TNT – “Tidbits From TNT” Monday 11-13-2023

Tishwash:  Iraq plans to “neglect the US dollar” and Parliament proposes “diversifying foreign currency baskets”

The House of Representatives Finance Committee said today, Monday (November 13, 2023), that there is a necessary and important need to diversify the basket of foreign currencies in Iraq and not rely on the US dollar in commercial transactions.

Committee member Moin Al-Kazemi told “Baghdad Today” that “the basket of foreign currencies in Iraq must be diversified and not relied on the dollar in commercial transactions, whether external or even internal, as this reduces American dominance over the Iraqi economy.”

He added, “The Iraqi economic ground is ready and prepared to strengthen banks in various foreign currencies and not be limited to the US dollar, and there is a real trend by the monetary authority in this matter, and the coming days will witness various commercial transactions through the UAE dirham as well as the Chinese yuan and other currencies, and this will reduce demand.” On the dollar, and it will have an impact on reducing the dollar exchange rate in the parallel market.”

Last Saturday (November 11, 2023), a government source in Iraq said that officials from the Central Bank of Iraq held “intensive meetings” with American officials in Abu Dhabi in recent days to discuss external transfers to cover imports.

The source added, according to what was reported by the “official agency,” that “Iraq has strengthened its assets denominated in the yuan through the Singapore Development Bank to finance Iraqi trade and imports with China by about 12 billion dollars annually.”

The source stated that the oil-exporting country also moved to strengthen its assets in UAE dirhams and is negotiating to increase its assets denominated in euros to finance trade with the European Union, according to what was reported by the Iraqi news agency “Inaa.”

The source added that negotiations with the American side reached a set of decisions and mechanisms that contribute to facilitating procedures for foreign transfers related to imports through the foreign currency sales window.

He added, “It was agreed to enhance the advance balance of five Iraqi banks in their dollar accounts with Jordanian banks and transfers via JP Morgan Bank,” noting that “the problems related to the rejected transfers were resolved, and it was agreed that the rejection of transfers should be based on strong reasons.”

He continued: “There were also other meetings that brought together one of the Emirati banks, the Central Bank of Iraq, and the American side, to implement the mechanism for enhancing balances in the Emirati dirham for Iraqi banks,” indicating that “things are going well in this regard, as all technical details related to the issue have been resolved, and it is expected to begin.” The mechanism for enhancing balances in the UAE dirham during the next few days.”

He stressed that “there are serious negotiations that have reached their final stages to enhance the balances of some Iraqi banks in euros with UBAF Bank to finance trade with the European Union,” noting “an increase in the number of banks whose balances in Chinese yuan are being enhanced through the Singapore Development Bank.”

The source also reported that bank accounts had begun to be opened in Indian rupees for a number of Iraqi banks at the same correspondent, the Singapore Development Bank (New Delhi branch), and operations had actually been carried out to enhance the balance of two Iraqi banks as a first stage, and it is expected that this mechanism will contribute to financing Iraq’s imports from India, especially medicines and materials. Food, which is estimated at about $3 billion   link

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Shybaby:  Foreign currency deals bolster Iraqi banks amid no-confidence bid against central bank governor

 Iraq’s Central Bank (ICB) struck deals with foreign nations to support Iraqi private banks in foreign currencies, coinciding with lawmakers’ no-confidence efforts against ICB’s governor amid currency pressure from the US dollar.

ICB and US officials have reached a deal to strengthen the reserves of 10 Iraqi banks with the US dollar after detailed discussions in Abu Dhabi, the state-run Iraqi News Agency reported on Sunday, 12 November, citing governmental sources within the meetings. 

“After recent discussions between the Iraqi Central Bank and American representatives, ten banks can now strengthen their reserves in US dollars—five through Citi Bank and five via JP Morgan,” INA reported.

Iraq imports almost 95 of its needs through foreign trade using foreign currencies.

“Furthermore, the number of banks allowed to enhance their reserves in the Chinese Yuan through the Singapore Development Bank will increase to 13 banks. Two banks have already fortified their accounts in Indian Rupees with the Singapore Development Bank,” the agency added. 

It also clarified that several developments have unfolded in banking collaboration between Iraq and other countries; notably, issues with rejected transfers have been resolved. It also revealed a promising mechanism to boost balances in Emirati Dirhams for Iraqi banks is “imminent”.

ICB also makes serious negotiations to enhance Iraqi bank balances in Euros, and more banks are reinforcing their balances in the Chinese Yuan and Indian Rupees for Iraqi banks, signalling a strategic move to finance imports, especially in pharmaceuticals and food items.

ICB recently decided that Iraqi private banks can import foreign currencies via commercial flights, a controversial step that backfired on its governor, as Iraqi lawmakers and legal experts considered it unconstitutional. 

Al-Alaq is facing a parliamentary motion to remove him from his position due to the decreasing value of the Iraqi dinar in exchange for the US dollar in the parallel markets.

 Since assuming office, economic experts believe that the ICB governor has failed to resolve the devaluation of the ID in exchange for the dollar crisis despite measures taken since his appointment.

Iraq’s cabinet approved a currency revaluation on 7 February and set the exchange rate at 1,300 dinars per US dollar. The Central Bank of Iraq (CBI) also imposed several measures to boost the dinar and prevent the outflow of US dollars outside the country, especially to Iran and Syria, which are under US sanctions. 

Despite the official rate of the dinar, a US dollar still sold at around 1,620 in the currency exchange markets. The sharp drop in the dinar’s value plunged local markets into further recession, with prices of every essential goods soaring daily.

Iraq secures foreign currency deals to enhance trade (newarab.com)

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Tishwash: The President of the Republic: The government is determined to confront and curb corruption

The President of the Republic, Abdul Latif Jamal Rashid, confirmed that the government is determined to confront and curb corruption and proceed with the reform process, while urging Saudi businessmen to invest in the encouraging opportunities in Iraq and enter the Iraqi market.

The Media Office of the President of the Republic stated in a statement received by the Iraqi News Agency (INA), that “President of the Republic, Abdul Latif Jamal Rashid, met today, Sunday, with the Saudi Minister of Commerce, Chairman of the Saudi-Iraqi Coordination Council, Majid Al-Qasabi, and a group of Saudi businessmen.”

During the meeting, according to the statement, the President stressed the importance of cooperation and coordination between Iraq and Saudi Arabia in the commercial, economic, industrial, energy and environmental fields, and benefiting from the expertise, experiences and capabilities of the two countries.

The President of the Republic pointed to the depth of relations between the two countries, and the religious, national, social and cultural ties between the two peoples, praising Saudi Arabia’s role in the region and its keeping pace with the development and progress the world is witnessing.

The President reviewed the complex and difficult circumstances that Iraq has experienced over the past years, including wars, sanctions, and terrorism, and the major effects they had on infrastructure and services, indicating that “today the country is witnessing a different reality in terms of security stability, service provision, and the start of strategic and investment projects.”

He added,“ The recent elections resulted in the formation of a government that represents all Iraqis, as it developed an important program that made it one of its priorities to establish security and stability in the country, and the government is determined today to confront and curb corruption and proceed with the reform process.” The President urged Saudi businessmen to invest in the encouraging opportunities in Iraq and enter into
… The Iraqi market, pointing out that “the government is determined to provide facilities to investors and businessmen in order to encourage them and benefit from investment opportunities in Iraq.”

In turn, the Saudi minister affirmed the Kingdom’s keenness to maintain and develop relations between the two countries, and expand the horizons of cooperation to serve common interests, pointing to social ties. And the historical link between the Iraqi and Saudi peoples.

He added, “Businessmen in Saudi Arabia, through the Saudi-Iraqi Coordination Council, are making unremitting efforts to overcome some of the procedures, and there is communication and meetings held between Iraqi and Saudi businessmen in order to enhance cooperation between the two sides, expressing his aspiration to develop trade exchange.” “And creating a true partnership that contributes to the progress and prosperity of the two countries.”

 The Ambassador of the Republic of Iraq to Saudi Arabia, Safia Al-Suhail, expressed her thanks to His Excellency the President for the meeting and his keenness and interest in developing the commonalities between the two countries, stressing that “Iraqi-Saudi relations have witnessed a tangible development, which reflects the will of the two countries and their serious desire to build distinguished relations that serve the two brotherly peoples and the peoples of the region.”

The meeting was attended by His Excellency Deputy Prime Minister and Minister of Foreign Affairs, Fuad Hussein, and Member of Parliament, Jabbar Freih Al-Kinani.   link