CBI - Deposit mechanism for the purpose of subscribing to the window - 12/29/2022

[ronscarpa]

 

Deposit mechanism for the purpose of subscribing to the window

Thursday - December 29, 2022

 

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To implement the objectives of the monetary policy of this bank during the next stage, it was decided to allow banks wishing to participate in the window of buying and selling foreign currency to buy any amounts in foreign currency and deposit them with this bank in accounts used for external transfer purposes only, and interest / returns are paid on those balances according to the mechanism described below:

 

1. The annual interest is calculated at 5% (five percent) after the end of each month on the basis of the lowest daily balance achieved by the bank during the days of the month in the account designated for external transfer purposes (transfers that will be executed through the foreign currency buying and selling window).

 

2. Cancellation of the mechanism for strengthening bank accounts abroad according to classification.

3. Cancellation of paragraph (D/3/Second) of the foreign currency buying and selling controls for the year 2021, according to which banks were previously instructed to deposit before a period of five working days from the date of executing the external transfer.

 

4. The bank transfer request abroad shall be executed within two working days from the date of submitting the transfer request.

 

5. The available balance in the account designated for external transfer purposes is evaluated in dollars according to the exchange rate of 1460 dinars.

 

6. The rate of response to external transfer requests submitted by the bank shall be 75% (seventy-five percent) or as determined by this bank of the available daily balance in the account designated for external transfer purposes.

 

7. The above mechanism does not include the documentary credits that are executed through the window (Dinars - Dollars), because it is implemented at a rate of 100% (one hundred percent) to encourage banks to finance foreign trade through documentary credits at a competitive exchange rate of (1465) dinars to the dollar, as This bank sells dollars to banks at a price of (1455) dinars per dollar instead of (1460) dinars per dollar, provided that the documentary credit is executed within two working days from the date of submitting the bank’s request.

 

8. The following formula is adopted for Islamic banks:

     A- The interest is calculated at the end of the month based on the number of days in which the bank was deposited during the relevant month based on the lowest balance achieved during the month in the account designated for the purposes of external transfers, and then subject to the specified interest rate of 5% (five percent).

     B- This bank, as an agent of the Islamic bank, determines the lowest balance deposited by the bank in the account designated for external transfer purposes during the days of the month in which the interest is to be calculated, and uses the balance to purchase a globally tradeable commodity (such as aluminum, palm oil, etc.) for the bank through one of the platforms of the global stock exchange, and then the bank buys it at a price higher than the purchase price, with a difference that represents the specified rate of return.

 

9. When the bank wishes to withdraw from the account designated for the purposes of executing foreign transfers, the amount required to be withdrawn is transferred to the bank's current account in the Iraqi dinar currency.

 

This decision shall be implemented in light of the aforementioned, as of 1/2/2023.