Samson » July 18th, 2022
Will it be a new nail in the coffin of the dollar? .. The story of the new system for payment via phones that will be launched by ASEAN countries
18th July, 2022
In a move that threatens the dollar’s dominance of international trade, central banks in a number of Southeast Asia have decided to link private payment systems, allowing people to buy goods and services across the region via mobile phones in local currencies, in what may be the beginning of the establishment of an independent financial system. about the dollar in the region.
In a session on the sidelines of the recent G20 finance ministers and central bank governors meeting, Bank Indonesia Central Bank Governor Piri Wargio said that in November, five of the region’s largest economies are set to sign an agreement to integrate their mobile payment network, and payments will be made in local currencies. Without converting via dollars, according to a report by the American Bloomberg Agency.
These countries are Indonesia, Malaysia, the Philippines, Singapore and Thailand, which are members of the ASEAN Community, which includes five other countries: Laos, Brunei, Cambodia, Myanmar and Vietnam. dollars, representing about 3.5% of the world’s economy.
Payments made through the system will use local currency settlements between countries, which means that payments made in Thailand using an Indonesian app will be exchanged directly between the Indonesian rupiah and the Thai baht, bypassing the need for the US dollar as an intermediary, with their plans to expand this system to neighboring countries and pools. other regional.
China has sought with some countries in the region to find a competitor to the International Monetary Fund
And at the end of last month, China announced the establishment of a system to collect cash reserves in Chinese yuan (renminbi). The plan includes the central banks of China and Hong Kong of Beijing and three of the ASEAN countries are Indonesia, Malaysia, Singapore, in addition to Chile from South America.
The Chinese Monetary Fund could pave the way for the Chinese currency to play a key role in the Asia-Pacific region, and it is believed that in the longer term, this Chinese Monetary Fund could be a competitor or alternative to the International Monetary Fund, which is dominated by the dollar, according to the American Business Insider website.
Each country will contribute 15 billion yuan, or about $2.2 billion, to this fund, “and when liquidity is needed, the participating central banks will not only be able to withdraw their contributions, but will also be able to obtain additional financing through a secured liquidity window” to meet market volatility, said the Chinese central bank.
China’s monetary fund could attract more members to join in the future, said Ding Shuang, chief China economist at Standard Chartered Bank.
The policies of the Federal Reserve push the countries of the region to search for a financial system independent of the dollar
These moves come amid growing concern about the dominance of the US dollar, with global investors searching for safe havens, while the US begins to try to tame high inflation by raising interest rates.
In addition to political factors, and the concern of many countries of being subjected to a blockade similar to the Western blockade against Russia and Iran, China and many countries of the world are concerned about the situation of the dollar, which in recent weeks has reached its highest level in 20 years, which has led to efforts to find a financial system independent of the dollar.
The sharp appreciation of the dollar as a result of the US Federal Reserve’s aggressive and unprecedented rate hike for nearly 30 years poses challenges to currencies and central banks around the world.
The whole world, even America’s allies, feel that Washington is exploiting the dollar’s status as a major reserve and trading currency, in a way that only serves its economic goals, as the US Federal Reserve accelerated the tightening of monetary regulations, and launched the process of shrinking the balance sheet in June, which led to fears of launching a recession wave. Inflationary in the whole world, and caused the decline of most of the world’s currencies against the dollar.
Asian economies, already weakened by the COVID-19 pandemic, are taking another blow recently from this situation, which has led to the decline of many currencies. The Philippine peso fell to its lowest level in more than 16 years, while the South Korean won reached its lowest level against The US dollar for nearly 13 years. Other Southeast and South Asian economies have also experienced significant currency depreciation.
The process of connecting mobile payment systems has already begun in the region
Currently, the payment systems in Malaysia, Indonesia and Thailand are already linked, while Singapore is linked to Thailand and the five countries are seeking to add more countries to the proposed mobile payment system.
The central banks participating in this electronic payment system will then seek to connect this network with other regional groupings around the world, introducing the same structure for bank transfers, and eventually even central bank digital currencies.
“This could be a very moving step that we can build on to the rest of the world,” Ravi Menon, managing director of the Singapore Monetary Authority, said at the same session on the Indonesian island of Bali. “It is a public good infrastructure that improves financial inclusion, enhances efficiency and creates new business opportunities for all citizens.”
The region is witnessing an expansion of mobile payments at the expense of banks
Mobile payment wallets have become a vital part of the Southeast Asian consumer landscape, providing financial access to millions of people excluded from the banking system.
The region has a good rate of use of mobile payment systems, compared to a lower percentage of the use of the traditional banking system, in light of the high proportion of rural population and poverty in much of the countries of the region, the use of this technology far exceeds the use of credit cards in the emerging markets in the region.
With online spending on the rise during the COVID-19 pandemic, mobile payment wallets have seen an increase in newly registered users.
The concept of digital wallets has changed, as they are rapidly becoming a front-end interaction channel, enabled by many open and semi-open payment networks. In some cases, they appear as “super apps” or financial giants and hubs for financial communication.
Despite the significant increase in the use of these tools, no Southeast Asian provider has replicated the success of Chinese giants such as Ant, the owner of Alibaba Group, which is a giant in the field of mobile payment and lending applications, an area that has seen rapid expansion in China.
In many Southeast Asian countries, merchants are using mobile apps to receive payments from customers, pay bills, and get credit or loans, especially during COVID-19. People are interacting with these innovations across the region.
In Southeast Asia, more than six out of ten people do not deal with banks, which makes mobile cash transactions a preferred method, and similar to China, the region appears to be moving from direct cash dealing, to dealing via smart phones without standing much in the stage Banks, credit cards.
The first mobile payment system to connect two countries in this region
In April 2021, the Monetary Authority of Singapore (MAS) and the Bank of Thailand (BOT) launched the connection between Singapore’s PayNow and Thailand’s PromptPay in real time (in real time the operator’s order).
This connection is the first of its kind globally, and is the culmination of several years of extensive cooperation between MAS and BOT, payment system operators in both countries, bankers’ associations, and participating banks.
Under the system, customers of participating banks in Singapore and Thailand can transfer funds of up to 1,000 Singapore dollars or 25,000 Thai baht per day across the two countries, using only a mobile phone number. Without the need to fill in information fields such as the recipient’s full name and bank account details, as with normal remittance solutions.
With the dollar’s appreciation against most of the world’s currencies, Southeast Asia, like others, is suffering from the devaluation of its currencies.
There is a need to boost intra-Asia trade, and a stronger dollar may act as a catalyst in which the already emerging global dedollarization push can accelerate.
Meanwhile, supply chains in Asia are rapidly reconfiguring away from the West, with the US role largely weakened by sluggish domestic demand and trade protectionism, China’s Global Times reports.
Also, dispensing with the dollar as a mediator in settlements between commercial transactions between the currencies of the region, leads to reducing the cost of transfers and purchases.
Therefore, the new system has three advantages, direct linkage between mobile payment systems and not using the inflated dollar in its value as an intermediary, and the provision of fees that are paid for the conversion from the buyer’s currency to the dollar and then the seller’s currency.
Such systems greatly reduce the dominance of the dollar over the payment and trade exchange systems in the world, especially as it comes from a region that has a close economic link with China, which seems to be moving gradually towards competing with the dollar, and all of this comes within the framework of what can be described as multilateral efforts to find a system a financial system that is independent of the dollar or even more of a financial system of this type.
One of the problems in the expected system in Southeast Asia is the possibility of significant changes in the prices of local currencies compared to the dollar, which is characterized by relative stability, but in general the currencies of these countries are closely related to each other, which means that if one of them decreases, the others may follow it, as happened in the Asian financial crisis in the 1990s. LINK
Source: Dinar Recaps
TBJ » July 18th, 2022
In my opinion, the reason why there is a lull in the IQD Intel News, is because there is a pending formation of the government that is about to take place during the next week or two from the appearance of things from this date’s Vantage Point.
I know the CBI is independent and can change that rate independently of the GOI, but there seems to be a willful coordination between the GOI and the CBI, and they are waiting for the formalities to conclude.
In this case, those ‘formalities’ have different courses that can be taken- the political parties can either just agree on their candidates and proceed, or there can be a dissolution of the Parliament.
I doubt there will be any new significant news until we see a conclusive course in the days ahead, and the international PRESSURE in addition to the demands of the Iraqi citizens for a better life is all on them to get it done!
There is a lull because the observers are sitting on the edge of their seats (me included) with baited breath, because it sure does look like we are about to see what we have been waiting for at last.
Tivon » July 18th, 2022
“Prime Minister Mustafa Al-Kazemi directed all ministries to mobilize their efforts to implement the provisions of the Food Security Law”. End quote.
The Blitz Play, is forming on the 80 yard line. They left the huddle with a defensive end on both sides.
The Contracts & Procedures. How will they execute the play? Dissolution or send the line backer up the middle which would be the PM and cause a turnover.
Well we now know where are don’t we? Nullifying contracts and adjusting wages in light of inflation? I wonder what purpose this would serve if French company Total’ signed off on an increase from 85 thousands barrels per day to 210,000 thousand that would cause a reconsideration as to how business is calculated and conducted?
Maybe this new deal wouldn’t work under the current program rate if they plan on benefiting from that 40% annual revenue that Iraq will be exporting.
I mean didn’t they say this agreement would cause transparency & competition in the oil sector with the four projects one of them being the Artawi oil field.
Well having a international currency competing against the likes of the Euro that is now 1:1 with the USD while supply & demand grows for the new IQD that is now back by hard currency reserves along with oil that other countries will see as a stable sovereign country with open books on the accounts in ministries will create the transparency that Total is looking for correct?
I am just pondering a point here. Because all of this can only come by way of continuing the present term of Al-Kahdimi by putting full force behind the EFSL.
Can all of this be done prior to August ?st? Well enacting emergency powers to address critical issues that affect the citizens way of life who can barely afford rent, clothes, and food.
I would presume the PM does not want to drag these problems into another month of inaction on his cabinet when he requested of them to address the USD price at the earliest session.
Well isn’t that coming up on the 20th? Because this is the only way he can even begin to alleviate the economic hardships by bringing attention to the elephant in the room which is the exchange rate.
The PM is on the move as he knows time is running short. We have about a week and some change left in this month.
He appears to be taking this opportunity to ensure there are no more delays. Action oriented plans are being implemented. And we are about to see something powerful take place in the days leading up to the 1st. IMO
Samson » July 18th, 2022
Al-Kazemi’s advisor clarifies a news published by the official media about the exchange rate change
18th July, 2022
The advisor to the Iraqi Prime Minister, Mustafa Al-Kazemi, issued today, Monday, a clarification regarding a news published by the official newspaper about the change in the exchange rate of the dollar against the dinar.
Haitham al-Jubouri, in a clarification received by Shafak News Agency, said that Al-Sabah newspaper published the title of an interview it conducted with us in which we talked about an economic vision that would increase non-oil revenues and attract diversified investments, which would inevitably give strength to the Iraqi dinar, given that the price of the dinar depends on the offer. demand and sustainable economic development.
He added, “I was surprised that the headline of the news differs from this content mentioned by the same person who interviewed us in the body of the news, reasoning that the headline should be attractive.”
Al-Jubouri, who was the head of the Finance Committee in the previous parliamentary session, explained that “what was published about the government’s intention to restore the exchange rate is contrary to the truth of what we have stated. Rather, the government is engaged in fundamental reforms in the financial and economic affairs that would create the desired development.” LINK
The government is discussing the dollar exchange rate and plans to convert 4 ministries to self-financing
18th July, 2022
The Prime Minister’s Adviser for Economic Affairs, Haitham al-Jubouri, presented an economic vision that is summed up in converting four ministries to a self-financing system, restoring the dollar exchange rate and unifying employee salaries
Al-Jubouri said, according to the official Al-Sabah newspaper, that “there is an economic vision for the next phase, some of which have been written. From central to self-financing, and it can benefit from the revenues generated by it, through the large and discreet companies it owns or the revenues achieved through its work,” noting “the possibility of benefiting from the amounts allocated to it from the state treasury in establishing productive development projects
He added, “There is a vision in the exchange rate of the dollar, and restoring confidence and strength to the Iraqi dinar, provided that it is not a decision, as happened in the decision to raise the exchange rate, but with real economic reforms and an increase in non-oil revenues with a plan extending from one to four years, and increasing the volume of investments in the country by persuading Iraqi investors who invest their money abroad to return to Iraq through facilities provided to them and encouraging them to invest their money inside the country
Al-Jubouri indicated that “among the vision is the automation of government procedures, electronic connectivity, the amendment of instructions for implementing government contracts, and the issue of tax exemptions, with a focus on increasing the tax base through profitable companies or personalities,” expressing “regret that there is a focus on the simple citizen in the tax issue.” While most companies evade the final accounts because they are fake
And the Prime Minister’s Adviser for Economic Affairs indicated, “the possibility of increasing customs revenues, which can achieve huge sums in the event that there is governance of the border crossings
He explained, “The necessity of activating the collection of electric energy that is prepared for citizens, shops and commercial institutions, as the ministry collects only 7 percent of the money. Without increasing the total amount for it, which will be among the interests of the next government, as it is not
possible for an employee in a ministry to take 5 times as much as another employee with the same title, degree and certificate
He stressed, “Part of these ideas can be started through effective laws such as the Financial Management Law and the Electronic Signature Law, which needs speed in the procedures of its legislation. He pointed out, “Some find it strange to implement some of this plan, but all of them are feasible and there is an integrated vision on this subject, if we know that it can be applied in short, medium and long stages LINK
Tivon » July 18th, 2022
We were just talking about this. They will by default increase oil revenues once they return the price of the USD. Especially the French oil deal with “Total, who had signed off on a 40% cut of that revenue with the four projects in development.
1:1 will definitely move numbers for everyone involved in Iraq’s private sector. We are entering the final phase. You can tell they have been sitting on this information and couldn’t wait to share.
Taxes & Customs will definitely see a boost now that they reduce corruption in that sector down to zero. Because now everyone will be supplied a number instead of a name. That way no one’s identity can be used to siphon money from citizens dead or alive .
He states some of the reforms have already been written and is ready to be applied. I think one of them has to do with the Oil & Gas Law. Simply by the fact that it supposed to be one of the agendas for the upcoming session next week that is on the table for a vote. Or in this case enactment.
Look they even brought up E-Government. This will reduce bureaucratic red tape and allow electronic use of procedures that doesn’t involve any paperwork. And again this will reduce corruption.
In the 1970s, Iraq was the least corrupt Arab state until Saddam’s wars of aggression against first Iran and then Kuwait brought not only military defeat, but also suffocating sanctions. The economic distortion, black market economy, and the United Nation’s own corruption made matters worse.
After the United States invaded in 2003, it made matters worse by pouring money into an economy that did not have the institutional capacity to handle it.
Now things have changed dramatically. Iraq has a new strategy to tackle all sectors and outright stop corruption. General Customs Authority is another section of Iraq that has addressed and reduced corruption.
We are in the home stretch Ladies & Gentlemen. This last week of this month will yield so much for us and Iraq. I can not wait to see what happens next. IMO
Samson » July 18th, 2022
Food Security Law Comes Into Force
18th July, 2022
The official “Al-Sabah” newspaper reported, on Monday, that despite the huge uproar that had been raised for a long time around him and the political debates and bickering for months, the entry into force of the “Emergency Support for Food Security and Development” law passed in silence and calmness.
A member of the Parliamentary Finance Committee, Jamal Cougar, said in a statement reported by the newspaper and seen by (the information), that “the ruling on the non-implementation of the law and not actually bringing it into force, is incorrect,” explaining that “any law is legislated, especially if there is a financial aspect, Its effect will become clear when it is fully implemented.”
Cougar added, “The law has two timings; Part of it is being implemented by the current government, and the other part is being implemented by the next government, and seven trillion and 250 billion dinars have been allocated for its implementation.”
He explained, “The first part that the current government will spend its money on will be a part of it for the development of the regions, and they need projects to be submitted by the governorates, and part of those funds are dedicated to stabilizing contracts who need to audit their transactions, and a part is dedicated to appointing 15,000 new graduates, and this needs to scrutinize and study the needs of ministries and specializations, and therefore everything that was mentioned needs work, effort and time.”
Cougar stressed that “judging this law or others to failure before it is applied is inaccurate and unfair, and the expected steps that the citizen will see will be when applying this law, so it is premature to judge it.” LINK
Source: Dinar Recaps
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