Iraq Economic News and Points to Ponder Wednesday Afternoon 1-1-25
Our Economic And Financial Vision For 2025 In Iraq
Dr. Aqil Jabr Ali Al-Muhammadi / Specialist in Finance and Development Affairs
It is clear that there is a structurally rooted problem in the methodology of evaluating and empowering the state in its sound tools and policies and how to sustain economic progress.
The reality of the situation requires reviewing and evaluating the structure of economic and financial decisions and creating a priority for the economic and financial feasibility of government decisions.
It is clear to observers, specialists and researchers in 2025 that the Central Bank of Iraq, despite all the efforts, decisions and diligent measures to overcome the dollar crisis and its transfers, is challenging its limits and monetary policies, specifically in the matter of canceling the platform and the upcoming challenges for correspondent banks, influence, size and extent of the safety of the mechanism of financial transfers, the approach to sustaining commercial and economic activity, the dominance of some Jordanian banks, and the available and expected solutions and scenarios, etc.
From our own point of view, regarding the subject of the correspondent banking market, if I may say so, we see that it is important for the Iraqi executive government to monitor and follow up on the methodology of the Central Bank’s return to the break-even point and not lose the compass of the course or channels of the dollar’s circulation and transfer in the Iraqi market inside and outside Iraq.
We believe that one of the strategic solutions for the executive government lies in forming a team to monitor and evaluate the mechanism of monetary policy and the dollar, which is its role in supervising, monitoring, evaluating, and not influencing/maintaining the independence of the Central Bank.
The specialized, expert and responsible figures and bodies should be transparent in relation to monetary and banking policy, and give greater flexibility in dialogue and accept opinions and other opinions, and not confiscate or neutralize opinions and proposals on the grounds of the privacy of monetary policy and focus on the priority of re-maintaining and restructuring monetary policy for the benefit of the cohesion of the economic and financial system in Iraq!!!
Regarding the budget price for the year 2025, the fiscal policy will face major challenges and perhaps financial shocks due to the possibility of fluctuations in the oil market and the possibility of facing a financial crisis in the second half of 2025, as indicated by financial reports from some international organizations.
Therefore, the budget price should be restructured as a precaution and a hedge, and a return to the hedge price to ward off internal and external risks and maintain a margin of financial safety. We propose hedge price limits and changing the budget price from $70 to a hedge budget price within the equilibrium limits ranging between $55-60 and in a manner that does not exceed the equilibrium price limits.
There should be a systematic shift from financing initiative policies (such as the Riyada initiative and the like) and others to an institutional structure for financing small, medium and micro enterprises, and building and establishing a specialized body to manage and finance small, micro and medium enterprises, and dealing with a modern financial and economic methodology and models according to sound foundations.
The importance of the state’s thinking shifting to the methodology of economic transformation and the foundations of the institutional digital economy, and establishing a tangible model of economic diversification through good investment of natural resources, gas, minerals, etc., and establishing the mechanism of the social market and the constructive institutional economy, and building a strategy for economic, developmental, and social transformation.
The importance of starting to establish a sovereign fund and financing it with innovative means and models outside the scope of the federal budget as new financial buffers and augmentation of the financial system in Iraq and sustainable financing means for development in Iraq. 298 views 12/31/2024 - https://economy-news.net/content.php?id=51456
Central Bank: Stop Working On The Electronic Platform
Banks Economy News – Baghdad The Central Bank of Iraq announced, on Wednesday, the suspension of the electronic platform mechanisms related to selling the dollar, while indicating the continuation of the mechanism for granting the dollar to travelers at airports.
The Deputy Governor of the Central Bank, Ammar Khalaf, said in a statement reported by the official news agency, and reviewed by "Al-Eqtisad News", that "the mechanism of work on the electronic platform related to foreign transfers has stopped working, but financing foreign trade continues through correspondent banks according to different mechanisms that are parallel to what is in effect in countries of the world."
He pointed out that "dollars will continue to be given to travelers at airports according to the approved mechanism, which is the best in limiting the traveler's access to dollars."
The Central Bank of Iraq announced today, Wednesday, that it had achieved a major accomplishment in foreign transfers, while indicating that it would continue to follow modern methods in managing monetary policy in Iraq.
A statement by the bank, received by "Al-Eqtisad News", stated that "the bank succeeded in adhering to its program related to the transition from foreign transfers via the electronic platform to the work of Iraqi banks through their foreign correspondent banks," noting that "this transition took place through stages that the foreign transfer process went through, starting with the window for buying and selling foreign currency and moving to the stage of the electronic platform for foreign transfers, and ending with operations to gradually enhance balances during the year 2024 and was fully achieved in the last week of this year."
He continued, "This achievement is a radical transformation in line with the best international standards and practices to achieve a stable and secure financial system, and this work has received international support and praise throughout its implementation stages,"
indicating that "the new transfer methodology is consistent with international practices followed in this field, which separate the responsibilities and duties of the Central Bank from the obligations, responsibilities and role of commercial banks.
From this standpoint, the Central Bank of Iraq will continue to enhance the balances of Iraqi banks with their correspondent banks in the US dollar, in addition to a group of other currencies, such as (the Indian rupee, the Chinese yuan, the euro, the UAE dirham, the Saudi riyal, and the Jordanian dinar)."
He added, "This achievement has enhanced the efficiency and safety of foreign transfer operations, and their transition to the method followed in all countries of the world, which will make Iraq enter a new phase in its financial relations regionally and internationally and enhance the government's orientations in expanding its economic relations and enhancing investment opportunities."
He pointed out that "the efforts in this important achievement came through a series of ongoing detailed technical procedures and agreements, and great support from the Iraqi government, and that the bank will continue to follow modern methods in managing monetary policy in Iraq, in line with its essential role in achieving financial stability, and its position among central banks in the region and the world, which will positively reflect on the confidence and support of the external financial sector of Iraq and international financial and economic organizations."
He explained that "through this, the management of the Central Bank of Iraq seizes this important opportunity to express its thanks and appreciation to everyone who contributed to achieving this great accomplishment, first and foremost the cadres of the Central Bank of Iraq, the banking sector in Iraq, and all international partners."
The statement concluded by saying, "The Central Bank of Iraq expresses its full readiness to support all Iraqi banks that work to develop and enhance their performance in the field of governance, compliance, and combating money laundering in a way that positively reflects on the confidence of international and regional banks in them to contribute to strengthening the Iraqi banking system and the Iraqi economy in general." 101 views 01/01/2025 - https://economy-news.net/content.php?id=51509
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