Saturday Morning Iraq Economic News Highlights 3-4-23
Al-Rafidain Begins Depositing The Iraqi Dinar And Handing Over The Dollar
AM:09:11:03/03/2023 8036 views Al-Rafidain Bank announced, today, Friday, that it has started procedures for expanding the Iraqi dinar deposit outlets for travelers through the electronic platform, as of Sunday. And the bank’s media stated in a statement that NRT Arabia received a copy of it, that “the procedures for expanding the outlets for depositing the Iraqi dinar for travelers through the electronic platform will be initiated, starting on Sunday, through a number of Baghdad branches designated for that.”
The statement added, “After depositing the amount in dinars, the dollar currency will be received exclusively from the bank’s outlet at Baghdad International Airport.”
And he explained, “The branches in which the dinar will be deposited are (Palestine Street Branch – Firdous Square – Arboretum – Officers’ House – Al Mohit – Al Rafi’i – Al Marefa).”
Earlier, the Rafidain Bank announced a package of measures to expand the outlets for depositing the Iraqi dinar and selling the dollar to travelers through the electronic platform of the Central Bank of Iraq.
The bank’s media office said in a statement, “Travellers, starting next Sunday, must review the designated branches in Baghdad, which are (Palestine Street – Firdaus Square – Al-Wahda neighborhood – Officers’ Floor – Arab neighborhood – Al-Moheet – Al-Rafi’i).”
And he stated, “For the purpose of depositing and delivering cash amounts in those branches, along with bringing the official documents, which are (a valid passport, travel ticket, and visa required by the electronic platform, within a period of three days or less, prior to the date of travel indicated on the ticket.”
He pointed out, “The traveler receives the value of the amount that was deposited with the card in dollars from the airport outlet exclusively.” N.A. https://www.nrttv.com/ar/detail3/10836
Sudanese Advisor Explains The Size Of Iraq’s Reserves Of Foreign Currency And Monetary Gold
Economy 19:12 – 2023-02-28 Today, Tuesday, the financial advisor to the Prime Minister, Mazhar Muhammad Salih, clarified the size of Iraq’s reserves of foreign currency and monetary gold, and while he indicated that the management of foreign reserves is subject to international standard investment guides, he clarified the mechanism for recovering looted and frozen funds outside Iraq.
Salih said, in a press interview, that “Iraq’s foreign currency reserves have reached their highest levels in Iraq’s financial history and have now touched $115 billion,” stressing that “the monetary authority in Iraq has high efficiency in managing reserves.”
He added, “The coverage of reserves from foreign exchange to the exported national currency amounts to approximately 150%, which is a very high percentage and represents optimal efficiency in reserves management standards, in addition to covering the external debt that is obligatory to pay Iraq by about five times.”
He stated, “Nearly half of the amount of reserves is in the currency of the United States of America (US dollar), and a high percentage of the country’s dollar reserves is being invested in safe financial instruments, most of which are short-term United States Treasury bonds, which carry interest of more than 4% annually, currently on average, and have a very advanced credit rating.” And it can be converted into liquid dollars immediately, when needed.
And he stated, “The management of foreign reserves is all subject to international standard investment guides issued by multilateral international financial institutions, within the framework of managing an optimal investment portfolio that avoids risks, the most important of which is avoiding legal risks and the risks of fluctuations in exchange rates, interest rates and other operational risks.”
He continued by saying: “The rest of the remaining foreign reserves, which are 50% (except for the dollar), are deposited with reliable European global central banks and a global monetary institution, and in currencies such as the pound sterling, the European euro, the Chinese yuan, the Japanese yen, and the currency of the International Monetary Fund called special drawing rights units, in addition to gold.” Cash in excess of 132 tons of gold or more as officially declared and deposited in safe global gold vaults.
He pointed out, “There are reinforcements in foreign exchange for Iraqi private banks in US dollars, and they take place through the window of the Central Bank of Iraq and the current compliance platform, and are deposited with private bank correspondents in banks abroad, and they are intended to cover documentary credits or documentary transfers for the purposes of financing private trade in goods.”
and services, as well as payment of electronic payment card dues, in addition to the deposits of the Iraqi Trade Bank with its correspondents, which is concerned with opening external credits to finance foreign trade for government imports.
He continued, “All of these external deposits are moving balances, and their average is no less than $12-15 billion.”
At the same time, regarding the frozen Iraqi funds, he indicated that “the pursuit of the Iraqi state’s funds that date back to the time of the former regime or the operations of encroaching on public money as a result of corruption after the year 2003 are all subject to the provisions of Law No. 7 of 2019, which is the amended money recovery fund law that is currently administered.” From a board of directors headed by the head of the National Integrity Commission, which takes recovery decisions according to legal and administrative work mechanisms, in cooperation with the state’s oversight agencies.
He explained, “The fund’s management is responsible for providing the House of Representatives with periodic reports on its follow-ups in recovering public money, especially outside the country.”
He pointed out, “Article 14 of Law No. 7 of 2019 obligated the government, when concluding investment or economic agreements with any country that has funds for Iraq, to include the provisions of the Money Recovery Law, including funds that fled after 2003 due to corruption operations.”
Regarding China’s influence on the world economy and the central bank’s decision to finance imports from it in yuan, he explained that “China has contributed to lowering levels of consumer basket prices in the world and has led price stability in the world during the last two decades, due to its high competition and the invasion of its goods into world markets at low prices, generating movement It is called (disinflation or moderation of growth in prices around the world).
He added, however, by saying: “China is still the subject of a complaint and dispute before the World Trade Organization due to its fierce competition, which has reached the point of commodity dumping, which has caused a drop in prices globally to indicate whether it is a result of the efficiency of the Chinese economy or as a result of the devaluation of the Chinese currency to the extent that its goods invaded the world’s markets.” He noted that “equipment from the Chinese market is still the cheapest compared to other world markets.” https://kirkuktv.net/AR/Details/13567
A Government Comment About The Continued Rise In The Price Of The Dollar Despite The Decisions And Procedures
Shafaq News/ Mazhar Muhammad Salih, the financial and economic advisor to the Iraqi Prime Minister, commented today, Saturday, on the continuing rise in the exchange rate of the dollar in the local market, despite all decisions and measures by the government and the central bank.
Saleh told Shafaq News agency, “Transfers in foreign currency related to financing the current account of the balance of payments, and I mean (trade in goods and services specifically), are still not sufficiently adapted, either by some banks or by their importing customers, to the controls of the compliance platform and the new mechanisms for external transfer, with the same effect.”
High governance and fast enough, especially after the dealers got used to the external transfer (banks and individuals) and for nearly twenty years of liberal use in the external transfer by merging the current account transactions with the capital account of the Iraqi balance of payments, while the compliance platform that oversees the regulation of external transfer transactions has I revealed such an implication in the request for an external transfer.
And he indicated that “the method of financing border trade in cash dollars, to which large patterns of small cross-border trades are accustomed, has also been subject to the same restriction through the compliance platform related to cash dollar sales, which fed border trade exchanges, which the trade pattern used to finance in cash as a primitive but accelerated method in Securing financing for fast-moving consumer goods such as vegetables, fruits and other processed commodities from neighboring countries and through border trade.
He added, “While the available financing controls, many of them cannot be covered by transfers through the mechanisms of the compliance platform for reasons related to the economic boycott or regional tensions and many factors for some of the major neighboring countries exporting and supplying Iraq with these goods, which creates pressure on the parallel exchange market.”
And the financial and economic advisor to the Prime Minister continued, “Despite the foregoing, the procedures related to the flow of capital outside the country have not yet become clear, and its transactions are still rejected (usually) despite the legal availability provided by Article 28 of the Central Bank of Iraq Law No. 56 of 2004, which allows for unconditional soft transfer of external transfer.
Saleh revealed that “the (customary) rejection over the past twenty years has encouraged the phenomenon of capital flight through violations that were committed through import transactions of goods and services, which were represented in two forms of violations, the first: exaggerating the prices of imported materials
and the second, by imposing requests Capital transactions that are not permitted by custom or even legally with current account transactions (and I mean import transactions of goods and services),
that is, without knowing the final beneficiary of the external transfer due to the lack of detection of that merger, which caused problems with global compliance circles in inquiring about the fate of the transferred foreign currency and the beneficiaries thereof. actually”.
The financial and economic advisor to the Prime Minister concluded by saying, “Changing the habits and patterns of importing fast-consumable commodities within compliance controls in our country that imports small and large via border trade requires some time to organize and adapt according to the international compliance system, and that the central bank’s packages that are launched in order to facilitate external transfer.”
It works to stabilize the exchange market, some of which touch the transfers of the financial or capital account from the external transfer within the legal and accepted limits. LINK
The Chinese yuan between acceptance and rejection..and the Iraqi economic arena governs
Saturday 04 March 2023 13:56 | Reports and investigations Number of readings: 66 [rtl]Baghdad / NINA / Report .. Renas Al-Radi: Opinions differed on the Central Bank’s recent decision to use the Chinese currency in Iraqi trade instead of the US dollar, as some described it as positive, while others described it as a “political maneuver” .”
As for the central bank, he stressed that its main goal in issuing such a decision is to maintain the stability of the general monetary and economic situation and to face the risks of fluctuation of the Iraqi dinar exchange rate against the US dollar.
Since the beginning of 2023, the Central Bank of Iraq issued several decisions that would maintain the stability of the general monetary and economic situation and face the risks of fluctuation of the Iraqi dinar exchange rate against the US dollar, in addition to facilitating import and export. Operations by opening new horizons with international banks, including Chinese banks.
Among the decisions of the Iraqi Central Bank is to strengthen the balances of Iraqi banks that have accounts with Chinese banks in Chinese yuan.
And the bank stressed: “The decision requires dealing in the Chinese yuan directly without the mediation of the US dollar in order to facilitate and accelerate financial transactions, and it will reduce import costs and protect against the risks of fluctuating exchange rates inside Iraq.” But some economists have warned against this decision.
Economist Salam Sumaisem described the issue of dealing in the yuan as a “political maneuver” that will not achieve success in the long run.
Sumaisem said in a statement to Nina/, “The success of this decision requires the existence of a common value that takes place on the basis of evaluating the price of oil on which Iraq depends on one hand and the price of the Chinese yuan on the other hand, that is: how much is it equivalent to? He goes forward.
As for the expert in economic affairs, Raad Twij, he warned against using the yuan currency in Iraqi trade with China, saying: “Using the yuan in Iraqi trade with China means, in part, selling Iraqi oil in yuan, and this has caveats in making Iraqi oil revenues, under It governs the monetary policy of the Chinese Central Bank, and the possibilities of manipulating the value of the Chinese yuan in proportion to the interest of the Chinese economy, which may cause losses to Iraq, whether in selling Iraqi oil or in carrying out commodity trade.
Twigg added: “This decision must be cautious and studied carefully and in detail to know the pros and cons, calling for” the use of a cash basket of a group of international currencies that may preserve the value of the Iraqi dinar.
A first step of its kind in Iraq, as part of a package of measures aimed at facilitating access to foreign currencies, while the expert in economic affairs, Safwan Qusay, confirmed: “The Iraqi trade in foreign currencies requires several important things that must be followed for success.”
Qusay said in a statement to / Nina/ That “the Central Bank of Iraq is trying to re-evaluate all monetary policies to control the demand for the dollar in the parallel market by expanding the circle of direct dealings in international currencies, including the Chinese yuan, the European euro, the Japanese yen and the US dollar to facilitate the task of final conversion for the purposes of international trade with the currency of the supplier, especially after if the central bank noticed that the adoption of the fixed price of the dinar against the dollar and the increase in the value of the dollar globally caused the decline of the Chinese yuan in the parallel market,
And therefore traders tended to buy the yuan from the parallel market instead of the official market before the People’s Bank of China (the central) adjusted the official value of the yuan and for more From once during the previous periods, in order to preserve its value , which is linked to the migration of most global currencies towards the US dollar, especially after raising interest rates on the US dollar in addition to the Russian-Ukrainian war.
And he stressed, “Dealing in foreign currencies needs to control the movement of imports by dealing with regular merchants and activating the role of local banks in financial transactions through documentary credits and controlled transfers, which contributes to the consolidation of the Iraqi trade system and thus Expand dealing with international brands and control the movement of imports and attract investment and stop the arrival of the dollar to the sanctioned countries and the survival of Iraq within the US dollar zone.
As for Dergham Muhammad Ali, a specialist in economic affairs, he described the use of the yuan in foreign trade as an unrealistic option, and Iraq may be subject to US economic sanctions that destroy its rentier economy, since Iraqi oil sales are exclusively in the dollar currency and that the area of the yuan currency is very limited globally and does not cover even 10 percent of Iraq imports.
Muhammad Ali said, “The conversion from the dollar to the yuan requires the payment of conversion commissions, and the United States may subject Iraq to economic sanctions that destroy its rentier economy, which is based entirely on imports.”
So far, the features of the central bank’s decision to deal with the Chinese yuan in trade or in the oil sector have not appeared..and the Iraqi citizen is waiting for the best for him to break the recent rise in the dollar exchange rate. /