Iraqi News

Iraqi News Highlights Sunday Afternoon 4-2-23

Tlm724 Administrator Bondlady’s Corner

Reserve Currencies To The Dollar As A Store Of Value And As Secondary Reserves In Central Banks

Aqil Jabr Ali   It is very important to keep abreast of changes and developments in the global economy and economic applications and practices, especially the trend towards economic pluralism and the transition from the dollar to reserve currencies for bilateral or intra-exchange between countries with whom we have a large volume of trade exchange in light of the sustainability of the rentier oil exports in US dollars and the possibility of benefiting from the experience of Brazil and China And Saudi Arabia, Egypt, the BRICS group and some African and Arab countries regarding dealing in currencies in local or reserve currencies instead of the US dollar and the gains of systematic transformation in the system of financial payments to economic diversification and the importance of that specifically for Iraq at the level of economic diversification and the systematic and transitional shift in the financial payments system in a tangible way from the rentier economy to the rentier economy The Iraqi national economy diversification model.

Undoubtedly, there is a debate about the role of the reserve currencies, the yuan, the euro, the ruble, and others for dealing in non-dollar currencies or inter-state dealings with currencies that cross the dollar and has been going on for a long time. The concept of reserve currency is linked to the role that the pound sterling played in the global economy from the end of the nineteenth century to the mid-twentieth century.

The main function of the reserve currency is to facilitate the international exchange of goods and services by solving the problem of coordinating transactions in the foreign exchange market and reducing transaction costs in foreign trade operations. In addition, reserve currencies are used as a store of value and are held as reserves by the central banks of most countries in the world.

Performing this function led to the emergence of the term “reserve or secondary currency”.

The demand for reserve currencies is made by economic or financial agents operating in all areas of the global economy.

In a way that depends on the functions that reserve currencies perform in international transactions. The amount of demand and therefore the degree/volume of use of the reserve currency is determined by how well each of the main functions is performed. As a result, the effect of this begins to work, when the use of the reserve currency by a large number of economic agents becomes a factor that increases the demand for the reserve currency.

There are factors and methodological foundations for the formation of reserve currencies, including the Chinese yuan, the Russian ruble, the Iranian riyal, and others, which necessitates the development of the foundations of the currency system and the methodological and objective foundations for that, and making recommendations regarding its more balanced organization, and identifying factors that can improve the status of the Chinese yuan, the Russian ruble, the European euro and others as a reserve currency Regional. And the importance of dealing with a balance between Iraq’s oil exports in US dollars now with gas in the future and balances with the trade balance and the volume of trade and economic exchanges with other countries.

Thus, the main tasks of the work are:

  • Finding a specific definition of the concept of reserve currency, as well as the main functions that reserve currencies perform.
  • Reviewing the main theoretical models of demand for reserve currencies.
  • Analyzing the results of empirical studies of demand factors for reserve currencies.
  • It is very important to get acquainted with the concept of the regional reserve currency and to identify the factors that affect the formation of the regional reserve currencies.
  • Develop recommendations to enhance the role of the Chinese yuan, the Russian ruble, the European euro and the Iranian riyal in international trade to achieve the status of the regional reserve currency and facilitate international trade procedures, imports and exports.

The work will be in an organized and sober work methodology as follows:

First: Finding a clear definition and concept of the reserve currency in the Central Bank of Iraq law, describing the main functions that reserve currencies perform, and analyzing the advantages and disadvantages of owning a reserve currency. It should also contain, in an independent study or analysis, an overview of the main theoretical models of reserve currencies, taking into account that the methods and results of empirical assessments of the factors affecting the demand for reserve currencies such as Greece, the euro, the ruble, the riyal, and others, are dealt with and analyzed.

The third deals with the concept of a regional reserve currency and provides an empirical analysis of the role of regional reserve currencies.

The fourth is recommendations to raise the status of the Chinese yuan, the Russian ruble, the European euro, the Iranian riyal, and others, according to the momentum, intensity, and priority of trade and economic exchanges, and to form a regional reserve currency on its basis.

Central Bank: Gradual decline of the dollar in the parallel market

Posted On2023-04-02 By Sotaliraq   The Central Bank spoke of a gradual decline in the exchange rate of the dollar in the parallel market, stressing that it is not possible to open a direct window to citizens.

And the assistant general manager of the investment department in the bank, Muhammad Yunus, said in a statement to the official news agency, followed by (Al-Mada), that “all financial transfers are followed up and monitored by the Central Bank of Iraq through the electronic platform and the cash sale platform.”

Yunus added, “These operations come within the international standards for combating money laundering and terrorist financing, and are compatible with all international norms and laws.”

He pointed out, “These operations do not affect the reputation of Iraq, the Central Bank and financial institutions in the event of any defect in those transfers.”

Younes explained, “The accepted transfers started to increase continuously, and we expect the Central Bank to reach very high levels.”

Concerning the daily conversion rate of foreign currencies, Younis confirmed that “the bank publishes daily its cash sales and transfers, which currently range between 100 to 150 million dollars, in addition to cash sales,” expecting “an increase in transfers in the coming days.”

Regarding the possibility of the dollar exchange rate returning to its previous price, Younis indicated that “the parallel rate has begun to gradually decrease on a daily basis during the past days,” noting that “the Central Bank is working hard to solve all the problems that banks and merchants suffer from in the process of financial transfer.”

Regarding the possibility of opening a window to sell the dollar to citizens with specific numbers per month, Yunus explained that “the dollar cannot be available to any citizen, given that it is not a national currency for Iraq,” noting that “the dollar must be allocated for dealing outside Iraq for the purposes of financing trade, travel, treatment and study.”

Yunus went on to say that “opening a window to sell dollars to citizens violates all international regulations and norms.”

For his part, the Deputy Governor of the Central Bank, Ammar Hamad Khalaf, said in a televised statement followed by (Al-Mada): “The Central Bank has taken several measures to reduce the price of the dollar, especially through the three packages that it launched at the beginning of this year, which were sufficient to address the high exchange rate in the market.” Parallel.”

Khalaf added, “The bank met with the Federation of Iraqi Chambers of Commerce and a number of merchants to discuss the challenges and develop mechanisms to address them,” suggesting “the issuance of new packages to address all the challenges facing merchants to facilitate their access to foreign currencies.”

Khalaf explained the gradual decline in the price of the dollar during the past week by increasing the “volume of sales of the central bank,” noting that “the bank liberated restrictions on sales, and the bank can sell any amount of dollars as long as there is a real demand for dollars,” explaining that “the difference between my price Official and parallel exchange will gradually disappear.

Khalaf pointed out, “Iraq does not need to establish new banks at the present time or in the future, but rather activate the existing banks,” pointing to “the presence of more than 70 governmental and private banks,” noting that “the Central Bank is serious about sorting good banks from not good ones.” “.

Khalaf pointed out, “There is a great response by banks to the instructions of the Central Bank regarding the official exchange rate,” calling at the same time to facilitate “the procedures for merchants’ transactions quickly.”    LINK

Central Bank Sales Of The Dollar In Today’s Auction

Economy| 11:44 – 02/04/2023   Baghdad – Mawazine News   The Central Bank’s sales of dollars in an auction today, Sunday, recorded more than 236 million dollars.

Al-Khazraji Calls For Reviving “Made In Iraq” And Revitalizing Factories

Sunday 02, April 2023 15:43 | Economical Number of readings: 162  Baghdad / NINA / – A member of the Oil and Energy Parliamentary Committee for the State of Law Coalition, Muhannad Al-Khazraji, called for reviving “Made in Iraq” by reviving idle factories and liberating them from the rentier economy.

Al-Khazraji said in a statement, “Industry is the backbone of life, and through it, countries can liberate themselves from the unilateral rentier economy, and build a sober multi-economy that does not depend on fluctuations in oil prices.”

He added that “the previous governments did not move to revive the idled factories, and the current government must breathe life into them gradually.”

Representative Al-Khazraji stressed “the necessity of reviving ‘Made in Iraq’, and leaving dependence on the importer, which contributes to the loss of hard currency and damage to the country’s economy./ End 7

Iraq Discusses With The International Monetary Fund To Support Its Financial Plans

Baghdad/ National News Center  On Thursday, Prime Minister Mohamed Shi’a Al -Sudani discussed with the residing representative of the International Monetary Fund in Iraq, Ghazi Shabikat, cooperation in supporting policies and financial plans for Iraq.

The Media Office of the Prime Minister said in a statement received by the National News Center / that “Prime Minister Muhammad Sha’a Al -Sudani met today, the resident representative of the International Monetary Fund in Iraq, Ghazi Shabikat.”  The statement added,

“During the meeting, Iraq’s relationship with the International Monetary Fund was discussed and cooperation in the field of supporting policies and financial plans, in a way that contributes to achieving the stability of the Iraqi economy.”  The statement continued,

“The meeting witnessed the discussion of the importance of the financial and administrative reforms adopted by the government, and assigning its efforts to fight corruption.”

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