Will the “Chinese Dragon” take over the Iraqi economy?
The Central Bank of Iraq organized the financing of Iraq’s foreign trade with China directly in the Chinese Yuan currency. This step is the first of its kind after the package of measures that facilitate access to foreign currencies.
The bank also initiated, in a statement, to take urgent measures aimed at compensating for the dollar shortage in the local market, which prompted the Iraqi Council of Ministers to agree to re-evaluate the Iraqi dinar against the dollar during the current month.
Strengthening bank balances
This step comes by the Central Bank to strengthen the balances of Iraqi banks that have accounts with Chinese banks in the yuan currency. The bank stated in the statement that the second option would be by strengthening the balances of Iraqi banks through the accounts of the central bank with JP Morgan Bank and the Development Bank in Singapore.
The financial advisor to the Prime Minister, Mazhar Muhammad Salih, said that the first option depends on the reserves of the Central Bank of the yuan, while the other option will take advantage of the bank’s reserves in US dollars in the JP Morgan Bank and the Development Bank in Singapore, as it is scheduled that these banks will work to convert the dollar into Yuan and payment to the ultimate beneficiary in China.
Today, China is working to open up its financial markets gradually to raise the role of the Chinese yuan globally, in addition to the endeavor of some countries to diversify their dealings in foreign currencies.
The Advisor to the Prime Minister for Financial Affairs, Mazhar Muhammad Salih, said that this is the first time that imports from China are funded in yuan, and Iraq’s imports from China are funded by dollars only
Yesterday, Iraq signed contracts for exploration and development of oil and gas fields with three international energy companies, including two Chinese companies, in a number of provinces. The Chinese Geo-Gad company will supervise the exploration and development of oil and gas fields in Diyala Governorate and Maysan Governorate in the south of the country, while the Chinese United Energy Group Ltd. will explore and develop an oil and gas field in Basra Governorate, at a time when the Emirates-based Crescent Petroleum Company signed contracts. Exploration and development of three oil and gas fields in the provinces of Diyala and Basra as well.
Last Monday, a number of tribal militants in Dhi Qar governorate launched an armed attack on the Chinese company that implements Nasiriyah airport in southern Iraq. Sources said that the Police Command and the Operations Command were inquired about the shooting incident at the Chinese company executing Nasiriyah International Airport.
The employees of the Chinese company, but there are no human losses, and the sources indicated that this matter occurs in the event of encroachment on the agricultural land belonging to the citizens without informing them before starting any project. limk
Company.. keeping pace with the best electronic payment systems
Hajja Um Montaser goes to collect her monthly retirement pension from an office adjacent to their house, and she used to repeat the phrase “God bless you, Abu Key Card.” This matter did not come out of nowhere, but left behind great pain. She receives her salary, his answer is from the grievances of the bank that I used to see.
This is one of the thousands of cases that were finding it extremely difficult to receive the pension salary, which is one of the most important dues, but the presence of the International Smart Card Company represented for them the door of access from the long suffering that they never imagined would end with this happy ending that the salary would be at the head of the street.
Hajjah Umm Muntasir, at first, did not realize that her salary was in this small card “according to the owner of the port,” and she did not pay him the required attention, but when she saw the receiving mechanism, the situation changed and it was put in a folder and an important place.
Through this experience, it becomes clear to us the importance of electronic payment in Iraq, the role of the “K” company and its founder, and how he was able, through directives from the Central Bank, to transfer advanced technology and to have an active role in the process of developing financial performance in Iraq.
As we have mentioned on more than one occasion, Kei Company is working on adopting the best smart systems around the world and benefiting from them to provide advanced products that are characterized by ease in providing financial dues, and thus it is the first national company to provide world-class services and keep pace with the new that is taking place in the field of international electronic payment.
Al-Kinani pointed out that the company’s teams are working closely on the reality of the development of payments around the world and benefiting from them locally, as the company realizes that the volume of work in Iraq needs advanced payment systems that contribute to providing modern payment requirements.
It is noteworthy that the family of the company includes more than 7 million beneficiaries in all regions of Iraq. link
The collapse of the Iranian currency casts a shadow over the Iraqi economic, agricultural and health sectors
The historic collapse of the Iranian currency, recording 5 million per 100 dollars due to Western sanctions, raised questions about the impact of this collapse on the Iraqi market and economy.
Iraq is the first importer of Iranian goods and commodities, with about $17 billion annually, according to specialists. Bonbast data revealed, on Wednesday, that the Iranian currency fell to a record low against the US dollar, recording 501,300 riyals.
The price of the US dollar in the Iranian free (black) market is witnessing a record high, with the continuation of unrest and the increasing isolation of the country amid Western criticism of the strict security measures taken by Iran and its relations with Russia.
Salam Sumaisem, an economist, says, “Iran is the first export to Iraq with a value of 17 billion dollars annually, and sometimes more, so the decline of its currency helps a lot to increase its exports, and a country like Iraq may increase its imports from Iran, and therefore this issue is in favor of the Iranian trade balance.” .
Sumaisem explained to Shafaq News agency, “Some countries deliberately devalue their currency to increase their exports, and Iraq imports many things from Iran, as it feeds the Iraqi market with foodstuffs, plastics, building materials, ceramics, and other daily basic consumer items, and thus devaluing the currency works in the interest of export sovereignty for industry.” Iranian agriculture.
And the Iranian Minister of Industry, Mines and Trade, Reza Fatemi Amin, announced on February 21 that the volume of his country’s exports of goods and commodities to Iraq increased by 23 percent during the first ten months of the Iranian year, which began on March 21, 2022.
Fatimi Amin said in a televised interview that Iran’s exports have exceeded $50 billion so far, explaining that export is important to us for several reasons.
multiple economic effects
The impact of the collapse of the Iranian currency is not limited to the Iraqi economy in terms of industry and agriculture only, but also includes multiple aspects, foremost of which is the tourism aspect (religious, recreational, and therapeutic), according to the researcher in economic affairs, Ahmed Eid, noting, “The more the Iranian currency decreases, the higher it will rise.” The value of the hard currency, which is a factor of bringing in from abroad, as it happened in Lebanon and other countries.
Eid continues to Shafaq News agency, “The financial market is also open towards Iran, in addition to the entry of counterfeit Iraqi currency from Iran into Iraq and the withdrawal of hard currency and buying it from exchange shops in Baghdad and a number of provinces as well as in the Kurdistan region, which means that the Iraqi financial market is invaded by networks.” Iran to withdraw hard currency from Iraq and smuggle it towards Iran illegally and legally.
The decline of the Iranian currency comes despite the recent steps taken by the regime, including the appointment of Muhammad Reza Farzin as the new governor of the Central Bank on December 30, 2022, after the value of the local currency reached its lowest level ever against the dollar, in the midst of mass protests and continuous Western sanctions.
After years of Western sanctions over Iran’s nuclear program, the riyal was trading at 315,000 riyals to the dollar when anti-government protests erupted in mid-September.
The head of the Najaf Hotels Association, Saeb Radi, believes that the impact of the collapse of the Iranian currency on the Iranian tourist is greater than on his Iraqi counterpart, and he explains this by saying that “when the Iranian tourist comes to Iraq, he must pay the costs of housing, travel and food in Iraqi dinars or US dollars, while the Iraqi tourist who travels To Iran, he faces the high cost of living despite the depreciation of the currency.
Rady explained to Shafaq News agency, “The US sanctions on Iran affected all aspects of life, and caused prices to rise, when the Iraqi tourist visits Iran and even Lebanon or Syria, he feels the high price despite the depreciation of their currency, unlike the Iranian visitor when he comes to Iraq. It is true that it feels expensive, but compared to their currency and in relation to the dollar, it is considered low.”
In turn, Abu Ali, the owner of a vegetable and fruit shop in Diwaniyah Governorate, says, “The collapse of the Iranian currency affects us by increasing its export of agricultural crops to Iraq, including tomatoes, potatoes, and eggplant.”
Abu Ali indicated, during his interview with Shafaq News agency, that “the citizen prefers imported goods for their cheap price compared to the local crop, and therefore Iran will be the winner at the expense of our local goods, so I demand the government – especially during this period – to limit the proportion of imports from neighboring countries, especially From Iran, so that our local product would not be harmed by this import.” link
Source: Dinar Recaps
If you wish to contact the author of any reader submitted guest post, you can give us an email at UniversalOm432Hz@gmail.com and we’ll forward your request to the author.
All articles, videos, and images posted on Dinar Chronicles were submitted by readers and/or handpicked by the site itself for informational and/or entertainment purposes.
Dinar Chronicles is not a registered investment adviser, broker dealer, banker or currency dealer and as such, no information on the website should be construed as investment advice. We do not support, represent or guarantee the completeness, truthfulness, accuracy, or reliability of any content or communications posted on this site. Information posted on this site may or may not be fictitious. We do not intend to and are not providing financial, legal, tax, political or any other advice to readers of this website.
Copyright © 2022 Dinar Chronicles