Sah A parliamentarian announces new measures from the Central Bank to reduce the dollar exchange rate Member of Parliament Baqir Kazim revealed on Saturday the new measures taken by the Central Bank in order to reduce the exchange rate in the local markets, while stressing that the rise in the price of the dollar will decline within a month from now.
Kazem said that “the Central Bank is working to form a new credit department to import goods in order to control the parties that used to monopolize the dollar in the local markets,” noting that “these measures came after the exacerbation of smuggling operations in the previous period, which led to the rise that is happening now.”
He continued, “The rise in the exchange rate these days will not last more than a month after the new procedures that are being implemented by the Central Bank,” noting that “the latter will work to sell the dollar to traders in the department of new credits and at subsidized prices directly.”
He noted that “the reason for the rise is that many traders transfer millions of dollars to banks and fake companies working to smuggle it out of Iraq,” stressing that “the exchange rate after the new measures will settle on 146 thousand Iraqi dinars for 100 dollars.”
The Prime Minister called for “opening the file of currency auction, exchange rate and the state of chaos in the markets within the agenda of the next Cabinet meeting and taking immediate and urgent measures to address this file, which has become an intolerable door from the doors of corruption and waste of public money.”
The Finance Committee in the House of Representatives attributed earlier the reasons for the rise in the price of the dollar against the Iraqi dinar to the pressure exerted by the US Federal Reserve on the Central Bank of Iraq. https://khabaar.press/archives/106158
Sah “Electronic platform” and international oversight of corruption. The secret of the rise in the dollar exchange in Iraq
Several weeks ago, the Iraqi market recorded a rise in the exchange rates of the dollar against the dinar, to unprecedented levels, which the Central Bank of Iraq attributes to several factors, most notably the start of work on an “electronic platform”.
Although the dollar exchange rate is officially set at 1,460 Iraqi dinars, the current rates are about 1,545 dinars to the dollar.
The Iraqi Central Bank described in a statement, Thursday, the rise as “simple”, while the office of Prime Minister Mohammed Shia al-Sudani, in a separate statement, said that the rise in the exchange rate “is temporary”, stressing that Iraq’s financial situation is at its best.
The Central Bank of Iraq had devalued the dinar in December 2020 from 1182 dinars against the dollar, to 1460 dinars, in a move aimed at compensating for the decline in oil revenues at the time.
In statements to Alhurra, Iraqi economists questioned the justifications of the Iraqi Central Bank, pointing to fears that the exchange rate may continue to increase during the coming period, which may mean that Iraq will enter a new phase of inflation, especially with its dependence on imports “in everything.” Although “Iraq’s financial situation is at good levels,” experts point out that what was known as the “theft of the century” had consequences that affected the movement of liquidity and remittances, and prompted an “unjustified” increase in exchange rates.
Iraqi authorities exposed the “theft of the century” after an internal audit by the Finance Ministry showed fraud of about 3.7 trillion Iraqi dinars ($2.5 billion).
Sah “Not a few levels”
The Iraqi economist, Mahmoud Dagher, said that “exchange rates in Iraq have reached levels not few, according to official statements, as they reached levels of 1545 dinars to the dollar of remittances instead of 1460 dinars as specified by the Central Bank, and 1504 dinars to the dollar cash.”
Dagher, a former official in the Central Bank of Iraq, told Alhurra that “the reasons for the rise in exchange rates are not due to poor coverage in meeting the needs of the local market, but rather because of technical conditions that caused confusion in the arrival of remittances to their destination.”
He pointed out that “the controls imposed by the US Federal Reserve should have been paid attention to by the Iraqi Central Bank and the request that they be implemented gradually, so as not to create problems in the Iraqi market.”
MP Jamal Kojar, a member of the Finance Committee in the Iraqi parliament, explained that “the US Federal Reserve had taken special decisions after the issue of money smuggling and corruption of some banks in Iraq, as seven banks were excluded from participating in currency auctions, and a greater emphasis was imposed on remittances that were not subject to any audit.”
He added in response to inquiries by Alhurra that there is “a loss of confidence and control in the Central Bank of Iraq, which caused the prosperity of the parallel exchange market to create a black market that benefits individuals who control prices amid the lack of intervention to prevent such practices.”
According to a statement by the Central Bank of Iraq, a source said that one of the reasons for the rise in exchange rates is “building an electronic platform through which banks raise their customers’ requests, which the Central Bank began months ago to build in coordination with international bodies for the purpose of provisions and regulating the operations of the sale and purchase of foreign currency and ensuring the effectiveness of control over them.”
Sah “A specialized international company has been commissioned to build it and link banks with the central bank through it, and the platform requires providing information on customers requesting transfers, beneficiaries and correspondent banks,” he added.
“Due to the novelty of using this platform, many errors are being discovered and require the bank to reload them, and these procedures take additional time to accept the application and pass it through the global financial system.”
The academic, Iraqi economist Abdul Rahman al-Mashhadani, said that “the statement of the Central Bank is not convincing, there may be confusion in dealing with a new electronic platform, but this matter should not cause confusion that raises exchange rates to record levels.
” Al-Mashhadani believes in a telephone interview with Alhurra that what is happening now is due to the fact that “the US Federal Reserve imposed amendments to the SWIFT remittance procedures, which include an audit of the source of funds until the final future, which came after the consequences of the theft of the century, which revealed schemes to smuggle money.”
“Four banks that accounted for about 40 percent of the sales of the currency auction window were excluded and punished, and this caused a shortage of foreign currency for some dealers dependent on these banks, which prompted them to rely on the parallel market,” al-Mashhadani said, noting that this does not “mean that there is a dilemma of dollar scarcity at the Iraqi Central Bank, whose reserves of this currency exceed more than $ 90 billion.
” The Central Bank of Iraq confirmed in its statement that the reserves “and the solvency of the state in general are in excellent condition and at their best levels in decades, and that the current supply of foreign currency is not linked to resources, but to administrative and auditing procedures.”
Sah The adviser to the Central Bank of Iraq, Ihsan Shamran Al-Yasiri, had explained in remarks quoted by the Iraqi News Agency “INA” on Wednesday the mechanism of work of the foreign currency sales platform, and said, “The Central Bank recently created a platform for the currency sale window to which licensed banks raise requests to buy in the name of people and the names are considered over a week and the bank decides its position a day before the date of the auction of the sale of currency submitted for purchase after applying conditions that include people submitting requests to buy dollars to licensed banks
The name of the seller and the name of the person requesting the purchase must be proved, and the name of the person requesting the purchase must be mentioned, and the name is entered into a global system called (OFAC) to indicate whether it is required or problematic, as well as communicating with the seller of the imported goods to verify its dealings with the person requesting the purchase of the dollar.
He added that “the US Federal Reserve has set strict conditions recently obliging us to display lists of dollars sold to it that include the names of people and beneficiaries, and wait 15 days to state its position on the integrity of the purchase process to the requesting party, and the sale process stops if the Federal Bank objects to a specific name because it is required, there is a similarity of names, or there is a suspicion of the purpose of buying the dollar.”
Sah Al-Yasiri revealed that “the US Federal Reserve is in the process of adding 3 supervisory bodies to the sale of the dollar to check its destination after the sale, and they say that they are checking to prevent its access to terrorist or banned parties, and because of these conditions and limitations, the Central Bank cannot provide dollars to all those who request it,
what happens crowding and we are obligated and in the interest of Iraq to apply these standards to prevent a decision to stop the flow of dollars to Iraq because it will cause a disaster and the sale of dollars in Iraq is subject to strict control from the US Federal Reserve because it is the issuer to the dollar.”
Avoiding an exchange rate crisis The Iraqi Central Bank identified a few measures to push for the stability of exchange rates, including “expanding the foreign exchange supply to meet the public’s demand for cash dollars, and the window management was directed to meet the requests of banks for the coming days faster by implementing double requests, and a preferential rate was given for the implementation of documentary credits, and for the purpose of covering local demand.”
The head of the Iraqi Economic Council, Ibrahim al-Baghdadi, expressed his support for the measures of the “Central Bank of Iraq”, and said that “the application of any new system may cause a defect, and that the imposition of strict decisions from the US Federal Reserve confused monetary policy in Iraq.
” Al-Baghdadi called in an interview with Alhurra to “coordinate more between the US Federal Reserve and the Central Bank of Iraq, so that the Iraqi economy is not affected, and in the end the burden will be borne by the citizen who suffers from erosion in income.”
The Iraqi economy “is directly affected by any exchange rate hike, especially since the country’s production depends on inputs imported entirely from outside the country”, he said.
Sah Economist Dagher agrees with this view, explaining that “the continued rise in the exchange rate will make the Iraqi citizen face additional burdens, especially since the biggest problem is related to the exchange rate of the remittance dollar, especially since Iraq imports everything from abroad.”
MP Kojar identified the repercussions of the exchange rate increase on the Iraqi economy with “four effects”: first, the increase in costs for the Iraqi citizen and high inflation, second, confusion in the local Iraqi market, third, the fear of investors and employers in the private sector from developing their investment plans for the coming period, especially since they depend on imports of goods that are paid in foreign currency, and fourth, the continued rise may lead the Iraqi economy to recession due to uncertainty amid the lack of convincing answers from the official authorities.
Koger called for greater coordination between fiscal and monetary policy in the country, explaining that this does not mean “interference in the powers of the central bank, whether by deputies or politicians who rely in their directives on the interest of the parties they represent,” and added that “it is necessary not to exploit what is happening to raise electoral slogans to satisfy party bases.”
The Iraqi Prime Minister, Mohammed Shia al-Sudani, had confirmed in early November that “changing the exchange rate of the Iraqi dinar against the dollar is the prerogative of the Central Bank, and we are committed to implementing what the Central Bank sees,” which some considered a retreat from previous promises and positions to reduce the exchange rate.
Sah Economist Al-Mashhadani praises the idea of leaving it to the Central Bank of Iraq, noting that “the law of the Central Bank determines the authority to formulate monetary policy in the bank only, but this does not prevent coordination with the country’s fiscal policy makers.”
The government affirmed in a statement Thursday “its commitment to maintaining the stability of the local market, by supporting the stability of the exchange rate of the dollar against the Iraqi dinar, and it supports the steps of the Central Bank in this regard.”
The Iraqi government called on “all dealers, including investors and traders, to cooperate with banks and the Central Bank by working in accordance with the commercial contexts in force globally, and importing under documentary credits, as they provide a guarantee for the importer, preserve his rights, insure imported goods, and enable him to benefit from banking facilities to cover the value of the credit.”
The IMF said in a statement on December 7 to enhance financial stability, accelerate the implementation of basic banking systems, and embark on restructuring major government banks as a very important priority.
At the time, the IMF announced that it supports the central bank’s efforts to strengthen transaction control through foreign exchange auctions, its plans to explore alternative trade financing mechanisms to facilitate it, and recommends the development of liquidity management tools to support better exchange rate stability. Moaz Freihat
Sah The Yazidi representative of the Kurdistan Democratic Party, Mahma Khalil Ali Agha, called today, Sunday, Prime Minister Muhammad al-Sudani to start implementing Article 140 of the Iraqi constitution, according to what was stated in his government program that he presented to the political forces.
Ali Agha said, in a statement, that the application of Article 140 of the constitution solves the problems accumulated for more than 60 years, and it represents a legitimate right to restore the usurped rights of citizens living in the areas covered by this article, noting that “the Iraqi constitution draws a road map to solve this article.” Despite attempts by some of those who do not respect the constitution and people’s rights to target this article.
He added, “The Iraqi citizens living in the areas covered by this article have been subjected to injustice and marginalization since the change of the monarchy until the present day, especially at the time of the defunct regime, but the articles of the constitution remain and the road map for the return of rights remains, in order to recover these usurped rights.
” “The Federal Court issued a binding decision for all, that Article 140 remains and that the issue of restoring rights is a national legal duty, and this matter is accomplished through the completion of the three phases of Article (normalization – census – population census)”.
The prestige of the state and its institutions and gives a distorted and defective internal and external message, so respecting the will of the people and their constitutional right is within the ministerial program of Mr. Sudanese.
Sah Agha: Al-Sudani called for the formation of a temporary parliamentary committee to consider the issues of Article 140 in order to obtain rights and pay the dues of citizens in the covered areas and to revive, renew and grant the powers of the old committees formed to look into files, indicating, “The citizens of this article are the most harmful people from ISIS and from corruption and injustice of the defunct regime.” https://www.ninanews.com/Website/News/Details?key=1020979
Sah Dave It was a great World cup.
Sah Dave We are thawing out over here. Ice everywhere by evening. Not warm enough during day to melt much.
Dave Sah we got 5 inches this morning…..almost gone now…..
butterfly I want to wish everyone a very happy holiday season. May all of your dreams come true.
Sah Dave We got 8 feet last week on top of 4 feet, so it is everywhere and not melting much except to cause black ice at night.
butterfly Dreams do come true, so keep dreaming folks. Remember to send love to all those you know. I am out of here, so many great articles are happening. Keep smiling.
Sah @butterfly Happy Holidays to you also and a great and prosperous New Year.!
butterfly Sah back at ya girl!
Dave Sirius radio werks fer me….
Dave butterfly articles?
Dave read today all those articles regarding exchange rates and corruption
Dave article 140 reared its head today
butterfly Now I have to exit. Have a great holiday folks.
Sah butterfly You have a great holiday also.
Dave butterfly but read just the other day taht Iraq’s Council of Ministers were unaware of of being out of CH 7
Dave Failed/forgot to sign off on that????
Dave found that interesting……
Dave art 140, exchange rates,.corruption all in a few days yet again, Big skip on this record?
Dave Kap has not Skipped a beat….
Dave 14 yrs……ouch!
Sah Dave They could not sign off because Kuwait was still collecting, and Iraq said they over paid. The IMF did an audit and found out Iraq over paid and Kuwait had to pay them back 8 million dollars, just this past few weeks ago. They reported to UN and they are signing of now on Chapter 7.
Dave no Global nodda while under Ch7
Sah Dave Hopefully there are not anymore cliches to their signing off.
Dave WE be Chatting about IRAQ!!! LOLK
Sah If it is signed off, they can petition for Article 8 to become international.
Dave Passing those foreign banking laws would be a biggy fer me
Sah Have to check and see what is required by IMF to go forward. I am sure they have a list of requirements.
Dave Sah DONE Iraq forgot to sign off…lol
Dave over paid Kuwait …lol
Dave Going Global may not be high on their Agenda presently?
Dave Particularly with All that CHUNKY money
Sah Dave Kuwait would not sign off because they thought Iraq had not paid them everything and Iraq said they did. That is why they did an audit. Iraq did not forget to sign off, Kuwait did because they thought they owed more money.
Dave was some chatter about the WTO……5 mos ago….
Sah They have been monitoring the WTO for a few years on invitation. They cannot join until they have international currency.
Dave Ch 7 stuff from 1 yr ago…..finally figured it out
Dave Sah GO IRAQ!
Dave Ch 7 what a bummer…..
Sah Not there yet but heading in the right direction. Things seem to be coming together a lot faster in their country. I hope it continues. Now if they could just learn to keep their currency stable and not vary off 2 percent.
Dave my broken crystal ball tells me he closer we get the more the Kurds w2ill moan
Dave 2% compliance with rate changes…..
Dave whippy we now at 1500.00 fom 1186
Sah They changed the rate last year and devalued their currency to be able to pay their employees. When oil went up, they had more money to pay but did not change rate back because IMF said you cannot just claim rate and devalue and change it and now want it back.
Since then they are not doing a good job of maintaining their rate which they need to get their act together. The currency auctions can help them maintain their rate, so they are going to liquidate more foreign currency to add value. They are not doing a float right now they are going to control it with the currency auctions.
Sah They need to work on getting this going in the right direction.
Dave Sah Hence the chatter about art 140
Dave Who gets what????
Dave Lots and lots of oil in those disputed territories
Sah Dave The article 140 discussion is not going to happen. The federal court ruled that it was voted on by Kurdistan and not by the Iraq parliament. They are trying to push it through. It needs to be completely redone. It is in favor of Kurdistan and not for Iraq. It is a big mess.
Kurds are taking it to be heard right now to supreme court. They could overrule but they won’t because it is not in favor of the Iraqi people. Kurds keep trying to foist their laws they vote in Kurdistan on all of Iraq with out their approval and say it is the law when the judicial said it is illegal what they did.
Sah I have to go.
In case anyone missed it:
Zig Kaperoni (NORV–) did a conference call with Enorrste… the details are at https://dinaralert.webs.com/conferencecalls.htm where his calls are archived….the call will be recorded and the recording link will be posted there….Details below:
DinarAlert Year-End Conference Call – Saturday December 10th 2022 6pm PT, 7pm MT, 8pm CT, 9pm ET
Enorrste and Kaperoni will host a DinarAlert year-end conference call Saturday December 10th, 2022 to wrap up the latest developments.
Focus of this call will discuss the new Iraqi government, economic and banking developments. Q & A included. Join us at: 971-224-6616 Access code #807157
Zig: If you access this chat via https://my.cbox.ws/ZIGPLACE
Zig: You can make the box much bigger by clicking this link ZIGPLACE – Cbox