For the second day in a row. A complete halt to banking and a significant decline in the dollar in Baghdad
Baghdad Today – Baghdad
On Tuesday, the Al-Kifah and Al-Harithiya stock exchanges in the capital, Baghdad, witnessed an almost complete halt for the second consecutive day, while dollar exchange rates recorded a decline in local markets.
The correspondent of (Baghdad Today) said that “most of the owners of exchange offices in the local markets in the capital, Baghdad, stopped buying and selling the dollar because of its instability and the stock exchange stopped for the second day in a row.”
He added that “the sale and purchase prices recorded a decrease in some exchange shops in the local markets, where the selling price reached 158,000 dinars, while the purchase price reached 157,000 dinars per 100 dollars.”
Yada, if this is only an RI, I wonder if the contract rate would still be available when they actually do a full blown RV?
Remember that the contract rate money comes from a single pool. When it’s gone, it’s gone. In other words, first come first served.
KMAN,,,this has always been a RI. Not and RV. And before a complete ReIssue, looks like they are going to float to allow market to increase the value. With Kuwait, it was a ReIssue and the market demand caused it to float up to close to $9.
So Yada do we wait for it to float up or go in an exchange what you have ? How long did Kuwait go up ? How long was the wait until Kuwaiti reached its max days or moments or ???
Not sure how long it took to go up. Know, from reading articles, what took them 10 days has taken Iraq 5 weeks. Maybe the change in the CBI governor will have an impact in the release as we heard is possible on the call. When asked in previous calls, Tony referenced could take 2 to 3 weeks to go up and then decrease. Stated was how long it would take to get the bulk of the dinar before the demand decreases
yada and others Kuwait came out at 2.60 and over the next 30 days it went up to 2.90 cents, +/- a small amount….it hit a top in 2015 around 3.05 then has trickled up since to around 3.15 or so now around 3.05
The dollar is falling against the dinar, and the exchange rate is likely to stabilize
The government has intensified its measures aimed at controlling prices in the local markets and limiting the effects of the rise in the dollar exchange rate, while specialists have suggested that stability will return to the exchange market.
Yesterday, Monday, the local markets recorded a decline in the dollar exchange rate to less than 160,000 dinars for the $100 category, after it exceeded 167,000 dinars for the same category.
The government sought the help of the private sector to confront the waves of high prices, by issuing seven decisions in favor of controlling the repercussions of the exchange rate hike in the parallel markets.
The decisions taken during the meeting of Prime Minister Mohamed Shia Al-Sudani with the Federation of Chambers of Commerce were welcomed by many specialists in economic affairs, who emphasized the importance of the government’s step in controlling prices, in addition to being “a real recognition of the ability of the private sector to play a role in the economic process.”
The decisions included opening a new window for selling foreign currency to small traders through the Trade Bank of Iraq (TBI). Financing the Central Bank of the Iraqi Trade Bank with an additional amount of $500 million for the purpose of opening letters of credit for small merchants.
Economic affairs specialist Maytham Al-Bolani believes that there is a real desire on the part of the Prime Minister to advance the economic and development situation, and to increase cooperation with the private sector.
Al-Bolani, who attended the meeting between the Prime Minister and the Federation of Chambers of Commerce, told Al-Sabah that “Al-Sudani is determined to make the private sector a partner in the economic decision by having a voice for it when making decisions within the Ministerial Council of Economy.”
He stressed, “The government’s determination to adopt real economic reform mechanisms whose results can be felt within a year from now, and this matter will be a starting point for the private sector towards activating the productive and service joints inside Iraq, where the private sector that owns expertise and capital is looking for hope to move towards turning the wheel of production and advancement.” services.”
Al-Bolani pointed out that “the problems that confuse the mechanisms of developing the national economy are not spur-of-the-moment, but rather accumulated and need time to be contained and overcome their effects, and then transformed into outlets that support the national economy, and thousands of factories and factories suspended from work due to lack of interest are revived.”
Al-Bolani stressed that “the important and positive thing about communicating with the prime minister is that it is a periodic meeting on a regular basis, weekly, to review the reality of the economy and the most important issues that concern activating activities, and evaluating the past period.”
For his part, Bassem Jamil Antoine, an economist and specialist in the private sector, believes that the government’s approach to the private sector is a good step to take advantage of its capabilities and the speed of its dealing with economic events, but we hope that this approach will be a fixed “government principle”, and not during times Only crises, especially since the private sector is part of the state and citizenship and that its affiliation with the country is authentic and cannot be isolated, in addition to its ability to respond to the government’s demands at certain times, as is happening now from the high-price crisis caused by the high exchange rate.
Antoine explained, “The private sector’s reassurance of the government’s economic directions, its provision of guarantees and exemptions, the elimination of red tape and bureaucracy, as well as automation that facilitates the private sector’s procedures in state departments, and the reduction of fees and taxes, are all good government beginnings that we hope will continue and be a general government approach during the coming periods.” coming”.
The economist pointed out that, within the paragraphs of the five-year plan, the state’s approach is a “social market economy” and this step can work to restore all the capabilities of the Iraqi private sector from abroad to invest in the country, indicating that the private sector hopes to double cooperation opportunities with government agencies, especially With regard to granting him the “dollar” at the official rate, with the aim of completing import operations without additional costs.
Amer Naji, a specialist in economic affairs, confirmed to Al-Sabah that “the presence of the government alongside the private sector to discuss economic problems is extremely important at this time, as the national economy is clearly suffering in its productive and service sectors, despite the availability of the elements to achieve sustainable development in the private sector.”
Naji indicated that “seriousness in addressing economic problems is required, especially since both the government and the private sectors have a real desire to advance the economic reality through their agreement to chart paths for developing economic performance by experts who have long experience in various production and service sectors.” link
The dollar crisis fuels the Iraqi street, despite the overthrow of the central governor
One day after the escalation of popular calls in Iraq , for a mass demonstration in front of the central bank building overlooking the Tigris River in the center of the capital, Baghdad, Prime Minister Muhammad Shia al-Sudani approved a package of new decisions aimed at confronting the record decline in the value of the dinar against the dollar, which exceeded Sunday evening. The threshold of 1,650 dinars to one dollar, the most prominent of which was the dismissal of the governor of the Central Bank, Mustafa Ghaleb Makhaif, from his post.
This comes in addition to other decisions, including opening a special window for small traders and importers, to provide them with dollars at the official rate, and canceling many procedures related to citizens obtaining dollars from those wishing to travel outside the country, up to 5 thousand dollars per person.
Meanwhile, one of the coordinators of the demonstration, which is scheduled to take place tomorrow, Wednesday, to protest against the dollar crisis, Muhammad al-Saadi, told Al-Araby Al-Jadeed that they will continue to mobilize for demonstrations aimed at amplifying the voice of the millions of affected Iraqis.
Al-Saadi added that they “do not believe in the feasibility of these treatments, because the crisis was mainly due to foreign remittances destined for countries subject to US sanctions, and the US Federal Bank imposed measures amounting to financial guardianship over the dollar destined for Iraq,” noting that the dollar crisis has clear political dimensions. .
A crisis that exceeds the central bank Despite the new measures, specialists in the financial affairs confirm that it may not produce any positive and effective results on the crisis of the decline of the Iraqi dinar, which was beyond the ability of the central bank, as it is linked to measures taken by the US Federal Bank administration, which established a special platform for official Iraq trades to monitor Remittances and specifically preventing Iran and the Assad regime from benefiting from them, according to a prominent Iraqi official in the capital, Baghdad, in statements to Al-Araby Al-Jadeed.
The official, who declined to be named, said that Prime Minister Muhammad Shia al-Sudani may speed up the date of his scheduled visit to Washington due to the current crisis that has cast a shadow on the Iraqi markets and affected the purchasing power of citizens greatly in the past two months. He pointed out that there are new measures to be taken by the government related to the administrations of Iraqi government banks, the removal of violating companies and banks from the currency auction, and the imposition of other reforms.
And the value of the Iraqi dinar has declined since mid-December last, from 1480 dinars to one dollar, to record levels that reached on Sunday, to 1660 dinars, and security operations during which dozens of speculators and currency traders were arrested in Baghdad did not help in controlling its prices or at least curbing it. The continuous decline of the local currency.
A statement by the Iraqi Ministry of Interior vowed to those it called “manipulators” in hard currency, the dollar, with heavy penalties, according to the Economic Crimes Law, but the field measures taken by Baghdad and Erbil did not result in any improvement during the current week.
After that, the Prime Minister issued several decisions, the most prominent of which, yesterday, Monday, was the dismissal of the Governor of the Central Bank of Iraq, Mustafa Ghaleb, and the appointment of Ali Mohsen Al-Alaq by proxy as his replacement, and the director of the Iraqi Trade Bank, Salem Jawad Al-Jalabi, was referred to retirement and Bilal Al-Hamdani was named as his substitute by proxy as well.
In another separate statement, the Prime Minister’s Office stated that the Prime Minister took several decisions after a meeting with members of the Baghdad Chamber of Commerce, to address the fluctuation of the exchange rate of the foreign currency against the dinar.
According to the statement, several decisions were taken to stabilize the exchange rate and prevent manipulation, most notably opening a new window for selling foreign currency to small traders through the Iraqi Trade Bank, launching the import of goods and merchandise for companies registered with the Ministry of Commerce, facilitating import procedures, reducing the requirements for opening documentary credits, and involving Chambers of Commerce and the Federation of Industries in the sessions of the Ministerial Council of Economy, representing the private sector.
The government also approved outlets at airports to sell dollars to citizens wishing to travel at the official exchange rate, which is 1,450 dinars per dollar, at $5,000 per citizen.
A slight decline in the dollar after hours of Iraqi government decisions. The exchange rates of the dinar against the dollar ranged at 1620 dinars per dollar, which is lower than Sunday, which closed at 1650. Money experts attributed the slight decline to market confusion and buyers’ unwillingness to buy until clarity. Decisions of the new governor who is appointed.
The Iraqi government’s financial advisor, Mazhar Muhammad Salih, answered a question about the reason for the decline in the value of the dinar and the current crisis in a speech he gave at an economic forum on Sunday evening, in which he said that “the difference in the value of remittances, and the constant demand for dollars are two main reasons that led to the decline in the price of the dinar against the dollar.”
Saleh focused on the country’s financial situation, and the reasons for the decline in the exchange rate of the Iraqi dinar against the US dollar, noting that “Iraq has an account for oil receipts established on the basis of a resolution issued by the UN Security Council, and this account is documented in the name of the Central Bank of Iraq, and all Iraq’s resources are transferred to it.” finance in hard currency.
He noted the existence of a relationship with the recent US federal measures regarding financial transfers to Iraq and the decline in the value of the dinar. Saleh explained that the supply and demand for foreign currency is a major reason for the high rate of inflation in Iraq. The financial advisor pointed out that there is a large financial reserve in the Central Bank of dollars.
America and the volatility of the dinar, a specialist in Iraqi financial transactions, Ali al-Hayani, said, “The volatility of the dinar began with Iraq’s compliance with some standards of the international transfer system (Swift), which Iraqi banks must apply recently to access Iraq’s dollar reserves in the United States.
Al-Hayani added, to Al-Araby Al-Jadeed, that the Iraqi cash reserves with the United States amount to 100 billion dollars, which requires Iraq’s commitment to the provisions of global anti-money laundering, the provisions of combating the financing of terrorism and money laundering, and all monetary transactions related to the US sanctions imposed on banks and institutions associated with the regime. Iran in one way or another.
Al-Hayani believes that the recent record rise in the dollar is a dangerous precedent that puts the Sudanese government in great embarrassment, due to its inability to develop solutions that help bridge the gaps in domestic monetary policy on the one hand, and its lack of control over financial markets on the other hand.
However, a member of the Iraqi parliament, Fahd Turki, told Al-Araby Al-Jadeed that the Central Bank and the Ministry of Finance bear responsibility for the collapse of the local currency against the dollar in such a large way. Turki warned the Iraqi monetary authorities of what he described as “continuing to ignore the list of international financial transactions, because this will make it difficult for their mission to restore balance and adjust the exchange rate in the local market.”
He revealed that “the Central Bank is unable to monitor the currency auction, the movement of funds, follow-up on banks and cash circulation,” stressing the importance of activating the role of the Financial Supervision Bureau and the Integrity Commission to limit suspicious trading and money laundering.
Warnings and risks
For his part, economic researcher Ali Awwad warned of the danger of black remittances on the Iraqi market, which is one of the reasons for the high exchange rate of the dollar in the local market. Awad told The New Arab that the local exchange offices follow illegal methods of transferring money abroad, and there are merchants who follow the method of transferring funds outside Iraq through these offices without referring to the Central Bank or the official money transfer outlets.
In order to limit this phenomenon, Awwad stressed the importance of the Iraqi Ministry of Trade taking over the full import process from abroad through its public companies, to cover the market’s need through its agents distributed in all Iraqi governorates at the unified official price.
He added that the Ministry of Commerce can import from abroad at the official real price of the dollar, without the need to open a new credit, in addition to having external transport assets that facilitate the import process.
Awad stressed the importance of moving away from the prosthetic solutions pursued by the government, warning against the dollar exchange rate exceeding the threshold of 200 thousand Iraqi dinars for every 100 dollars if the situation remains as it is now.
Who is affected?
A member of the Finance Committee in the Iraqi parliament, Jamal Cougar, believes that the citizen is the main affected by this new record rise in the dollar, because the Iraqi market is witnessing a significant rise in the price levels of goods and commodities.
However, Cougar, in a press interview, believes that state institutions have also been greatly affected by the high price of the dollar, because they follow the official rate approved by the Central Bank.
Economic researcher Ali Awwad warned of the danger of black money transfers to the Iraqi market
He added that the impact of the rise on institutions comes due to increasing inflation indicators and high rates of recession in the market, which leads to damage to border crossings through a decrease in tax and customs revenues.
Cougar called on the Iraqi government to adhere to the national financial and monetary system, in order to be in harmony with the global monetary system, indicating that there are external and internal political issues outside the will of the Iraqis that led to a significant rise in the dollar exchange rate and its arrival to these record numbers.
In the same context, the Strategic Center for Human Rights in Iraq confirmed that the decline in the exchange rate of the dinar against the dollar increased unemployment and poverty rates in Iraq. “The decline in the value of the Iraqi dinar has led to an increase in the number of unemployed people, and many private projects have stopped due to the high prices of raw materials and the increase in poverty rates due to the large increase in food prices,” Hazim al-Rudaini, deputy head of the center, said in a press statement.
He called on the government to “take quick steps to preserve the value of the Iraqi dinar, impose specific prices on basic foodstuffs, and work to support the agricultural and industrial sectors. link
Source: Dinar Recaps
Kuwaiti report: The Central Bank is in the grip of Al-Maliki and changing its president will not solve the crisis
A Kuwaiti newspaper said, on Tuesday, that the former governor of the Central Bank, who returned to his post, Ali Al-Alaq, is a close ally of Nuri Al-Maliki, and quoted sources in Baghdad, that this is part of government changes to present “scapegoats” for public opinion and requires proving the impartiality of the new president in the upcoming negotiations. with Washington.
Al-Jarida’s report, followed by “Nass”, added (January 24, 2023) that the Iraqi dinar in the post-Saddam Hussein era had never gone through a crisis like the one it is currently going through, as no one knows a fixed price for it, which prompted merchants to raise prices. Almost everything, in an attempt to compensate for the huge losses they suffered, within an import-dependent economy.
According to the analysis of the Kuwaiti newspaper, this crisis resulted from new US restrictions on dollar transfers to Iraq from the US Federal Reserve, in an attempt to control the smuggling of an estimated one hundred million dollars every day to Iran in clear violation of international sanctions at the time of a government led by hard-line parties in Shiite politics. It was sometimes considered evidence of Washington’s attempt to limit the “profits” of Tehran and its allies in Iraq today.
Senior sources in Baghdad told the Kuwaiti newspaper that the overthrow of the “central” governor is far from just offering a scapegoat to the public. Al-Sudani and behind him Al-Maliki “wants an official whom he trusts in the necessary negotiations with Washington on managing the dinar crisis and the trade relationship with Iran.”
The sources added, “Al-Maliki talked about the necessity of launching an urgent dialogue with Washington about the dinar crisis, and he could not advance this file except with someone he trusted absolutely, so he returned to his first memories and returned Ali Al-Alaq to the position he previously held in Al-Maliki’s mandate.” the second”.
The newspaper stated that the financial authority represents a distinct battle in al-Maliki’s political biography, as he had previously overthrown the former “central” governor, the late Sinan al-Shabibi, an internationally reputable banking figure, who was opposed to al-Maliki’s interventions in monetary policies, and Iran’s infiltration, and he brought the relationship as a substitute for him. Then Al-Kazemi removed Al-Alaq from office, until he returned today tasked with controlling the dollar.
The newspaper stresses that financial experts in Baghdad say that no one can restore the status of the dinar, unless he convinces Tehran to stop buying dollars from the Iraqi market, or persuades Washington to ease the strict restrictions that were recently imposed on dollar transfers to Baghdad, especially since Iraq does not He can transfer his assets outside the United States, because it is the only party that provides “international protection” for Iraq’s oil revenues, in front of hundreds of thousands of lawsuits dating back to the four wars the country fought during the past decades.
The Iraqi prime minister says that he has more than 10 new measures to prevent the collapse of the market, but experts comment on this that his impact remains limited, as 200 million dollars should be provided daily to stabilize the market, while what America currently allows does not exceed the rate of 60 million dollars, which The price of the dollar was raised to the borders of 1,700 dinars, after it was 1,450 two months ago.
Al-Maliki will have to convince the American capital that Al-Alaq’s personality is neutral and does not represent an imbalance in the higher institutions, in light of Washington’s fears of profound changes in Tehran’s interest, which gradually include security institutions, the armed forces, intelligence, and financial institutions, according to the expression of the Kuwaiti newspaper. link
Source: Dinar Recaps
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