Iraq Economic News and Points To Ponder Monday Afternoon 8-5-24

After Sanctions.. A New American Step Towards Iraqi Banks

Buratha News Agency652024-08-05  The United States of America did not stop at punishing some Iraqi private banks by preventing them from participating in the currency auction held by the Central Bank of Iraq daily to sell the dollar, but the US Treasury Department recently returned and informed it of the need to merge and close some of those banks, thus deciding their fate after many suspicions had been raised about them.

Four Iraqi private banks were subjected to sanctions during the past period, most notably the Middle East Bank owned by businessman Ali Ghulam, who arrived in Iraq on November 19, 2022 and was arrested at Baghdad International Airport, based on an arrest warrant issued against him in accordance with Article 456, and then released on bail.

Informed sources say, "The Iraqi delegation that visited the United States of America a few days ago, headed by Foreign Minister Fuad Hussein, Central Bank Governor Ali Al-Alaq, and Prime Minister's Advisor Kazim Al-Hassani, discussed with the US Treasury and the Federal Reserve the issue of restricting the dollar from Iraqi banks."

The sources added that "the US Federal Reserve recently requested from its Iraqi counterpart a plan to reform the banks restricted from using the dollar, which includes closing a number of them and establishing new banks through a coalition of a number of banks among themselves."

She stressed that "the Federal Bank suggested to its Iraqi counterpart to seek the assistance of an international company to present a broad reform plan for the banking sector, and in the coming months this company will submit its report on the banking sector to the Central Bank and the Iraqi government."

The sources noted that "the Federal Bank wants to reduce the number of Iraqi banks from 72 to less than 40 banks during the current phase."

The US Treasury and the US Federal Reserve had previously restricted the dollar's access to 32 Iraqi private banks, through four stages starting in 2022. The companies restricted from using the dollar in Iraq also reached more than 250 companies, most notably "Fly Baghdad" Airlines.

In turn, a banking official, who refused to reveal his name, explained that “the banking market has become monopolized by five banks, which makes it difficult for other banks to compete with them. Therefore, forming a coalition of five banks, one of which is a foreign bank, will contribute to reducing the monopoly in the banking market and increase competition.”

He stressed that "reforming restricted banks will be through restructuring them, starting with changing ownership, employees, developing risk management departments, combating money laundering and terrorist financing, and others."

The banking official stresses that "at the end of this year, the Central Bank of Iraq will cancel the dollar transfer platform, and will rely on banks that have intermediary banks. During the coming month of September, a meeting will be held between the Central Bank of Iraq and the Federal Reserve in America, which will include presenting the Central Bank's plan to reform the sector."

The United States is working to prevent the Iranian government and private sector companies from using the dollar, so it has begun to restrict its access to some Iraqi banks accused of leaking the dollar.

For his part, economic researcher Mustafa Akram Hantoush believes that “merging banks is a very excellent step, and will contribute to reducing the number of banks operating in the country. Banks that have been in trouble for years must also be closed.”

Hantoush points out that "the Central Bank of Iraq bears part of what happened in the Iraqi banking sector, because it is unable to confront the US Treasury or the Federal Reserve."

He points out that "there are good banks that have been restricted by the United States of America, and the Central Bank of Iraq must defend them and return them to work because the Iraqi banking sector is being massacred in favor of foreign banks."

In November 2022, the US Treasury representative met with representatives of 35 Iraqi private banks to warn them of issues of smuggling dollars from Iraq and adhering to instructions regarding hard currency transfers for import purposes, threatening them with sanctions in the event of non-compliance.

It is worth noting that the meeting was held in the absence of the Central Bank of Iraq, and lasted for two hours, according to leaked information.

It is noteworthy that the Iraqi banking sector is also neglected by citizens who have lost confidence in it. According to World Bank figures issued last year, only 23 percent of Iraqi families have an account in a financial institution, which is one of the lowest percentages in the Arab world, especially since the owners of these accounts are government employees whose salaries are distributed to public banks at the end of each month.

However, these salaries also do not remain in the accounts for long, as queues quickly form in front of banks from employees who withdraw their salaries in cash and prefer to keep them at home.   https://burathanews.com/arabic/economic/449413

Al-Sudani And Allawi Discuss The General Situation, The Government's Efforts And Its Serious Steps To Achieve Economic Reform

Sunday 04, August 2024 19:04 | Politics Number of readings: 96  Baghdad / NINA / Prime Minister Mohammed Shia Al-Sudani received today, Sunday, former Prime Minister, head of the Iraqi National Accord Party, Iyad Allawi.

The meeting witnessed, according to a statement by the Prime Minister's Office, discussing the general situation in the country, and discussing the government's efforts and serious steps to achieve economic reform, which is the basis for developing all vital sectors, and improving the economic and living conditions of citizens throughout Iraq. Al-

Sudani and Allawi touched on the situation in the region, and the challenges it faces in light of the increasing pace of bloody attacks by the Zionist occupation authorities against the Palestinian people in Gaza, and emphasizing the sovereignty of Iraq, and its security, which is a gateway to the security and stability of the region. /https://ninanews.com/Website/News/Details?key=1145636

Central Bank Governor Explains Reasons For Dollar Price Fluctuations: 85% Of Remittances Do Not Pass Through The US Federal Reserve

Economy | 04/08/2024  Mawazine News – Baghdad  The Governor of the Central Bank, Ali Mohsen Al-Alaq, revealed today, Sunday, the reasons for the fluctuation of the dollar price, noting that 85% of transfers do not pass through the US Federal Reserve.

A statement by the Parliament's media department received by (Mawazine News) stated that "the governor of the Central Bank provided a full briefing on the reasons for the fluctuation of the exchange rate, the mechanism of the electronic platform and its role in controlling internal and external trade, in addition to the housing initiative file, US sanctions on Iraqi banks, and the status of the foreign currency reserve at the Central Bank." Al-Alaq explained, according to the statement, that "Iraq's foreign currency reserve is sufficient to create balance in the market," indicating that "the Central Bank sells more than $250 million daily to meet the requirements of foreign trade." https://www.mawazin.net/Details.aspx?jimare=252729

Al-Alaq: Our Foreign Exchange Reserves Are Sufficient To Create Balance In The Market

Governor of the Central Bank of Iraq Ali Al-Alaq 

Banks  Economy News – Baghdad  Central Bank Governor Ali Mohsen Al-Alaq confirmed on Sunday that our foreign currency reserves are sufficient to create balance in the market.

The media office of the head of the Finance Committee in the House of Representatives stated in a statement, which was reviewed by "Al-Eqtisad News", that "the Governor of the Central Bank, Ali Mohsen Al-Alaq, provided a full briefing during his hosting of the Finance Committee on the reasons for the fluctuation of the exchange rate, the mechanism of the electronic platform and its role in controlling internal and external trade, the housing initiative file, US sanctions on Iraqi banks, and the status of the cash reserve of hard currencies at the Central Bank of Iraq."

Al-Alaq stated, according to the statement, that "our reserve of hard currency is sufficient to create balance in the market," indicating that "the Central Bank sells more than 250 million dollars daily to meet the requirements of foreign trade," indicating that "85 percent of foreign transfers are currently taking place between Iraqi banks and correspondent banks, without going through the US Federal Reserve."

He pointed out that "the housing initiative is of great importance to the bank, and that the volume of loans granted within the real estate initiative amounts to 10 trillion dinars," adding that "the Central Bank is now heading to cover the financing of the construction of 23,000 housing units, and priority will be given to completed residential complexes." - https://economy-news.net/content.php?id=45911

With The Document.. The Central Bank Of Iraq Imposes Guardianship Over Zain Iraq Islamic Bank

Monday 05 , August 2024 12:46 | Economic Number of readings: 151  Baghdad / NINA / The Central Bank of Iraq issued an administrative decision to impose guardianship on Zain Iraq Islamic Bank. / End 9   https://ninanews.com/Website/News/Details?key=1145790

Meeting At The Central Bank Of Iraq To Restructure Rafidain Bank

Monday 05 , August 2024 14:26 | Economic Number of readings: 236  Baghdad / NINA / The Central Bank of Iraq announced today, Monday, that its governor chaired a meeting of the Supervisory Committee for the Restructuring of Rafidain Bank.

The bank stated in a statement that "the Supervisory Committee for the Restructuring of Rafidain Bank met under the chairmanship of the Governor of the Central Bank of Iraq, Ali Mohsen Al-Alaq, and in the presence of committee members from the Ministry of Finance and advisors to the Prime Minister and senior staff at the Central Bank of Iraq, in addition to the presence of the global consulting firm (Ernst & Young)."

He added, "The progress of work on the plan adopted by the government in coordination with the Central Bank was reviewed within the framework of the expanded program to reform the banking sector and improve its performance and services and achieve financial stability," indicating that "the attendees discussed the process of organizing the administrative, financial and technical structure of Rafidain Bank, to move towards the best global banking practices."

It is worth noting that the aforementioned committee holds a monthly meeting headed by the Prime Minister to present a presentation on the steps completed and to monitor the progress of the process and provide guidance on it. / https://ninanews.com/Website/News/Details?key=1145818

Central Bank: Restructuring Of Rafidain Bank Continues

Banks  The Supervisory Committee for the Restructuring of Rafidain Bank met, headed by the Governor of the Central Bank of Iraq, Ali Mohsen Al-Alaq, and attended by members of the committee from the Ministry of Finance, advisors to the Prime Minister, and senior staff at the Central Bank of Iraq, in addition to the presence of the global consulting firm (Ernst & Young).

The progress of the plan adopted by the government in coordination with the Central Bank was reviewed within the framework of the expanded program to reform the banking sector, improve its performance and services, and achieve financial stability.

The attendees discussed the process of organizing the administrative, financial and technical structure of Rafidain Bank, to move towards the best international banking practices.

It is worth noting that the aforementioned committee holds a monthly meeting headed by the Prime Minister to present a presentation on the steps taken, monitor the progress of the process, and provide guidance on it.  157 views   08/05/2024 - https://economy-news.net/content.php?id=45930

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