Tishwash: Sales of the Central Bank of Iraq.. Continuous smuggling and permanent profits
Despite its slight decrease for a day or two, it is rising again. The Central Bank of Iraq’s sales of hard currency in its auction for buying and selling the dollar are still high in numbers, measurements and comparisons, until it almost touched the barrier of a quarter of a billion dollars within 24 hours, as sales rose in one day to About 147 million dollars.
During and after changing the exchange rate of the dollar against the dinar, there was talk about the attempts of the Ministry of Finance, the Central Bank and the government behind them to stop the smuggling of the dollar out of Iraq through the auction, by raising the exchange rate and thus reducing sales during the auction.
But the case was not as mentioned, as the Central Bank’s sales in five sessions in one week approached one billion dollars.
By looking at the results of the currency sale window in the last two days of the week, it indicates the vast difference in sales between foreign remittances and cash sales, as the Central Bank sold, during a session on Wednesday, June 23, about $235 million in total, distributed to more than $204 million for the purposes of strengthening balances in abroad as transfers and credits, and only about 31 million in cash sales.
On the following day, Thursday, June 24, 2021, for comparison, the Central Bank sold more than 216 million dollars, about 198 million dollars went for the purposes of strengthening balances abroad, while the total cash sale to banks and exchange companies was about 19 million dollars.
Notably, the coin sale auction has seen in earlier times a match between sales for the purposes of strengthening balances abroad and total sales, meaning that cash sales were ‘zero’.
A member of the Parliamentary Finance Committee, Ahmed Rashid, says that “the rise in the price of the dollar against the dinar contributed to reducing the fiscal deficit in the budget, but it failed to limit the smuggling of hard currency abroad, in parallel with the government’s failure to control the markets and prevent the rise in the prices of goods and merchandise.”
The economic researcher, Jalil al-Lami, also describes the significant increase in the sales of the Central Bank of Iraq as a “smuggling of hard currency,” and indicates in a television statement, followed by “Ultra Iraq,” that sales “did not exceed 160 million dollars throughout the year 2020,” that is, before the dollar exchange rate was raised. In order to reduce sales.
Reasons for height
Two main reasons for the recent rise in central bank sales, the first is that citizens resort to storing the dollar in their homes for fear of the collapse of the Iraqi dinar, according to a member of the Parliamentary Finance Committee Ahmed Rashid, who indicates that the second reason is “the continued smuggling of hard currency as well as the removal of the dollar from Iraq.” to import merchandise and merchandise.
Politicians and experts talk about the gains of political parties from raising the exchange rate of the dollar, with Iraq losing nearly six billion dollars during the change in the exchange rate, which went to the beneficiaries, according to a member of the Parliamentary Economic Committee Hamid Al-Moussawi, who said in a television statement, followed by “Ultra Iraq” that the bank’s sales remain The central bank in this high form “will branch Iraq’s reserves of the dollar,” which is what external parties want, according to him.
The Central Bank recently injected more foreign currency into the market, and the Parliamentary Finance Committee spoke of $3 billion for the purpose of “controlling the markets and rising the currency,” while MP Al-Moussawi returned the step to “public and media pressure” on the Central Bank.
At a time when the difference in the price of selling the dollar between the central bank and local markets was about 110 dinars per dollar, the profit was equal to 25 billion dinars per day, according to the accounts of a member of the Parliamentary Finance Committee, Muhammad Sahib Al-Daraji, at the end of the year 2020.
An informed source, who asked not to be named, told “Ultra Iraq” that several parties, including politicians, have invested the difference between the bank’s price and the markets resulting from the high price in exchange and the Central Bank’s continued selling of it close to 1,190 dinars, in the period between waving and declaring a change in the exchange rate and between fixing and raising it in practice.
In June 2021, the difference between the exchange rate approved by the Central Bank of Iraq in its sales, which is 1460 dinars per dollar, and the selling price approved in the local markets, which is 1500 dinars per dollar as an average, the difference reached 40 dinars.
Relying on these accounts at that time, and measuring sales and differences now, at a sales rate of $240 million per day, the profits continue despite their decline after the difference between the bank’s price and the markets diminished, so that the profit per day is approximately 10 billion dinars, meaning that the parties that stand Behind the banks and companies, and according to the current selling rate and at a higher exchange rate than the official one, she earns more than $200 million per month. link