Iraq Economic News and Points to Ponder Thursday AM 1-16-25
Central Bank: Closing The Electronic Platform Enhances Financial Stability
Economical 01/16/2025 Baghdad: Muqtada Anwar Two weeks after the implementation of the Central Bank of Iraq's decision to close the electronic platform for foreign remittances, opinions differed in economic circles regarding the impact of this measure on the financial situation in Iraq, especially in light of the current economic and political conditions.
Despite the initial criticism raised by the decision, many experts and observers believe that it is a “necessary step” to confront the economic challenges that Iraq is currently experiencing, especially with regard to reducing pressure on the central bank’s reserves and enhancing exchange rate stability in the local market.
The Central Bank of Iraq confirmed that closing the platform will not affect the movement of remittances at all, as transfers through this platform until 12/23/2024 represent less than 7 percent of total sales, according to a source at the bank. The source explained to Al-Sabah,
“The aim of this step is to
control financial operations,
work within the international scope in the process of foreign transfers, and
adopt the correspondent banking method,
which contributes to enhancing the stability of the financial sector under the current circumstances.”
The Central Bank also indicated that strengthening the balances of Iraqi banks that have correspondent banks abroad will continue as is, explaining that
this does not mean stopping “currency selling” operations,
but rather a change in their mechanisms within a method followed throughout the world. He added that
the mechanism for enhancing bank balances has changed, as
it is now done through the accounts of Iraqi banks with correspondent banks directly, instead of the accounts that were done through the Central Bank, and that
this new mechanism is dedicated to meeting the needs of import and foreign trade of goods, goods and services, in a way that contributes to supporting Financial and economic stability of Iraq.
For his part, the economic advisor to the Prime Minister, Mazhar Muhammad Saleh, explained that the
Central Bank had previously financed foreign trade through the currency sale window to perform two basic functions, the
first was to intervene in the money market to absorb liquidity and maintain exchange rate stability, and the
second was to finance foreign trade for the private sector,
However, the central bank faced significant challenges due to the requirements of the Federal Reserve and the US Treasury to ensure that the dollar was not used in ways inconsistent with the foreign policy and national security of the United States. Saleh added to "Al-Sabah",
"The new system of transfers is based on a direct relationship between Iraqi local banks and foreign correspondent banks, with a focus on compliance issues and combating money laundering." He pointed out that
the Central Bank strengthened Iraqi banks' dollar accounts in foreign correspondent banks, which reduced the direct intervention of the Central Bank and provided a greater role for foreign banks in auditing commercial operations. Saleh stressed that
the Central Bank has taken steps to diversify its foreign currency portfolio, including the use of the euro, the UAE dirham, and the Chinese yuan, to facilitate transactions with major trading partners, pointing out that
the new mechanisms aim to facilitate foreign trade and enhance control over money transfer operations, while ensuring access to... Goods and services to the country correctly and without irregularities. The financial advisor to the Prime Minister also noted that
“these new measures do not affect the smooth flow of supplying the Iraqi economy’s need for dollars, but
they are considered a major development aimed at enhancing transparency and compliance with international and local laws.”
On the other hand, financial and banking researcher Mustafa Hantoush believes that the Central Bank of Iraq is trying to avoid the damage resulting from the export of the dollar by adopting monetary and currency management policies that ensure reducing its responsibility without affecting its financial strength. Hantoush expressed to “Al-Sabah” his belief that
the Central Bank seeks to avoid this responsibility by delegating foreign banks, which hold accounts in correspondent banks on the recommendation of their branches or foreign owners. He also pointed out that
if the central bank wants to reduce the gap in the dollar, it must open the door to competition between banks and rely on a basket of currencies to expand the options available in the market,
calling for amending the criteria for evaluating local banks and raising their financial capabilities, in a way that contributes to achieving stability and increasing competitiveness. Hence the stability of the dollar price.
He also suggested the possibility of transferring the dollar to trading platforms in the stock market, to be sold to beneficiaries through direct deals instead of sending the dollar exclusively to banks,
stressing the necessity of regulating these operations by switching to the “Forex” market, and implementing mechanisms that ensure that funds are not transferred until after the goods arrive. Guaranteed by banks. He explained that
these measures would
raise tax revenues and
reduce illegal trade, which would contribute to
strengthening the national economy.
For his part, economic expert Nabil Jabbar Al-Tamimi said:
“The transfer platform at the Central Bank of Iraq was a mechanism for making financial transfers for merchants and importers through local banks, as the platform supervised these operations.” He added to Al-Sabah, saying:
“The Central Bank has created the necessary conditions for making transfers by establishing direct relationships between local banks and international banks through large correspondent banks, which means that transfers can be made in accordance with international standards without the need for the electronic platform.” Al-Tamimi stated that the
Central Bank has compensated the electronic platform with regular and natural transfer mechanisms, through reputable local banks, which provides merchants with direct ways to transfer money, stressing that
these mechanisms contribute to
them obtaining the dollar at the official price, which helps in gradually
reducing inflation as a result of the stability of the dollar price. Official. He also stressed that"with this measure, the need to deal in unofficial dollars on the black market is reduced, which
enhances the stability of the financial market in Iraq." https://alsabaah.iq/108660-.html
Artificial Intelligence And Jobs Of The Future
Economical 01/16/2025 Yasser Al-Metwally Studies show that 41 percent of companies around the world plan to reduce the number of their employees by 2030 due to artificial intelligence services.
This shocking percentage heralds the exacerbation of mass unemployment and its impact on global stability, as
unemployment is considered one of the most complex challenges facing governments and causes great troubles for countries.
Here we stop at several questions that we put before the Iraqi planner so that they are accessible to the decision maker.
If this remarkable prediction is correct, there will be questions that require answering.
How do you address unemployment in Iraq, even though it is already widespread and the solutions are still simple for more than 20 years?
Are our universities qualified to address such an upcoming challenge in light of the expansion of the number of universities and their outputs?
What is the ability of individuals (employees or workers), I mean in the government sector and the private sector, to adapt to the monsters of the coming change?
How much time do we need to qualify and prepare a generation armed with information knowledge and capable of dealing with artificial intelligence?
This comes in light of the horizontal expansion in public and private universities with specializations that have become traditional and supplying the labor market with specializations that are redundant to the need, which contributes to deepening the extent of unemployment.
A sincere call to reconsider investment in education to create a young generation with new skills to occupy the jobs of the future to catch up with the global movement.
In parallel with the tireless efforts and continued government interest, and with the follow-up of the Prime Minister and his team, in adopting the digital transformation project and achieving somewhat acceptable results.
We hope that this new year will witness the achievement of tangible results.
We see the need for a vision from the Council of Ministers in partnership with the private sector (companies, banks, public and private education) for what the country needs in the year 2030 in terms of jobs and investments, and to give instructions to the education sector to be structured from now on to comply with the requirements of Vision 2030.
Preparing cadres and qualifying the capabilities of dependable youth to build the country according to the requirements of future jobs so that we do not lag behind the world in responding to rapid changes, while showing that the next five years are short to continue the response.
What is required is a medium-term plan, in addition to thinking carefully about a strategic plan that responds to subsequent developments. https://alsabaah.iq/108661-.html
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