“Tidbits From TNT” Friday Morning 1-3-2025

TNT:

Tishwash:  Iraqi Central Bank Streamlines International Transfers

The Central Bank of Iraq (CBI) has announced the successful transition of external transfers from an electronic platform to direct operations by Iraqi banks through their international correspondent banks.

According to a CBI statement, this milestone, fully achieved at the end of December, aligns with global best practices, promoting a stable and secure financial system.

Key highlights include:

Modernisation Journey: Transfers evolved from a currency sale window to an electronic platform and now to correspondent banking systems.

Diverse Currency Support: Iraqi banks can now enhance balances with correspondent banks using various currencies, including USD, INR, CNY, EUR, AED, SAR, and JOD.

Global Integration: The system improves efficiency and aligns Iraq's financial operations with international standards, boosting regional and global financial relationships.

Investment and Trust: This achievement strengthens Iraq's appeal for investment and enhances international financial confidence.

The CBI attributed this progress to extensive technical planning, governmental support, and the contributions of its staff, Iraqi banking institutions, and international partners.

The bank reaffirmed its commitment to fostering good governance, compliance, and anti-money laundering measures, further solidifying Iraq's financial system.  link

Tishwash:  After the electronic platform stopped...Answering questions from Iraqi circles about the new dollar mechanism

Many citizens have raisedIraqisQuestions about the new trading mechanismDollarinIraqHow to withdraw or buy it after stoppingOfficialTo create an electronic platform.

He saidDeputyThe Governor of the Central Bank, Ammar Khalaf, said yesterday 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 around the world."

 Many citizens wondered about the news of the platform that was established.SumerianNews published on the social networking site "Facebook", about the electronic platform and its work, and what will happen to the dollar, and whether it will witnessIraqA new rise in currency exchange rates.

One citizen said via the comment feature: "What is meant by the electronic platform? Can someone explain?", while another replied that "the blockade will return to Iraq and the exchange rate will be at least 250 thousand dinarsIraqiFor $100.”

Another asked about “the continued arrival of foreign remittances toIraqAnd giving the currency to travelers," while another pointed out that "unemployment will return and food prices will quadruple from their normal levels and famine will return to Iraq."

Others praised the decision to stop the electronic platform, considering it "an effective government achievement that will be beneficial in succession and a transformation process that enhances the economic role and prepares for investment opportunities with complete confidence, and that the government is activating the supervisory role over the markets and exchanges and dealing in the dinar only to raise the value of the Iraqi dinar."

Another pointed out that "the platform was a front for theftDollarThus, imposing control through financial transfer by the bank will contribute to balancing the market and controlling the rise of the dollar,” and another supported him by saying that “this step may have several reasons, such as:

1- Controlling the dollar exchange rate: trying to stabilize the priceDollarIn front of the dinarIraqiBy reducing the flowDollar

2-Preventing dollar smuggling: If there are indications thatDollarIt is used in smuggling operations or there is an inflation in demand for it due to illegal purposes.

3-Strengthening the local economy: reducing dependence onDollarSupporting the local currency by reducing tradingDollarIn the markets.

Possible outcomes: higher prices.DollarOn the black market if there are no alternatives to meet demand. Impact on traders and businesses who depend onDollarIn imports, which may lead to higher prices for imported goods.

Tightening financial controls to try to prevent fraud and circumvention of policies. Therefore, the effects will depend on how this decision is implemented and the extent of alternative plans to provideDollarFor the commercial and service sector.

"Travelers' Dollar"
It is worth noting that "the Central Bank explained that grantingDollarFor travelers, it continues at airports according to the approved mechanism, which is the best in limiting the occurrence ofDollarFor the traveler, noting that "this decision is part of a series of reforms aimed at facilitating financial procedures and stimulating the economy."

What is the "electronic platform"
? The electronic platform for money transfers is a mechanism adopted to ensure the regulation of foreign money transfers and limit manipulation of exchange rates. It works to document commercial operations and transfer funds by banks and financial companies, ensuring more effective control over hard currency flows in and out of the country.

Will the cancellation of the platform affect the dollar price?
The impact of the cancellation of the platform on the priceDollarIt will be reflected in prices as follows:

1- Increased demand forDollarIn the black market, in the absence of an electronic platform, demand may increase.DollarIn the black market due to the absence of control mechanisms, which leads to high exchange rates outside official channels.

2- Weak confidence in the dinar, as canceling the platform may weaken confidence in the Iraqi dinar, especially if effective alternatives are not put in place to ensure market stability. Weak confidence means that citizens and investors may withdraw their money in dinars and transfer it toDollarAs a safe haven.

3- The impact of smuggling and money laundering, as canceling the platform may cancel strict control over dollar smuggling operations, and smuggling and money laundering practices may expand, which increases the demand forDollarSignificantly and affects the central bank's reserves.

4- The market depends on supply and demand. With the cancellation of the platform, the currency market may become more affected by direct supply and demand. This may lead to severe fluctuations in the exchange rate, especially in light of unstable economic and political conditions.

Will the dollar rise?

The government and the central bank can rely on other control tools such as strengthening the role of local banks, imposing strict restrictions on foreign transfers, activating alternative control tools, or pumping more dollars into the market to meet demand and maintain price stability. Investment can also be encouraged and reliance on foreign currencies reduced, to relieve pressure onDollarAnd strengthening the dinar, all these measures can maintain pricesDollar.   link

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Tishwash:  Al-Sudani confirms that the government has taken practical steps to diversify the economy

Prime Minister Mohammed Shia al-Sudani confirmed today, Thursday, that the government has put in place clear practical steps aimed at diversifying the Iraqi economy away from total dependence on oil revenues.

Al-Sudani said in a speech during the opening and launch of several projects in the oil sector in Baiji district in Salah al-Din Governorate, which was followed by the / Al-Maalouma / agency, that “the government has worked since the first days of assuming its duties to reconsider the philosophy of the Iraqi economy based on rentierism, and to put in place practical steps, not theoretical ones, in the matter of diversifying the economy."

He pointed out that "Iraqi competencies have begun to manufacture and establish units in refineries, which gives value to the product and drives market stability. A country that produces more than 4 million barrels per day cannot continue to import oil and gas derivatives."

He added: “We have started several strategic projects that are being implemented for the first time in the country and in the history of the oil industry, and we have made great strides in solving the problems, especially in the issue of gas flaring, through The contracts and agreements concluded, and we have set a ceiling not exceeding 2028 to stop gas flaring and a zero percent rate in flaring associated with gas, and we are continuing to promote the patches and fields for free gas.”

He pointed out that "the projects that were opened and construction was launched today are important to achieve a shift in the oil industry," directing "the Ministry of Oil to complete the studies for the petrochemical project and the FCC project in Baiji."

He announced "a plan to make Baiji the largest oil industrial city in Iraq and the region," noting "work to adopt international standards and environmentally friendly quality."

He pointed out that "work is underway to complete the strategic integrated southern project, which is being implemented for the first time in the field of oil development and gas investment, and to establish a power station, refinery and petrochemical plant in one place."  link

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