Iraq news now "Wall Street Journal" reveals the scenes of the Fed's tightening on the dollar in Iraq

[6ly410]

MP identifies reasons for the rise in dollar prices and talks about government measures

Posted 59 seconds ago

 

MP identifies the reasons for the rise in dollar prices and talks about government measures - Iraq news (iraqakhbar-com.translate.goog)

 

News Source /Al-Sumaria Channel

Al-Husseini said in an interview with the program (Balmkhzil) broadcast by Al-Sumaria TV, that "many independent MPs support this government, but so far its features have not been seen because of a number of internal and external challenges."

 

He added that "the internal challenges are the currency auction and forged invoices to sell them, which most banks interfere with, adding: "The foreign ministry lies in the enormous pressure on the government by some countries, because of which the draft budget has not yet come to parliament.”

 

"The government's measures are a small part of the solution to this issue," he said, noting that "the government of the current Prime Minister, Mohammed Shia al-Sudani, suffers from pressures, mostly political, and the current situation is similar to The time of the terrorist al-Qaeda and ISIS, as it targets the Iraqi ideology and affects the main nerve of Iraq, which is the economy.

He explained that “the current crisis is an opportunity to get rid of crises in general by reorganizing the sale of currency, organizing banks and their work, and the government must exploit them,” stressing that “if the government is serious in dealing with the dollar crisis, it must not make America use the pressure card that it has through the dollar and the economy.” ". Continued..

[6ly410]

In a televised statement: Al-Maliki: America uses the dollar as a weapon. The presence of foreign advisory and training forces benefiting Iraq is agreed upon.

Saturday 21 January 2023 21:32 |PoliticalViews: 68

In a televised statement: Al-Maliki: America uses the dollar as a weapon. The presence of foreign advisory and training forces benefiting Iraq is agreed upon. (ninanews-com.translate.goog)

Baghdad /Nina/ The head of the State of Law Coalition, Nouri al-Maliki, said that America is using the dollar as a weapon and is monitoring the situation in Iraq. Al-Maliki said in a televised statement: The concern about the dollar .. It's justified. He expressed the fear that we will reach the stage of deterioration of the Iraqi currency due to the lack of control over the movement of the dollar.

He added: There are irregularities in some of the remittances of Iraqi traders, and this affects the Iraqi stock of the dollar, and the current crisis has a political side, and there are those who are waiting for the government and trying to destabilize it using it thedollar note.
Al-Maliki explained: The Central Bank is required to control the movement of the dollar and spare Iraq a real crisis and no solution to the dollar crisis except by controlling the dollar and understanding with the American side and the crisis is old, but it exploded in the era of Sudanese.
He continued: Some local and international parties did not like the formation of the current government and the results of its work, and the dollar crisis lies in its depth in remittances, and there is something of political intent in the dollar crisis, although it is a realistic problem.

Al-Maliki: I had a prior and clear objection regarding the devaluation of the Iraqi dinar, and the concerned authorities warned of the repercussions of the devaluation of the dinar, but they did not remedy the crisis.
The government is able to control the dollar crisis, but there are no remedies so far.
Al-Maliki pointed out: The survival of foreign forces is not the problem of the framework alone, but it is a political and national problem, and the parliament was clear to remove foreign forces, and the decision was unanimous, and there are currently no Foreign military forces in Iraq with armored vehicles and combat equipment.

The presence of foreign advisory and training forces that benefit Iraq is agreed upon and the presence of foreign military combat forces is very dangerous.
Al-Maliki said: The Sudanese government must be evaluated after the end of the first 100 days, and the coordination framework is the one who formed this government and it is the one who bears its responsibility.

[NEPatriotsFan1]

Man, there is a ton of talk about exchange rates! Hopefully the pressure is on and the pressure cooker is about to blow

[6ly410]

l-Maliki: Smuggling is behind the dollar crisis. There is no solution except through an understanding with Washington - urgent

Baghdad Today

Al-Maliki: Smuggling is behind the dollar crisis. There is no solution except through an understanding with Washington - urgent

•  5 minutes ago
•  
• Baghdad Today-Baghdad

The leader of the State of Law Coalition, Nouri al-Maliki, said on Saturday that the dollar crisis is linked to irregularities, including smuggling and manipulation by some banks and traders, while he considered that the only solution to the crisis is understanding with the American side.

Al-Maliki said in televised remarks followed by "Baghdad Today", that "America uses the dollar as a weapon and is monitoring the situation in Iraq," noting that "there are irregularities in some transfers of Iraqi traders and this affects the Iraqi stock of the dollar."

He pointed out that "there is no solution to the dollar crisis except with understanding with the American side," stressing that "the dollar crisis is linked to some violations, including smuggling and manipulation by some banks and traders."

He stressed that "the government of Sudan must be evaluated after the end of the first 100 days."

 

 

[6ly410]

Al-Maliki: Smuggling is behind the dollar crisis. And there is no solution except by understanding with Washington

Al-Maliki: Smuggling is behind the dollar crisis. There is no solution except with understanding with Washington » Baghdad Today News Agency

 

Economy | Today, 21:44 | 

    

 

 

Baghdad Today-Baghdad

The leader of the State of Law Coalition, Nouri al-Maliki, said on Saturday that the dollar crisis is linked to irregularities, including smuggling and manipulation by some banks and traders, while he considered that the only solution to the crisis is understanding with the American side.

Al-Maliki said in televised remarks followed by "Baghdad Today", that "America uses the dollar as a weapon and is monitoring the situation in Iraq," noting that "there are irregularities in some transfers of Iraqi traders and this affects the Iraqi stock of the dollar."

He pointed out that "there is no solution to the dollar crisis except with understanding with the American side," stressing that "the dollar crisis is linked to some violations, including smuggling and manipulation by some banks and traders."

He stressed that "the government of Sudan must be evaluated after the end of the first 100 days."

 

[6ly410]

Derasat: Washington's arguments for raising the dollar are flimsy and trying to bring down the government

• Today 18:40

Derasat: Washington's arguments for raising the dollar are flimsy and are trying to bring down the | government Information (almaalomah-me.translate.goog)

Information/ Private.

The head of the Al-Raffd Center for Studies, Abbas Al-Jubouri, said on Saturday that the United States of America is trying to overthrow the current government and mobilize the people against it through the dollar note, and the arguments used by Washington to raise the dollar are "flimsy", he indicated that the latter is unable to stand in the face of the state project with Shiite rule.

Al-Jubouri said in an interview with Al-Maalouma that "America makes a certain goal for itself and seeks to achieve it, when it brought ISIS, it did not succeed in occupying and overthrowing Iraq and tried as much as possible to stand in the face of internal developments.”

He added: "We go back a little to 2003 when I entered Iraq with an illegal justification and it was a barbaric invasion that destroyed infrastructure," pointing out that "Washington did not fulfill its promises and did not have any plan for the reconstruction of Iraq.”

Al-Jubouri pointed out that "when America reached a certain stage and felt that the current political forces have become empowered and have the will and decision, they came in other ways after they failed in the soft and military war inside Iraq and turned their eyes towards the dollar.”

The director of the Rafd Center for Studies explained that "the Federal Bank in America is the one who controls the supply of dollars in the markets using flimsy arguments represented in the existence of debts incurred by Iraq and in the event of unleashing and funds to the Central Bank of Iraq, countries will demand their debts.

He pointed out that "America is trying to overthrow the government and mobilize the people against it and finally overthrow it because it is unable to manage the state project, especially when the prime minister is from the Shiite house."

Earlier in the day, the State of Law Coalition considered the dominance of the United States of America in Iraq to shift from military to socio-economic, while stressing that Washington and the Gulf countries are putting great pressure on the Iraqi government with the dollar file .

[HowieC]

You know Maliki is having a temper tantrum. No more US dollars to hoard. Come on Iraq, add value to your own currency, America is not feeding Iranian interest with USD. The buck has stopped.

[6ly410]

 

[6ly410]

A leader in the framework: The Americans raised the dollar in order not to hold Al-Kazemi accountable - urgent

Leader in the framework: The Americans raised the dollar in order to hold Al-Kazemi accountable - Urgent » Baghdad Today News Agency

 

Economics / Politics | Today, 22:40 | 

    

 

Baghdad Today-Baghdad

The leader in the coordination framework, MP Waad Qaddo, considered the dollar crisis as "not behind speculators", but rather American pressure aimed at three conditions, namely not to smuggle currency and not to hold Al-Kazemi accountable and other things related to the resistance factions, which we cannot implement.

Kaddu told (Baghdad Today) that "the Americans have set several conditions, including not to smuggle currency to ensure the return of planes carrying daily dollars to Baghdad with the same number of previous after the flights were reduced by half," noting that "the conditions are not to hold Al-Kazemi accountable for any issue in addition to ensuring that currency is not smuggled to some countries."

Kaddo considered this condition as a "pretext", because "Iraq imports 99% of its needs from abroad, and that most of those needs are from Turkey and Iran, and the annual purchase amount is estimated at $ 30 billion annually, which is more than half of Iraq's annual income from the dollar from the sale of oil."

Accordingly, "it is normal for the dollar to go to Tehran and Ankara by virtue of our purchase of goods, and this is not smuggling as claimed by (the US occupation)," he said.

"The Americans are occupiers of Iraq, not by the presence of soldiers on the ground, but by controlling our economy, Iraq is still under a UN resolution that he described as unjust, including the imposition of a blockade on us since the nineties of the last century, and this matter caused an international decision that forces us to be the amounts of selling oil in dollars do not come to Iraq directly from the countries to which we sell oil, but go to the US Federal Bank, which is the one who transfers the dollar to us."

He considered that "this measure has captured the American side, and therefore we will not be silent on this matter, as the Americans respond from the government some points, provided that the flow of dollars from them is re-flowing with regard to the resistance factions, and this is something we do not accept."

Regarding the campaigns carried out by the security forces in Baghdad regarding the arrest of some bankers accused of manipulating dollar prices, Qado considered that "this matter is useless, as those responsible for the rise of the dollar are the Americans, and the parliament should host the governor of the Central Bank for the purpose of informing the representatives of the people of the truth of the matter and solutions."

[6ly410]

For several reasons

Iraqi analyst from America: Solving the dollar crisis will not be easy and soon

2023.01.21 - 22:03

Iraqi analyst from America: Solving the dollar crisis will not be easy and soon (nasnews.com)

 

 

  

Baghdad - Nas  

Riyad Mohammed, an Iraqi investigative journalist based in the United States, said that the crisis of the devaluation of the Iraqi dinar against the dollar is the result of several factors and that the solution to this crisis will not be easy or soon.  

  

 

  

  

Mohammed added in an analytical article followed by "NAS" (January 21, 2023): What happened - which everyone knows - is that the window of selling currency "was exploited by the corrupt through banks controlled by the ruling parties to smuggle dollars or to launder corruption money."  

  

"Two months ago, the scandal of the theft of the century exploded and led to the conviction of the US Reserve Bank - where Iraqi oil money is deposited - that it is time to curb this financial bleeding and the continuous smuggling of neighboring countries, including Iran," he said.  

  

According to the analytical article, "The US Federal Reserve Bank has imposed vetting measures to ensure that whoever buys dollars does so for real and legitimate economic need and not just smuggling or laundering corruption money. It also prevented four banks involved in smuggling and money laundering from buying dollars. This coincided with the crisis of the decline of local currencies in a number of neighboring countries - for reasons related to the economies of these countries and because the dollar itself is rising globally after raising the interest rate several times - such as Iran, Turkey, Syria, Egypt and Lebanon, this led to more pressure on the dollar in Iraq and the result of all that I listed is that the currency selling window is now selling about a quarter of what it was selling months ago.  

  

The Iraqi investigator provided answers to the most important frequently asked questions about America's relationship with the Iraqi dollar as follows:  

  

There are those who ask: Why do we put Iraq's money with an American bank in the first place?  

  

The answer is: This ensures that Iraq's assets are protected from numerous legal claims – some related to the repercussions of the invasion of Kuwait and some related to terrorism – that may be able to freeze or even confiscate these assets.  

  

Some say: Why do we use the dollar in the first place? Why not use the euro or the Chinese yuan, for example?  

  

The answer is: the dollar is the most important currency and using a currency like the euro is fraught with quite a few risks, especially since the euro itself is in trouble – even the pound sterling depreciated during the short Liz Trus era. The yuan is a currency that the Chinese government is keen to keep depreciating to ensure that Chinese goods continue to flow to the world at competitive prices."  

  

"There is another factor that many overlook, which is that we in Iraq, individuals and institutions - including our government and private financial institutions - are backward and isolated from the world in terms of financial and banking matters," Riad Mohammed said. He cited as an example: If every Iraqi had a bank account in a bank that respects his customers, Iraqis would be able to obtain dollars, each according to his bank, without the need for "nonsense selling currency."  

  

In conclusion, the Iraqi investigator concluded that the crisis is complex and includes the corruption of the parties in power, the inability of the judiciary and the government to confront this corruption, the collapse of local currencies in neighboring countries, and the almost comprehensive Iraqi banking and economic backwardness, "all of this created a black hole that swallowed the dollar!"  

  

Regarding the proposed solutions, Mohammed said, "The solution is in the fight against corruption - and this is something that has become clear that it is almost impossible, according to him, in addition to the need to carry out comprehensive financial and economic reform to end the underdevelopment and banking and economic isolation experienced by Iraqis, and this is something that does not happen overnight."  

  

  

[southbeach]

2 hours ago, 6ly410 said:

Derasat: Washington's arguments for raising the dollar are flimsy and trying to bring down the government

• Today 18:40

Derasat: Washington's arguments for raising the dollar are flimsy and are trying to bring down the | government Information (almaalomah-me.translate.goog)

Information/ Private.

The head of the Al-Raffd Center for Studies, Abbas Al-Jubouri, said on Saturday that the United States of America is trying to overthrow the current government and mobilize the people against it through the dollar note, and the arguments used by Washington to raise the dollar are "flimsy", he indicated that the latter is unable to stand in the face of the state project with Shiite rule.

Al-Jubouri said in an interview with Al-Maalouma that "America makes a certain goal for itself and seeks to achieve it, when it brought ISIS, it did not succeed in occupying and overthrowing Iraq and tried as much as possible to stand in the face of internal developments.”

He added: "We go back a little to 2003 when I entered Iraq with an illegal justification and it was a barbaric invasion that destroyed infrastructure," pointing out that "Washington did not fulfill its promises and did not have any plan for the reconstruction of Iraq.”

Al-Jubouri pointed out that "when America reached a certain stage and felt that the current political forces have become empowered and have the will and decision, they came in other ways after they failed in the soft and military war inside Iraq and turned their eyes towards the dollar.”

The director of the Rafd Center for Studies explained that "the Federal Bank in America is the one who controls the supply of dollars in the markets using flimsy arguments represented in the existence of debts incurred by Iraq and in the event of unleashing and funds to the Central Bank of Iraq, countries will demand their debts.

He pointed out that "America is trying to overthrow the government and mobilize the people against it and finally overthrow it because it is unable to manage the state project, especially when the prime minister is from the Shiite house."

Earlier in the day, the State of Law Coalition considered the dominance of the United States of America in Iraq to shift from military to socio-economic, while stressing that Washington and the Gulf countries are putting great pressure on the Iraqi government with the dollar file .

If the Iranian regime weren’t so demon possessed, the US Treasury and Fed could skip this preliminary process.

 

 

 

[Bama Girl]

Oh, now this crook comes out with some common sense. If not for him. ISIS would not have destroyed the country and Shabibi would have stayed Governor of CBI long enough to help navigate Iraq through the the processes with UNAMI, IMF and World Bank. AND I firmly believe we would already have seen the Dinar with much more value than it is today, Dang these Maliki articles ticked me off 😡😡😁

[6ly410]

 

[6ly410]

 

[yota691]

Parliamentary Finance: America waged an economic war against the Sudanese government through the dollar

• Today 16:37

Information / Baghdad..

A member of the Parliamentary Finance Committee, Mueen Al-Kazemi, accused, on Sunday, the US Federal Bank of declaring an economic war on the government, indicating that the government is required to work to end US guardianship over Iraqi oil funds.

Al-Kadhimi said in a televised interview, followed by Al-Maalouma, that "Iraq sells oil and its money goes directly to the US Federal Bank within Chapter Seven to conduct control over that money."

He added that "the need for the seventh item disappeared after the departure of the dictatorial regime in the country and the announcement of the end of the economic blockade on Iraq, to the fact that America insists on granting Iraq funds through the US federal funds," calling on "the government to work to end that compulsory tutelage."

He explained, "The economic war is clear against the government of Muhammad Shia'a al-Sudani, as it refrained from sending oil-related funds in the form of a weekly defense under the pretext of making adjustments, which caused a rise in dollar prices in the market." Ended 25 d

[yota691]

Baghdad Trade: Arbitrary dealings with dollar dealers is not correct, and the government did not consult us

2023-01-22 04:04

 

 

Shafaq News/ The Baghdad Chamber of Commerce criticized, on Sunday, "arbitrary dealings" with dollar dealers, and what it considered "not correct", showed that the government did not consult it about its financial policy.

The head of the Chamber of Commerce, Firas Al-Hamdani, said in an interview with Shafaq News agency; That "the decision to raise the price of the dollar against the Iraqi dinar is a government decision after fixing it in the budget, just as the dollar's rise more came after a penalty by the US Federal Bank, which means American intervention in the dollar's exchange rate policy, given that Iraq was opening non-fundamental credits according to certain criteria, as a result they were prevented Dealing with Iraq except with fundamental papers, as a result, negatively affected the dollar and led to its rise.

 

 

 

And he continued, "As a chamber of commerce, neither the Iraqi government nor other parties took our opinion, such as advice and consultation," stressing that "any arbitrary dealing with a merchant is not correct, especially today we are in the country of democracy and the world is progressing, and therefore it is not possible to prosecute dealers in dollars because dealing with it is not prohibited."

 

He added, "The speculators in the market are not merchants, but rather big heads of corruption who represent some of the poles of the influential parties, calling on the government to reconsider financial policy and the market, which will inevitably lead to its stability."

 

It is noteworthy that the exchange rate of the dollar increased significantly during the current period, which amounted to more than 160 thousand dinars compared to 100 dollars at a time when the government was unable so far to stop the deterioration of the Iraqi dinar, which led to the government's process of closing the exchange shops in the Al-Kifah and Al-Harithiya Stock Exchange and arresting some people whom she described as "speculators".

[yota691]

Economist Safwan Qusay: The US Federal Bank is trying to prevent currency smuggling from Iraq

 

 

- 01-21-2023 08:52 PM - Number of readings: 18022

 

 

Qusai: The US Federal Bank is trying to prevent currency smuggling from Iraq

Dijla satellite channel

3.1K views  1 day ago

[6ly410]

U.S. Federal Reserve imposes tight controls on Iraqi banks’ transactions

• Amr Salem
•  January 22, 2023
•  U.S. Federal Reserve imposes tight controls on Iraqi banks’ transactions - Iraqi News

Packs of U.S. dollars and Iraqi dinars. Photo: Pukmedia

Baghdad (IraqiNews.com) – In light of the difficult economic crisis that Iraq is going through, especially with the rise in the exchange rate and the subsequent repercussions that greatly affected the lives of citizens, U.S. officials revealed that the depreciation of the Iraqi dinar and the rise in the prices of foodstuffs and imported goods is caused by the remarkable change in the policy adopted by the U.S. Department of the Treasury and the Federal Reserve System in New York towards Baghdad.

U.S. and Iraqi officials said that the New York Federal Reserve System began enforcing tighter controls on international dollar transactions by commercial Iraqi banks in November in a move to curtail money laundering and the illegal siphoning of dollars to Iran and other heavily sanctioned Middle East countries, the Wall Street Journal reported.

Last November, the Federal Reserve System began imposing stricter controls on the transactions of Iraqi commercial banks, which had been operating under less stringent rules since the U.S. invasion in 2003.

The Federal Reserve System stressed that the time has come to bring the Iraqi banking system into compliance with international money transfer practices.

Since the adoption of the new procedures, 80 percent or more of daily dollar transfers to Iraq have been banned, noting that these transactions used to be more than 250 million USD per day.

The value of the Iraqi currency has fallen by up to 10 percent against the U.S. dollar, which led to a sharp rise in the prices of imported goods, including basic commodities such as eggs, flour and cooking oil.

U.S. officials confirm that the strict rules for electronic dollar transfers by Iraqi private banks were not surprising to officials in Baghdad, but rather have been implemented jointly since last November, after two years of discussions and planning between the Central Bank of Iraq and U.S. authorities.

 

[6ly410]

 

[6ly410]

Iraqi government struggles to control US dollar price 

Iraqi government struggles to control US dollar price  - Al-Monitor: Independent, trusted coverage of the Middle East

The Iraqi economy is suffering from the US dollar's rise as a result of smuggling dollars outside of Iraq.

An Iraqi policeman displays a 10,000-Iraqi dinar banknote bearing an image of Mosul's iconic leaning minaret on June 22, 2017, in Mosul. - AHMAD AL-RUBAYE/AFP via Getty Images

January 21, 2023

As Prime Minister Muhammad Shia al-Sudani entered Basra Stadium on Thursday to attend the final game of the 25th Arabian Gulf Cup, hundreds of Iraqis chanted, “Bring the dollar price down.” 

The exchange rate of the US dollar to the Iraqi dinar reached 1:1,659 Friday, the highest price since 2004. 

The rise in the dollar price began shortly after the new government came to office in late October of last year, During the previous government, the rate was stable at between 1,450 to 1,470 dinars to the dollar.  

 

Several reports attribute the rise to the "smuggling" of US dollars — or illegal transfers — from Iraq to Iran during the term of the new government, which was formed by a majority of militias and political groups close to Iran.

An Iraqi source told Al-Monitor that US officials have brought this issue up several times with Prime Minister Sudani, most recently by White House Coordinator for the Middle East and North Africa Brett McGurk last Monday.  

The US Ambassador to Iraq, Alina Romanowski, has been in close contact with the prime minister, holding more than a dozen meetings since the government came to power, and the exchange rate was always at the top of her list.  

In order to address the issue, the Iraqi central bank banned four Iraqi banks from using US dollars: Al-Ansari Islamic Bank for Investment and Finance, Al-Qadhaf Islamic Bank for Finance and Investment, Asia Iraq Islamic Bank for Investment and Finance, and the Iraqi Middle East Investment Bank. 

The central bank also announced that it is auditing several other banks and financial organizations in an attempt to stop the illegal use of dollars in Iraq.  

Iran is facing a severe economic crisis due to sanctions, with the US dollar's value against the Iranian rial reaching a peak recently of 43,000 rials to the dollar, the highest rate in history. 

Iraq imports gas and electricity from Iran regularly, which is exempt from US sanctions. However, Iraq is not allowed to transfer money to Iran. Thus, Iraq transfers the gas and electricity payments in Iraqi dinars to accounts in Iraqi banks owned by Iranians.  

Yet given the current circumstances, Iran needs US dollars to control rising price and stabilize the economy. 

The smuggling of US dollars, however, is not limited to Iran. Iraqi militias are reportedly smuggling currency as well to Syria and Turkey.  

 

Read more: https://www.al-monitor.com/originals/2023/01/iraqi-government-struggles-control-us-dollar-price#ixzz7r8so99vv

[6ly410]

Al-Monitor: Americans have raised the issue of the dollar to the Sudanese more than 10 times

2023.01.22 - 20:36

Al-Monitor: Americans have raised the issue of the dollar to the Sudanese more than 10 times (nasnews.com)

 

  

Baghdad - Nas  

Al-Monitor quoted an Iraqi source as saying that US officials have raised the dollar issue several times with Prime Minister Mohammed Shia al-Sudani, most recently by White House coordinator for the Middle East and North Africa Brett McGurk last Monday.  

  

  

  

According to a report by the newspaper followed by "Nas" (January 22, 2023), the US ambassador to Iraq, Alina Romanovsky, has been in close contact with the prime minister, and has held more than a dozen meetings since the government came to power, and the exchange rate has always been at the top of its list.  

  

She added: "To address the problem, the Central Bank of Iraq banned four Iraqi banks from using the US dollar, and the Central Bank announced that it is auditing the accounts of several banks and other financial institutions in an attempt to stop the illegal use of the dollar in Iraq."  

  

Iran needs the U.S. dollar to control rising prices and stabilize the economy, however, U.S. dollar smuggling is not limited to Iran.  

  

According to the newspaper, "Iraqi militias are smuggling currency to Syria and Turkey."  

  

[6ly410]

Middle East Eye: US campaign against dollar smuggling triggers salary payment crisis in Iraq

Middle East Eye: US campaign against dollar smuggling triggers salary payment crisis in Iraq (alrafidain.news)

Al Jazeera Network

Middle East Eye: US campaign against dollar smuggling triggers salary payment crisis in Iraq

•  13 minutes ago
•  

Iraq is facing a deep gap in its public finances due to the crackdown on corruption and dollar smuggling by the US Federal Reserve since the "theft of the century", Iraqi officials told Middle East Eye.

The crisis – which is expected to worsen in the next few weeks – has caused the collapse of daily dollar trade through a currency auction run by the Central Bank of Iraq, as the government relies on the auction to convert dollars it earns from oil revenues into the local currency (dinar).

Last year saw an average of about $200 million a day sold through auction to banks and private companies, but that figure fell sharply in the last two months of last year, falling to a daily average of $56 million by late December, according to data it reviewed.

According to the same source, the government is facing a crisis to pay public sector salaries and meet its other monthly obligations, as a senior central bank official told MEE on condition of anonymity, "The problem we face now in Iraq is the scarcity of dinars, not the dollar."

The dollar exchange rate in informal markets has risen from 1,480 dinars to 1,630 dinars since late November, the price of consumer goods has risen this week to 2,350 dinars per kilo from 1,850 dinars, and the cost of cooking oil has more than doubled from 1,250 dinars per liter to 3,000.

Iraqi officials MEE spoke to denied any direct link between the current crisis and the so-called "theft of the century", in which about $2.5 billion was stolen from the IRS through state-owned banks between September 2021 and August 2022, but acknowledged that the US Federal Reserve imposed stricter measures on private banks that buy dollars through auction two months ago, just weeks after details of the theft were revealed by the Finance Ministry. on October 10.

An adviser to the prime minister, who spoke to MEE on condition of anonymity, said the Federal Reserve began checking foreign money transfers in November in an attempt to track stolen funds, adding that this caused delays in the release of transfers and led to a decline in dollar sales through the auction, noting that the Reserve Bank also provided checks on the source of funds held by private banks participating in the auction, prompting many of them to Withdrawal and increase of the unofficial exchange rate.

 

 

 

 

 

Crisis Meeting

In late December, the Coordination Framework (the largest political coalition in the Iraqi parliament) held a meeting in Baghdad to discuss the rising cost of the dollar and the crisis in Iraqi markets, and the meeting was limited to senior coalition leaders, Prime Minister Mohamed Shia al-Sudani, and Central Bank Governor Mustafa Ghalib, who said at the meeting that the Fed had "serious indications" of dollar smuggling.

Ghalib said that the CBE suspended dealing with four private Iraqi banks in November, following a directive from the Federal Reserve.

According to a document seen by MEE, the CBE also ordered banks and other financial institutions to stop dealing in dollars with the four banks "for audit purposes" on November 6, which in turn challenged these decisions in lawsuits filed by these banks against the CBE but their case was rejected by the Financial Services Court, which affirmed the Federal Reserve's right to prevent them from dealing in dollars.

Exchange in the Shorja market in central Baghdad (AP)

Oil sales revenue

The Iraqi government needs about 8 trillion dinars ($5.5 billion) a month to pay the salaries of government employees, retirees and welfare beneficiaries, largely secured through a currency auction, most of which comes from oil revenues.

Even at its peak, the auction usually does not raise enough to meet the $275 million the government needs each day, and this shortage of currency shares held by the central bank was usually covered by internal bank-government loans, by printing more currencies, or other financial activities.

Foreign exchange auction data for the past four years reviewed shows that the amount of dollars traded has remained stable, averaging around $200 million per day in 2019 and 2020. In the first three months of 2021, the amount traded at the auction fell to historic lows with only $3 million traded on some days, but in the second week of April, the daily amount suddenly jumped by an average of $190 million traded daily until the end of the year. In 2022, dollar sales did not fall below the average of $200 million per day for the first 10 months of the year.

Central Bank of Iraq (Al Jazeera Net)

Limited options

Since the collapse of auction revenues, the CBE has opened new outlets to sell dollars directly to citizens through the currency auction system, in an attempt to raise more dinars, but data showing foreign currency sales over the past few weeks shows that the bank is still selling on average less than $90 million a day.

According to Middle East Eye, Iraqi officials expect the situation to deteriorate further in the next few weeks, especially after the Central Bank launched a new electronic platform for the currency auction earlier this month, where the bank said in a statement that it launched the platform "in coordination with international bodies for the purpose of governing and regulating powerful operations for the purchase and sale of foreign currencies and ensuring effective control over them."

The new platform connects all banks to the CBE and asks banks to disclose information about their customers requesting money transfers, beneficiaries, correspondent banks and other details.

"The new platform has complicated things further, as the real owners do not want to reveal their identity or the source of their money, so we do not expect auction sales to improve soon," the article quoted one of Sudani's advisers as saying, adding, "Pressure is building and the situation will get worse if the government does not take decisive measures to contain the crisis, but the problem is that the available options are very limited and need time."

The situation does not bode well, the central bank official said, noting that if auction sales remain low, the central bank will have to issue a new edition of the local currency.

 

 

Currency devaluation risks

Iraqi officials warned – according to "Middle East Eye" – against issuing a new edition of the local currency because this would reduce the value of the dinar and increase the rate of inflation, which was rejected by the leaders of the coordination framework, and instead urged Sudani and Ghalib to go to Washington seeking to negotiate a 6-month grace period before the start of implementing new measures, to allow the government and the central bank to "prepare."

The leaders of the framework called for easing the audits imposed by the US Federal Reserve, faster procedures for foreign financial transfers, increasing the number of official dollar outlets, and tightening controls on dollar smuggling.

[6ly410]

 

Former JSC Chairman Sets Way to Control Dollar

Posted 29 seconds ago

 

Former Chairman of the Securities Commission sets a way to control the dollar - Iraq News (iraqakhbar-com.translate.goog)

 

News Source /Al-Sumaria Channel

 

News source /

Al-Hims said, during his speech to the program twenty broadcast by Al-Sumaria TV, that "the government is able to change the price of the dollar by converting it from a currency auction to a fixed exchange rate."

 

He added, “Part of the problem is the US Federal Bank, as there were understandings with the Central Bank of Iraq to establish a platform to deal with the dollar, but the Central Bank could not activate it during these two years, which led to the intervention of the Federal Reserve to reduce the dollar.

 

He continued, "The government of Mohammed Shia al-Sudanese is new and inherited many of the legacies of previous governments and encountered this big problem of exchange rates," pointing out that "it needs at least 6 months to control the dollar."

Al-Hims predicted that "the dollar exchange rate will reach 1,800 dinars in the coming days."

[rvmydinar]

8 minutes ago, 6ly410 said:

"the government is able to change the price of the dollar by converting it from a currency auction to a FIXED EXCHANGE RATE."

 

Al-Hims predicted that "the dollar exchange rate will reach 1,800 dinars in the coming days."

Let's hope what the Iraqi government mean by Fixed exchange rate isn't 1,800 dinars cause this is a devaluation. This isn't what we want it.  It is a no no.

[6ly410]