Advisor to the Prime Minister: The Central Bank's circular on dollar trading will contribute to market stability

[6ly410]

Advisor to the Prime Minister: The Central Bank's circular on dollar trading will contribute to market stability

 

•  Today, 21:05

Baghdad - The financial adviser to the Prime Minister, Mazhar Muhammad Saleh,
explained on Thursday the objective of the Central Bank's circular today regarding the trading of the dollar from outside the platform according to supply and demand, noting that it will provide high flexibility in supply that contributes to the stability of the market.

Saleh told the Iraqi News Agency (INA): "The liberalization of foreign exchange buying and selling is not an alternative to the policy of defending price stability and the government's plan to intervene in the stability of the general level of prices."
He added, "Families and natural and legal persons in Iraq hoard cash amounts in foreign currency and outside the banking system estimated at billions of dollars and are subject to two phenomena, the first: the difficulty of disposing of their circulation outside the laws of supply and demand that make the free exchange rate currently due to deterrent legal controls, and the second is the contraction of a large money supply of liquid foreign currency, which stops moving in the form of hoarding cash rigid movement and outside the circle of supply."
"This exacerbates exchange rate fluctuations under the influence of (the foreign currency liquidity trap due to expected positive wealth due to the appreciation of foreign exchange against the local)," he said.
He added, "Therefore, liberalizing the climate of dealing with foreign currency and making it white will provide high flexibility in supply that contributes to reducing the noise of the secondary exchange market, which provides a flexible supply of foreign exchange that leads to market stability, supported by a government policy that provides a commodity offer through the official rate of high stability and financed at an exchange rate of 1320 dinars per dollar."

[6ly410]

3 minutes ago, 6ly410 said:

This exacerbates exchange rate fluctuations under the influence of (the foreign currency liquidity trap due to expected positive wealth due to the appreciation of foreign exchange against the local),"

 

[BETTYBOOP]

Anybody think they know people expect to make money on this? 😂😂

[6ly410]

The government's financial adviser reviews the benefits of the decision to "liberalize the selling price of the dollar" in banking

Economy | Today, 21:53 | 

    Government Financial Advisor reviews the benefits of the decision to "liberalize the selling price of the dollar" in exchanges » Baghdad News Agency Today (baghdadtoday.news)

 

Baghdad Today - Baghdad

The Financial Advisor to the Prime Minister, Mazhar Muhammad Saleh, confirmed on Thursday (November 23, 2023) that the decision of the Central Bank circular today regarding the trading of the dollar from outside the platform according to supply and demand, will provide high flexibility in supply that contributes to the stability of the market.

Saleh told the official news agency, followed by "Baghdad Today" that "liberalizing the sale and purchase of foreign exchange is not a substitute for the policy of defending price stability and the government's plan to intervene in the stability of the general level of prices."

The Central Bank of Iraq had issued circulars to the licensed banks regarding their share and the sale of dollars to citizens at the official rate yesterday, Wednesday, as it confirmed that its circular No. 463/3/9 on 2023/8/17, paragraph (first) of it, that the official price for selling the cash dollar to the final beneficiary of the citizen, amounting to (1320) dinars / dollars, goes to the cash share received by banks and exchange companies and mediating the sale and purchase of foreign currency directly from this bank / the window of buying and selling foreign currency and must be adhered to and sold in accordance with Instructions communicated to you Otherwise, the price is subject to the forces of supply and demand in the market.

The adviser to the prime minister added that "families and natural and legal persons in Iraq hoard cash amounts in foreign currency and outside the banking system estimated at billions of dollars and are subject to two phenomena: the first is the difficulty of disposing of their circulation outside the laws of supply and demand that make the current free exchange rate due to deterrent legal controls, and the second is the contraction of a large money supply of liquid foreign currency, which stops moving in the form of rigid cash hoarding and outside the circle of supply."

"This exacerbates exchange rate fluctuations under the influence of (the foreign currency liquidity trap due to expected positive wealth due to the appreciation of foreign exchange against the local)," he said.

He added, "Therefore, liberalizing the climate of dealing with foreign currency and making it white will provide high flexibility in supply that contributes to reducing the noise of the secondary exchange market, which provides a flexible supply of foreign exchange that leads to market stability, supported by a government policy that provides a commodity offer through the official rate of high stability and financed at an exchange rate of 1320 dinars per dollar."

The Central Bank of Iraq's statement on Wednesday, that the dollar exchange rates are subject to "the forces of supply and demand in the market", raised several questions by economists about the reasons that prompted the governor to issue a decision that was considered yesterday an "economic crime" in which the accused is imprisoned under the penalty of the Penal Code in force against speculators in exchange rates.

What economists pointed out is that all the measures taken in cooperation with the US side nearly two years ago have become in the wind with the return of the currency auction in a "parallel" manner, which is an implicit recognition of the existence of a "parallel market" that imposes itself on the Iraqi economy and controls it, and there is no point in preventing it.

Economist Nabil al-Marsoumi commented on the move, sarcastically, "The militarization of the dollar ended, after the central bank recognized the existence of the parallel market!!."

On the other hand, economists described the Central Bank's action by saying that the bank was finally convinced of the futility of preventing parallel markets, and allows exchange in the dollar currency according to supply and demand, considering that "this step is good and will enhance the stability of the markets."

The matter led to several questions raised by observers, about how the Central Bank will ensure that the dollar does not go to prohibited channels, and whether this means that the Central Bank will retreat from the step to prevent the delivery of remittances in dollars to citizens, and whether the circulation of the dollar will become available and not be pursued and any exchange can sell the dollar to anyone wishing to buy the dollar, as well as whether it will enhance the stability of the markets, especially since cash from the dollar will become available, which may lead to Balance of supply and demand and thus lower prices.

[jg1]

Oh boy. Don't think this is the answer. Continuing to sell the dollar for any reason is not good for us. We want them to stop selling the dollar and stop using it. We need them to liberalize their oil sales not the dollar sales.

[BETTYBOOP]

46 minutes ago, jg1 said:

Oh boy. Don't think this is the answer. Continuing to sell the dollar for any reason is not good for us. We want them to stop selling the dollar and stop using it. We need them to liberalize their oil sales not the dollar sales.

Agreed. What I struggle to get my head round is this... why on earth can they not issue a visa or Mastercard which can be used internationally and then if they need to use it abroad then it would automatically convert the currency.. thus no need to sell dollars  Why do they need to buy dollars to travel...? apart from the fact the exchange rate is rubbish

[jg1]

59 minutes ago, BETTYBOOP said:

Agreed. What I struggle to get my head round is this... why on earth can they not issue a visa or Mastercard which can be used internationally and then if they need to use it abroad then it would automatically convert the currency.. thus no need to sell dollars  Why do they need to buy dollars to travel...? apart from the fact the exchange rate is rubbish

I believe they cannot use a Visa abroad for the reason that they cannot use their money internationally. This is what we're waiting for. If they were to use that Visa in another country, yes it would convert it for you. But dinars are not accepted in other countries yet. 

 

[BETTYBOOP]

@jg1 thanks hadn't thought about that small fact

[screwball]

2 hours ago, 6ly410 said:

Therefore, liberalizing the climate of dealing with foreign currency

 

[screwball]

24 minutes ago, jg1 said:

I believe they cannot use a Visa abroad for the reason that they cannot use their money internationally. This is what we're waiting for. If they were to use that Visa in another country, yes it would convert it for you. But dinars are not accepted in other countries yet. 

 

Yep…and what’s worse for them at the current rate their accounts will be wiped out quickly due to the exchange rate not being real! 

[screwball]

Your living in the US and you draw out $100 US your account will be at zero pretty quick! 

[6ly410]

Post RV 🥂🤙

[Laid Back]

There is a pattern in the evolution of exchange control systems, a typical sequence of events:

 

A Phase 1, implementation in response to a serious balance-of-payments deficit, a free foreign-exchange market is abandoned in favor of price control and rationing of foreign exchange. Initially exchange control applies only to major categories of receipts and payments but is rapidly extended to cover all external transactions.

 

Phase 2, consolidation —a black market appears; regulations are extended and revised to close loopholes, to cope with shortages, and to repair inequities and anomalies. The foreign-exchange market is fragmented and differential treatment is accorded to different types of trade or traders. Taxes, subsidies, or multiple-exchange rates are introduced to offset, in a discriminatory way, the effect of an overvalued currency on foreign-exchange receipts and the demand for imports. The system becomes increasingly complex and administratively burdensome.

Phase 3, rationalization-the complexity of the system is reduced by consolidation of market fragments. Regulations are simplified and applied to broader categories of transactions. De facto but selective devaluation, through
tax, subsidy, and exchange-rate adjustments, becomes a policy instrument. Portions of the market are "liberalized" by returning to a limited free market
in which price resumes its functions of evoking supply and limiting demand.
Continued disequilibrium, however, sustains the black market which may be
"tolerated" as a sort of unofficial free market.
 

Phase 4, termination—to the accompaniment of some further adjustments of the tax and subsidy structure, there is a return to a free market. However, complete termination may be postponed; phase 3 may continue more or less

[steveh12]

Could you dumb it down for me please?

Tough when I'm a nitwit 🙄

[gregp]

13 hours ago, steveh12 said:

Could you dumb it down for me please?

Tough when I'm a nitwit 🙄

No problem….it says keep waiting.  

[BETTYBOOP]

In the past year .... how many times.es has there been claims that the new package from the cbi or the government will control the parallel market? 

How many times have they also been silly enough to give a time frame? 

How many times has the measure actually done what was claimed....??? 

Never! Why should this be any different?

[horsesoldier]

In the 20 years I've been involved in this investment, they've been notorious for running their mouths incessantly on every topic imaginable.

Delivering the goods is a long foot dragging excuse ridden laborious frustrating process. Boorish & tedious behavior from self serving criminal elites.

To date the best example of drivel & verbal   is " ...hold onto your dinars they're worth more than dollars " by Sudani. This statement was issued early in '23.

In all fairness there's been quite a lot going on & everyone is eagerly waiting on 1/1/24 for "delivering on the goods"

Enough is enough: hoping the dinar/$s statement becomes a reality in the 1st quarter of '24. If not we're up for a long Deja Vu' all over again. IMHO.

 

[Laid Back]

In Conclusion; All the decisions they’re making is to go back to a Free Market Economy.

Work in Progress.!

 

Go CBI 

Go new monetary policy 

Go Free Market Economy 

Go Stronger dinar

 

[RJG]

Interior Ministry: More than 25 dollar traders were arrested
a wish | 03:00 - 11/25/2023

Baghdad - Mawazine News
The Ministry of Interior counted, today, Saturday, the dollar speculators and beggars who were arrested during the month of last October.
The Director of Organized Crime Operations at the Ministry of Interior, Brigadier General Hussein Al-Tamimi, told the official agency, followed by Mawazine News, that “based on the directives of the Minister of Interior, the Directorate of Combating Organized Crime began operations on the Rusafa and Karkh sides of the capital, Baghdad, in addition to the directorates located within the governorates.” ", with a wide campaign to eliminate the phenomenon of begging."
He added, "There is a vigorous field follow-up by the Undersecretary for Intelligence and Federal Investigations on the phenomenon of begging, which has become an uncivilized and widespread phenomenon in Baghdad and the provinces, and the arrest of beggars."
He pointed out that "during the past month, more than 115 beggars of various Arab and Asian nationalities and age groups were arrested. They were detained and prosecuted by the judiciary," stressing that "they were arrested and sent to the competent authority (Directorate of Residency Affairs)."
He continued, "There are also ongoing campaigns regarding the follow-up of unlicensed brokerage offices, in addition to human trafficking, and some of the duties assigned to the work of the Directorate for Combating Organized Crime."
He stressed that "there are other campaigns continuing to pursue manipulators and speculators with the exchange rate of the dollar. During the past month, more than 25 defendants were arrested."

https://www.mawazin.net/Details.aspx?jimare=238501

 

 

[nannab]

Thank you RJG  

 

[rvmydinar]

On 11/24/2023 at 10:46 PM, horsesoldier said:

To date the best example of drivel & verbal   is " ...hold onto your dinars they're worth more than dollars " by Sudani. 

Hope Sudani doesn't say that verbal BS every year for the next 20 years or more.

[BETTYBOOP]

10 minutes ago, rvmydinar said:

Hope Sudani doesn't say that verbal BS every year for the next 20 years or more.

 As far as I am aware it is the first time he has said it. They have never been this far progressed be fore. I don't think we will be here inn20 urs. Possibly another 1 maybe 2 ... unless thw war in gaza escalates... then we are stuck with a useless currency

[horsesoldier]

2 hours ago, rvmydinar said:

Hope Sudani doesn't say that verbal BS every year for the next 20 years or more.

Too right, this statement has surfaced a number of times in the last 6 months. Most obnoxious having to listen to the empty promises narratives for several decades now.

 

[screwball]

i am still waiting for sudanis tweet about Iraq making a move that will shock the world????? me personally believe Jan or 1st quarter is going to be a great year!