prices is psychological, as the commodity worth a thousand dinars will be worth one dinar and remain at the same value.” Then they even gave us an example just to be clear and I quote “That is, when you sell a house for 100 million, it will be sold for 100 thousand.” Yes just drop the 3 zeros. Get it?
No one in Iraq is going to get rich off this swap out. Get it? There will be no huge lines of people at the Iraqi banks to exchange currency with a gleam in their eyes of being millionaires. Get it? This is reason too for the effort to digitize. So when we exchange, OUTSIDE of Iraq, we exchange our dinar we will get the rate of exchange for our OWN COUNTRY according to the exchange rate. Get it? In the USA it will be dinars for US dollars since we use dollars in the US. Get it? In Canada you will exchange dinars for Canadian Dollars not US dollars unless you ask for US dollars but they most likely will only exchange to Canadian dollars and NOT US dollars. The banks are going to be VERY strict on this. For another example, the same applies in Europe under the EU. You will exchange dinars for Euros not US Dollars. You will get the Euro rate not the US dollar rate. I hope this is all very clear to everyone. What you do after the initial exchange is your own business.
I also feel a need to add, that we need clarification of what “digital” means to the Iraqi currency reform. So, about a year ago the CBI very specifically told us that they DO NOT plan to go to a digital currency. Using electronic banking and electronic banking inclusion effort is not going to a digital currency, it simply is using debit cards to access your money in the bank account. Get it? NO Central Bank Digital Tokens. The CBI at that time also told us they clearly intend to keep paper and coinage currency in circulation. Also, why would they just do a massive effort to install thousands of ATM machines throughout Iraq if this was not the case. Also, why would they print and stamp coinage (the newer lower denominations) if this was not the case.
“According to the latest data, the Central Bank of Iraq’s foreign reserves cover 83.62% of the broad money supply, which covers the cost of importing 15 months, while the global standard rate is 20%, covering 6 months of importing”. they reduce the money supply by almost 2/3, as they say they are going to do as a byproduct of the Project to Delete the Zeros, they won’t they have 100% coverage of the broad money supply by their foreign reserves? this goes way beyond and surpasses what is required for sustainability and safeguards for any economy. Get it? Read it! This is huge and most don’t realize the potential of what they are planning and what they just told us. But to get there is a slow process. We are about to see a harvest, the benefits of the plan.
I want to point out one more article titled “WHAT DOES IT MEAN TO REDUCE DEPENDENCE ON THE DOLLAR AND REMOVE ZEROS FROM THE DINAR?” My CBI contact told me to expect this article soon and so here it is. It is one of the CBI educational articles put together by the committee. It is part of the education for the citizens but only the beginning.
