Opinion on the subject of dinars !!

claud39 wrote:Good evening members of the forum !!

Out of curiosity, and do a kind of little survey !!

I apply practically 2 years on the forum, and I would like to ask the question to the person who is not the economy like I am Sam for example !!

And it's nothing personal Sam !!

 I would just like the opinion of ordinary people who follow the news on Iraq, hoping for a change on the currencies for the dinars ??

Jayzze wrote:we might not always agree but thats okay. if you remember a couple of years ago when abadi was pm he went to the davos and ku eco confrence begging for eco aid and only got 10%for the same reason iraq still has not gotten it corruption.this is still a major issue and now the gcc and wto want iraq to join. if a miracle happens then you could see an increase in value. the first signs would be the dropping of the 3 zeors

claud39 wrote:You see that translation can change the way of thinking !!!

You are right RamblerNash, and Sam has some background in economics, and I'm not saying the opposite !!!

  But I am addressing myself especially to members of the forum who have no knowledge of economics, but who only trust the gurus, or the news that I am sharing on the forum to demonstrate the contrary, that is my question ??

I don't constrain Sam on the economy, I don't know anything, or practically nothing about it, I just look at what happens every day in Iraq, and I would like to know if you see as I do the return of the iraq internationally ???


Claud (Moose)

RamblerNash wrote:

claud39 wrote:You see that translation can change the way of thinking !!!

You are right RamblerNash, and Sam has some background in economics, and I'm not saying the opposite !!!

  But I am addressing myself especially to members of the forum who have no knowledge of economics, but who only trust the gurus, or the news that I am sharing on the forum to demonstrate the contrary, that is my question ??

I don't constrain Sam on the economy, I don't know anything, or practically nothing about it, I just look at what happens every day in Iraq, and I would like to know if you see as I do the return of the iraq internationally ???


Claud (Moose)

"The return of the Iraq internationally" can take on different meanings.

They are involved in trade (oil, and other markets) internationally.

They are involved in the UN, WTO, IMF, OPEC, and various other internationally recognized organizations.


You started this thread with "currency exchange", specifically Dinar.

The Dinar, as far as it being "internationally", can be bought, sold, traded, and exchanged in almost every country, just like many other currencies.


What exactly is your meaning of "The return of the Iraq internationally" and what was the date it was removed, or suspended, for it to return to?

What exactly are the requirements to be meet for "The Return"?

Enlarge this image Click to see fullsize

"This visit may come as a continuation of the international and regional openness to Iraq, as they realize that they are dealing with a new project for the Iraqi state, represented by the stability in which the country is living and which opens the doors for investment to France."

Faily added, "France may offer solutions to the problems that Iraq suffers. Economic stability will lead to positive results in any international alliances in the field of energy, and there is also a conviction that Iraq is the beating economic heart in the region."

RamblerNash wrote:Claud, I think your getting lost in the translations. The articles are talking about trade. Iraq is trying to do that with several countries.

Exchange the word "international" with "global". They mean about the same, but loses quite a bit of the Gurus nuances.

As far as the Dinar currency rate, I know you are aware on what the IMF, UN, and WTO post as the rate, but have you asked yourself why the one posted by the CBI is so different?

claud39 wrote:When you mention for the change of the central bank, and this is my personal opinion, they are in parallel market mode, and not in the free market, or internationally !!

Commenting on the two ministers' answer, MP Muhammad al-Darraji stressed the need to fully and not partially implement the legislated law, wondering about the value of internal and external borrowing and the size of what is allocated to pay salaries or in the investment sector, as well as knowing the value of the exchange rate specified in the next budget.

Minister Allawi pointed out that there are three types of loans

Siemens and General Electric, stressing the importance of reviewing the exchange rate so that the Iraqi economy enters the cycle of competition

RamblerNash wrote:

claud39 wrote:When you mention for the change of the central bank, and this is my personal opinion, they are in parallel market mode, and not in the free market, or internationally !!

Well...My question was why does the IMF have one rate, but the CBI has another? Maybe that translates better?

Commenting on the two ministers' answer, MP Muhammad al-Darraji stressed the need to fully and not partially implement the legislated law, wondering about the value of internal and external borrowing and the size of what is allocated to pay salaries or in the investment sector, as well as knowing the value of the exchange rate specified in the next budget.

The context in the article is about loans.

Right below what you highlighted is this:

Minister Allawi pointed out that there are three types of loans

Then you have this just below that:

Siemens and General Electric, stressing the importance of reviewing the exchange rate so that the Iraqi economy enters the cycle of competition

Which rate do you think they are talking about? The IMF rate or the CBI rate?

claud39 wrote:Finance: Government economic policies weaken the private sector




09/08/2020

Economy News - Baghdad

The Minister of Finance, Ali Allawi, announced that the government's economic policies over the past years have weakened the private sector, indicating that achieving economic and financial reforms requires 5 years, stressing that the economic reform paper will be presented in the middle of next month.

Allawi said in his speech during hosting the House of Representatives today and seen by "Economy News", that the economic reform program needs a long time to present it because the economic situation in Iraq is going through a critical situation due to the repercussions of previous cumulative economic policies that passed on the Iraqi state since the fifties of the last century and until Now, especially the legislation of the Agrarian Reform Law and the decisions of the socialist package, in addition to the loss of the economic vision that weakened the private sector and made all resources in the hands of governments.

Il a souligné que le gouvernement actuel souffre d'une pénurie de fonds qui l'a contraint à emprunter en interne et en externe et ne peut pas mettre en œuvre la présentation du document dans le délai spécifié par la loi votée , notant qu'une équipe spécialisée a été formée avec un cadre de 40 employés travaillant continuellement à préparer et à soumettre le document requis malgré les circonstances. Le système de santé actuel, indiquant que les raisons de retarder sa soumission sont techniques et historiques, fixant le plafond pour la soumission par le gouvernement du premier document de réforme négociable à la fin de ce mois , tandis que le document de réforme sera soumis dans sa forme finale en au milieu du mois prochain  .

Le ministre Allawi a souligné qu'il existe trois types de prêts, y compris les prêts commerciaux dont le gouvernement irakien s'est éloigné , les emprunts auprès des gouvernements et le troisième en empruntant à des institutions internationales de développement telles que la Banque mondiale et le Fonds arabe à des fins d'investissement, notamment ceux liés aux exigences d'amélioration du secteur électrique en activant des accords économiques antérieurs avec mon entreprise. Siemens et General Electric, soulignantl'importance de revoir le taux de change pour que l'économie irakienne entre dans le cycle de concurrence avec l'intérêt du Fonds monétaire international dans la question du taux de change, notant que le ministère a reçu un montant de 15 billions de dinars au total pour répondre aux besoins des salaires  .

Le ministre des Finances a indiqué que la nécessité d'emprunter était de soutenir le budget général et de combler le déficit financier sans soutenir les projets d'investissement , expliquant que la tendance à emprunter au Fonds monétaire international vient du fait qu'il a des programmes spécifiques en faveur des pays souffrant de crises financières telles que l'Irak avec des prêts pour une période de trois ans à condition qu'ils soient liés à des réformes administratives et financières , soulignant que le gouvernement a ouvert des canaux de communication avec le Fonds monétaire international parce que l'Irakn'a pas de source d'emprunt interne à l'exception de la Banque centrale d'Irak et de l'absence de marchés financiers accrédités en Irak, en plus du fait que les institutions bancaires gouvernementales sont saturées de dettes envers le gouvernement pour financer le déficit financier des budgets et les banques privées ne le sont pas Il dispose d'un financement financier important  .

Le ministre a ajouté qu'il fallait 5 ans pour mener à bien des réformes économiques concrètes en trouvant de nouvelles alternatives de revenus, notant que la dette totale représente 80 à 90% du produit national irakien, ce qui équivaut à 160 billions de dinars de dette extérieure, y compris le Koweït et Les dettes de l'Arabie saoudite s'élevant à 40 milliards de dollars, déclarant non La possibilité pour le ministère des Finances de compter la masse monétaire en Irak.

https://economy-news.net/content.php?id=21781

Désolé RamblerNash !!

  Mais aujourd'hui tu m'as fait réfléchir à tes questions, et d'ailleurs très amusant de discuter avec quelqu'un qui est, ou pas d'accord avec soi, mais qui nous donne un avis qui nous pose de vraies questions !!

Mon objectif n'est pas d'avoir raison, au contraire !!

Mais comme les membres du forum sont gênés de participer à la discussion, et je tiens à préciser, les membres qui ne savent pas vraiment ce qui se passe actuellement en Irak, et surtout le côté économique, sauf celui de faire confiance aux gourous! !

Mon objectif est de mettre une image pour que les membres puissent comprendre, vous savez que c'est sympa de critiquer, et de contester ce que les gourous nous disent !! Mais les gens ordinaires se perdent dans cette histoire !!

Nous avons chacun une façon de voir la situation en Irak, et de comprendre ce qu'ils nous disent soit sur les sites Web du gouvernement, soit dans les journaux du pays !!

Alors voici ma compréhension dans ce texte !!

Claud (orignal)

claud39 wrote:

RamblerNash wrote:

claud39 wrote:When you mention for the change of the central bank, and this is my personal opinion, they are in parallel market mode, and not in the free market, or internationally !!

Well...My question was why does the IMF have one rate, but the CBI has another? Maybe that translates better?

Commenting on the two ministers' answer, MP Muhammad al-Darraji stressed the need to fully and not partially implement the legislated law, wondering about the value of internal and external borrowing and the size of what is allocated to pay salaries or in the investment sector, as well as knowing the value of the exchange rate specified in the next budget.

The context in the article is about loans.

Right below what you highlighted is this:

Minister Allawi pointed out that there are three types of loans

Then you have this just below that:

Siemens and General Electric, stressing the importance of reviewing the exchange rate so that the Iraqi economy enters the cycle of competition

Which rate do you think they are talking about? The IMF rate or the CBI rate?

Very fun to discuss with you, you push me to do some research to answer you on the subject !!
You know I am not the only one who is asking the question which will determine the return of the dinar on the international market, so here is what I found !!



Claud (Moose) 


Who determines the exchange rate?
The exchange rate of a currency is: either fixed, in other words constant with respect to a reference currency (generally the US dollar or the euro), by decision of the State which issues this currency. The rate can then only be changed by a devaluation (or revaluation) decision of that State.

Exchange rates - Wikipedia

claud39 wrote:Very fun to discuss with you, you push me to do some research to answer you on the subject !!
You know I am not the only one who is asking the question which will determine the return of the dinar on the international market, so here is what I found !!

RamblerNash wrote:Which rate do you think they are talking about? The IMF rate or the CBI rate?

claud39 wrote:Siemens and General Electric, stressing the importance of reviewing the exchange rate for the Iraqi economy to enter the cycle of competition with the interest of the International Monetary Fund in the exchange rate issue, noting that the ministry has received an amount of 15 trillion dinars in total to meet the needs of wages.

Claud39 wrote:You see my understanding !!
To trade you must have an exchange rate, and the ministries of finance ask to put an exchange rate to trade with other countries in the next budget which is the 2021 budget !!

Claud (Moose)

claud39 wrote:Finance: Government economic policies weaken the private sector




09/08/2020

Economy News - Baghdad

The Minister of Finance, Ali Allawi, announced that the government's economic policies over the past years have weakened the private sector, indicating that achieving economic and financial reforms requires 5 years, stressing that the economic reform paper will be presented in the middle of next month.

Allawi said in his speech during hosting the House of Representatives today and seen by "Economy News", that the economic reform program needs a long time to present it because the economic situation in Iraq is going through a critical situation due to the repercussions of previous cumulative economic policies that passed on the Iraqi state since the fifties of the last century and until Now, especially the legislation of the Agrarian Reform Law and the decisions of the socialist package, in addition to the loss of the economic vision that weakened the private sector and made all resources in the hands of governments.

He pointed out that the current government suffers from a scarcity of funds that forced it to borrow internally and externally and cannot implement the presentation of the paper within the period specified by the law voted upon, noting that a specialized team has been formed with a cadre of 40 employees working continuously to work on preparing and submitting the required paper despite the circumstances. The current health system, indicating that the reasons for delaying its submission are technical and historical, setting the ceiling for the government’s submission of the first negotiable reform paper at the end of this month, while the reforms paper will be submitted in its final form in the middle of next month .

Minister Allawi pointed out that there are three types of loans, including commercial that the Iraqi government has moved away from, borrowing from governments and the third by borrowing from international development institutions such as the World Bank and the Arab Fund for the purpose of investment, especially those related to the requirements of improving the electricity sector by activating previous economic agreements with my company. Siemens and General Electric, stressing the importance of reviewing the exchange rate so that the Iraqi economy enters the cycle of competition with the interest of the International Monetary Fund in the issue of the exchange rate, noting that the ministry received an amount of 15 trillion dinars in full to meet the needs of salaries .

The Minister of Finance indicated that the need to borrow was to support the general budget and fill the financial deficit without giving support to investment projects, explaining that the tendency to borrow from the International Monetary Fund comes because it has specific programs supportive of countries suffering from financial crises such as Iraq with loans for a period of three years provided that they are linked With administrative and financial reforms, pointing out that the government opened communication channels with the International Monetary Fund because Iraq has no source for internal borrowing except the Central Bank of Iraq and the absence of accredited financial markets in Iraq, in addition to the fact that government banking institutions are saturated with debts to the government to finance the financial deficit in budgets and private banks are not It has a large financial financing .

The minister added that it takes 5 years to carry out concrete economic reforms by finding new alternatives for revenues, noting that the total debt represents 80 to 90 percent of the Iraqi national product, which amounts to 160 trillion dinars of foreign debt, including Kuwait and Saudi Arabia's debts amounting to 40 billion dollars, stating no The possibility of the Ministry of Finance to count the monetary mass in Iraq.

https://economy-news.net/content.php?id=21781

Sorry RamblerNash !!

  But today you made me think about your questions, and by the way very fun to discuss with someone who is, or not in agreement with oneself, but who gives us an opinion which poses real questions to us !!

My goal is not to be right, on the contrary !!

But as the members of the forum are embarrassed to participate in the discussion, and I want to specify, the members who do not really know what is currently happening in Iraq, and especially the economic side, except that to trust gurus! !

My goal is to put an image so that the members can understand, you know it's nice to criticize, and challenge what the gurus tell us !! But ordinary people get lost in this story !!

We each have a way of seeing the situation in Iraq, and of understanding what they are telling us either on government websites, or in the country's newspapers !!

So here is my understanding in this text !!

Claud (Moose)

The minister added that it takes 5 years to carry out concrete economic reforms by finding new alternatives for revenues, noting that the total debt represents 80 to 90 percent of the Iraqi national product, which amounts to 160 trillion dinars of foreign debt, including Kuwait and Saudi Arabia's debts amounting to 40 billion dollars, stating no The possibility of the Ministry of Finance to count the monetary mass in Iraq.

claud39 wrote:the monetary policy tools adopted by the central bank must work with ASWAQ
Cash and other securities to create an effective payment system that gives banks confidence in meeting obligations






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claud39 wrote:Summary of CBI policy tools
 ************************************


 The Board of Directors of the Central Bank of Iraq approved at the sixth meeting
On the twenty of August, new regulations for the legal reserve requirements and banking facilities
Attached herewith, this statement reviews the general features of the new regulations and explains the reasons for their adoption
For the purpose of strengthening the monetary policy management of the Central Bank of Iraq and in supporting the new program that
The Ministry of Finance adopted it in issuing securities.

The Central Bank of Iraq will issue initial instructions to implement the terms of the new regulations,
Changes were made to the regulations of the Central Bank of Iraq and its banking operations to give it control
Better on the money supply and at the same time it gives high confidence to the banks in terms of options
And the conditions for managing the liquidity of their banks, and it is expected that the stock markets will play
The government has an important positive role in managing bank liquidity in accordance with the new regulations and on the other hand
Banks are expected to strengthen their financial position to manage their short-term liquidity requirements
The term (or what is more generally called the market), when banks finally resort to the bank
Central as a last resort.

In order to clarify this, the Central Bank of Iraq will hold several meetings with banks in
The near future to discuss the proposed regulations.


The Ministry of Finance made a change in the method of financing the deficit in its revenues due to the restrictions
The new legal framework imposed upon it when borrowing from the Central Bank of Iraq due to its desire to
Conducting the development of an active market for government securities, according to the requirements of the Public Debt Law
Newly approved, all debt services will be paid in cash, which is why the government securities valuations were paid
With its interest, which are due on the first of July and October for their holders, as for the papers
Government finances owned by the Central Bank of Iraq will be treated according to an agreement concluded between the Ministry of Finance
And the Central Bank of Iraq to restructure the claims of the Central Bank of Iraq against the government,
The Ministry of Finance has already started issuing new securities to finance those owed by it, and they may be sold
New securities after being released on the secondary market.

The Central Bank of Iraq reformulated its banking relationship with banks to develop a market
It depends on new monetary policy tools for the purpose of facilitating the development of the new stock market
For the Ministry of Finance, there is no requirement for now from the banks to acquire equivalent securities
10% of total deposits (now included in the list of reserve requirements).


The Central Bank of Iraq will not deal in the future in the sale or purchase of securities as desired
In addition, the banks closed the exposure facilities and advances granted by the bank
The Central Bank of Iraq replaced it with new existing facilities for lending and deposits, which it approved
Recently, the bank’s board of directors, and the regulation of statutory reserve requirements, will come into effect in one month
November The Central Bank of Iraq may buy or sell securities for a ministry by a decision
Finance at banks according to a competitive principle for the needs and purposes of monetary policy (to be launched
All these instrument-related changes are detailed below
The new monetary policy: -

Monetary Policy Tools:

The formulation prepared by the Central Bank of Iraq for monetary policy tools serves to strengthen
The ability of banks to manage short-term liquidity, which is directed by the Central Bank of Iraq
The required monetary policy (which can be evaluated according to various intermediate variables, including
The yield curve, the exchange rate, and the amount of growth in the money supply) in terms of capacity
Liquidity management, the monetary policy tools adopted by the central bank must work with ASWAQ
Cash and other securities to create an effective payment system that gives banks confidence in meeting obligations
Pay it and have reasonable costs.

To be sure, the most costly to provide liquidity is by using additional reserves (such as cash in
Safes and balances with the Central Bank of Iraq in excess of the reserve requirements
Legal) as well as the margins of intervention (the difference between interest rates on deposits and on loans)
They can be reduced by allowing the banks to reduce their holdings of the returns arising from excess reserves
They do not bear interest and the ability of banks to reduce their excess reserves depends on finding intermediaries
Reliable liquidity management.

The Central Bank of Iraq has taken effective and influential tools on the liquidity market (basic cash), which are: -

1 - Foreign currency auctions in which the Central Bank of Iraq buys or sells dollars from
Or to the market in light of its political goals.

2- A list of statutory reserve requirements on which banks rely for possession
Customer deposits, i.e. with differential levels of deposits with the Central Bank of Iraq, cash
In the treasuries and securities of the Ministry of Finance.

3- Exposure facilities for banks that have reserve account balances in the bank
The Iraqi Central Bank, but it is not sufficient to settle its obligations at the end of the working day
Banker


4- The discount window for bills of exchange or similar bank notes with lesser terms
From 90 days and endorsed by at least two signatures (currently imposed at 11% for papers
First Class Finance).

5- Lender of last resort facilities, which are given to troubled banks
Chronic liquidity in exchange for a guarantee offered by it.

6- The Ministry of Finance's securities window and buy or sell such banks under it
Government papers at face value (i.e. at the interest rate upon issuance)
The aforementioned tools are insufficient to develop an effective market that directs the financial sector, in particular
Not suitable for developing a market with sufficient liquidity for government securities or for management
A market built on the basis of monetary policy, and we believe that foreign currency auctions are in place
Recently, they are working well and satisfactorily while other tools have been reformulated, as well
The legal reserve requirements do not provide banks with useful liquidity management tools and may confuse
In achieving the monetary goal as it subscribes to the requirements of government securities
Don't be a part of it.

The diversity of lending facilities is not very transparent and does not always serve its goals
Policy, and the Ministry of Finance's securities window provides sufficient liquidity, but with restrictive conditions
The development of secondary dealing and an interbank market.

 Moreover, the securities window
The Ministry of Finance suspended the role of the Central Bank of Iraq in monitoring one of the most important management tools
On cash, as they allowed banks to deal with the Central Bank of Iraq, to ​​buy or sell
Securities for the Ministry of Finance as granted articles 28, 29 and 30 of the Central Bank Law
The Iraqi has the authority to manage open market operations and to provide existing facilities to the banks
He laid the foundations for legal reserve requirements, and the authority granted him, in exceptional circumstances, that
The lender would be the last resort, as the aforementioned articles prepared the foundations for creating policy instruments
His speech, which will be approved by the Central Bank of Iraq in this field.

It is noted that the purpose of preparing the new statutory reserve requirements and facilities regulations
Banking is to facilitate the more effective liquidity management of banks in the market and encourage banks
To deal with each other more broadly, rather than dealing exclusively with the central bank
Al-Iraqi exclusively for liquidity management.

Below we list the main causes and features of each new tool: -

Legal Reserve Requirements:

In fact, the legal reserve requirements of the Central Bank of Iraq, and confirmed in
12/12/2003 are three separate requirements in unified instructions.

 It is required that the banks:

Freeze deposits are deposited with the Central Bank of Iraq, which is currently at 20% of liabilities
Deposits and / or current deposits for the previous month, at a rate of 5% of liabilities for savings deposits, and at a rate of 2%
Of fixed and / or temporary deposit obligations, in addition to that, the instructions include two basic requirements
Separate holders of securities of the Ministry of Finance and at least 10% of total liabilities
Bank deposits with a percentage of not less than 10% of the total deposit obligations. 

The request for withdrawal shall be considered
Reserve balances are not compensable, and statutory reserve requirements are declared by instructions
Before the Board of Directors of the Central Bank of Iraq and went to the General Directorate of Statistics and Research and to
The General Directorate of Credit and Banking Supervision. The banks report prepared in accordance with the instructions shall be sent
To the General Directorate of Accounts.

The statutory reserve requirements do not reflect best practices and accordingly, the Central Bank of Iraq
Establishing new requirements for the purpose of providing for the monetary policy needs of the market economy, and wherever they exist
Legal reserve requirements are generally seen as a monetary policy tool rather than a control tool
Accordingly, the responsibility for monitoring each bank is subject to the new requirements that have been implemented
Transferring it from the General Directorate of Credit Control and Banking to the General Directorate of Agreements
And loans, which in turn will bear the primary responsibility for embedding monetary policy as preferred
Preparing unified requirements for monetary policy purposes (i.e. the same for all reserve deposits).


The ratio of the new requirements shall be applied to all deposit liabilities with respect to the concept of cash
The cash multiplier (the ratio of the quantity of cash in relation to the base cash) is more stable and more dependent on it,
In addition, it has a neutral effect on the public’s choice of deposit maturities, which in reality are
It is preferred from a tax policy point of view as foreign currency deposits are also included

The deposit is the basis for the legal reserve requirements, so foreign currency deposits cannot be preferred
And then (the dollarization process) (that is, the dominance of the dollar currency over the Iraqi dinar) and that is why
Requirements for deposits of dinars or foreign currency must be in dinar currency.


The instructions imposed various requirements on banks' deposits with the Central Bank of Iraq
And on cash in the treasury, in fact, the new requirements have been standardized to be requirements
Identical meeting the cash obligations of each bank that maintains deposits in its current account or cash in the treasury
At the Central Bank of Iraq.


The initial return that banks achieve for the new requirements results from the possibility of the
Requirements are on an average basis rather than on a permanent basis.

The requirements will continue to be fixed for monthly periods, but the frozen current deposits are transferred to
A single clearing account for each bank, and the balances kept in its accounts are based on the rate
The average to meet the requirements can be deposited in Iraqi dinars with the Central Bank of Iraq
(And not in the existing deposit facilities) in addition to the new Iraqi cash in bank vaults
The bank may use its deposit or all of its deposits with the Central Bank of Iraq on any day as long as
The statutory reserve rate at the end of the working day (plus the average rate of the Iraqi dinar
The amount in the treasury cash) is equal to or more than the required amount.

The Board of Directors of the Central Bank of Iraq set the reserve ratio at 25% due to requirements
The new legal reserve allowed the banks to use the Iraqi dinar cash in the treasury for repayment
With the requirements, as it will grow with the increase in the assets of the statutory reserve and for the purpose of determining the effect of this
The change in the bank's liquidity (without raising the rate of requirements more than usual) was stipulated
The board of directors shall deposit (20% of the deposits) of the bank with the Central Bank of Iraq
(5% of it) is cash in the bank's vaults.

The average monthly rate for a period can turn statutory reserve requirements into a useful tool
For the purpose of absorbing the wide fluctuations of the liquidity of the bank and according to the daily situations and work stops
At 10% of the statutory reserve requirements for government securities, as a requirement
Separate for cash in the safe.


Existing Facilities:

When financial markets and more broadly, financial systems are underdeveloped, so do banks
Central to rely on existing facilities more than open market operations and in this respect
In particular, existing facilities as a safety valve for response may lead to unfair liquidity developments
Expected or to the various obstacles or inefficiencies that hinder an orderly redistribution of reserves
Via the interbank market. This safety valve function is also necessary, when
Understating the liquidity forecast, the new CBI law allows the bank to save money
Loans and deposit facilities These facilities and the lender of last resort will replace the facilities
Exposure and advances that were used, and the new law does not allow the exposure of deposit balances
Banks at the Central Bank of Iraq.


The purpose of the deposit facilities and the existing facilities is to give security to banks to manage a surplus
Its liquidity is within a moderate rate of interest rates, which broadens the policy objectives of the bank
Central Iraqi Central Bank related to short-term interest rates and in the absence of developed markets
For securities and interbank cash, in which the central bank's open market operations are managed
The Iraqi is expressing his view on the appropriate short-term interest rates
For monetary policy by finding the bank rate ("rate policy)" as an indicative rate
The existing and deposit facilities carry interest rates related to the bank rate and also provide the rates for example

This type of facility is an interest rate that fluctuates between depositing and receiving cash from the bank.
The Iraqi Central Bank for a specified maturity period (overnight investment) as this margin is necessary
To encourage banks to develop a market and easily manage liquidity between them without being present
Necessarily, a permanent deal with the Central Bank of Iraq and as soon as the interbank market develops
Remarkably, the objective of the Central Bank of Iraq in open market operations is to maintain the same
Short-term interest rates between banks are included in the price outlay of two types
Existing facilities.

The rates charged on existing deposit and lending facilities are floating at a level higher or lower than that
The prevailing prices in the money market, and until the development of dealing in the securities of the Ministry of Finance in
The money market and the secondary market between banks. Prices for these two types of facilities will be set
They have a relationship to the policy rate of the central bank, and the central bank must carefully monitor the price
In light of the monetary policy objectives, noting that the bank’s board of directors had set the bank’s rate at 6%.

Existing lending facilities

The existing pre-credit facility provides overnight credit to banks in exchange for a suitable collateral
The desire of banks to borrow as banks will be allowed to borrow in the overnight investment to the maximum amount
Possible in relation to the bank's capital (as long as the bank offers adequate collateral) and at an interest rate
Initial credit day. 

The interest rate will be set at a higher rate than the Central Bank of Iraq rate
The Board of Directors of the Central Bank set the initial credit rate at the bank’s rate plus 2%, ie
It becomes 8% and decreases in the future, when the initial interest rate expands and increases prudence
In the nature of the incidental and temporary facilities, a greater increase will be imposed when using the facilities
For a period exceeding 15 days for each month under the secondary credit facilities, it may be used
The primary credit bank is for a period of 15 days per month and can be used for additional days per month
The concerned person, subject to the prior approval of the Central Bank of Iraq, and in other cases, the bank may be used


Initial credit up to 20% of the bank’s capital, or it may be used in excess of the amount
Also specified subject to the prior approval of the Central Bank.

Secondary credit facilities have the same qualification scale as primary credit facilities, but it is possible
To be extended for longer periods and at a higher interest rate, and granted based on a decision by the Central Bank.

 To begin
A margin of (1) percent will be imposed over the initial credit price, to become 9%, and it is not beneficial
Banks may borrow additional money under these conditions and in circumstances in which they do not suffer from
Temporary banking crises as the Central Bank of Iraq has to settle and be covered
Lending to banks suffering from acute crises with last resort facilities, which will be discussed later
As part of the audit procedures imposed by the General Directorate of Supervision on
Banks and guarantee all the advances of the Central Bank of Iraq under these facilities with guarantees
Accepted by the Central Bank of Iraq, and it shall publish a list of acceptable guarantees for each type of
The facilities may be revised at any time. In principle, the matter relates to credit facilities
First, the Central Bank of Iraq must accept securities issued by the Ministry of Finance
Those with maturities of less than 180 days, as banks have to pledge their securities
In the securities deposit account of the Ministry of Finance by directing the Central Bank of Iraq
To indicate the required amount, which is a pledge in the guarantees account of the Central Bank of Iraq.


LLR facility

The Central Bank of Iraq law also allows lending to banks suffering from financial crises in Iraq
Under exceptional circumstances, as an example, a bank may declare bankruptcy as a result of malicious rumors or
The Central Bank of Iraq might grant a loan to a bank with insufficient solvency, but it continues to struggle
If there is a chronic shortage of liquidity, and for this purpose the bank will be in the two mentioned examples at pain
Intensive audit and it is expected that the audit procedures will continue in order to control the obstacles that suffer
Of them, and in general, what appears at first glance about the cause of the liquidity crisis lies in the inability to
Paying all debts at the same time.

In fact, many countries are making great efforts to support banks that suffer from deficiency
The ability to pay off debts by granting it loans to support its liquidity and through its public treasury
The Central Bank of Iraq does not have the condition that a bank lend to something that suffers from inability to repay
Debts, as the Central Bank of Iraq law specifically defined the conditions for exceptional loans
Article 30 of it and no such loans are granted unless the following conditions are met:

A- If the bank, according to the opinion of the Central Bank of Iraq, is able to pay it
To repay the debts and he had provided an adequate guarantee when borrowing and that his request from the bank

The Iraqi Central Bank is for its financial assistance and is based on the need to improve liquidity
Has or,

B - that such a request for assistance is necessary for the purpose of maintaining the stability of the financial system
The Minister of Finance shall issue a guarantee to the Central Bank of Iraq, written on behalf of
The government of Iraq pledges to repay the loan amount.

A last resort lender facility can raise the secured loan amount for periods
Longer and the central bank can accept collateral in conventional formats (taking care of their evaluation),
The interest rate charged on the lender of last resort facility will be the bank's rate
(Indicative price) that is determined by the Central Bank of Iraq, plus a percentage
 . 5.9%, to become 5.3%

Facilities on deposits

 The Central Bank of Iraq will create an existing deposit facility in which deposits can be accepted
For overnight investment from banks with excess balances.

The central bank cannot place deposits in the facility account unless the bank requests it to do so
Explicitly, the interest rate on such deposits is set at a lower rate than the bank rate specified by the bank
The Central Bank of Iraq will, in principle, set a rate of 2% less than the bank rate. 

This is The facilities will create a solid base for interest rates with very short terms and will help the bank to obtain
Finding stability to some extent when it predicts future interest rates, and until the development of the stock market
Government finance, where the central bank can efficiently manage the open market operations, the facilitation
Deposits can automatically withdraw excess liquidity from the banking sector.


Bank rate

The monetary policy of the Central Bank of Iraq expresses itself regarding the stated interest rates in the market
Cash is for short term periods. Currently, this market is underdeveloped and therefore cannot be relied upon for
Giving a picture of the policy of the Central Bank of Iraq, until the market or secondary market develops
In the area of ​​securities of the Ministry of Finance with short term maturities, the bank will focus
The Central Bank aims to determine the prevailing interest rates among banks for overnight investment by setting a rate
Indicative interest. 

This rate is called the bank rate. Banks are free to set interest rates
In dealing with one another in the market according to any interest rate agreed upon between them. The bank rate is
The indicative price at which the prices are determined in the primary and secondary market and for last resort loans


As well as overnight investment deposit rates. Therefore, the rate considered by the Central Bank of Iraq
Suitable to maintain price stability, and that its monetary policy will try hard to achieve stability
(That is by maintaining bank liquidity at levels in line with the bank's rate).

Open market operations

The central bank can influence bank liquidity (excessive reserves) and then influence
Short-term interest rates by buying and selling government securities. The process of selling
Securities in the market and from the assets of the Central Bank of Iraq will lead to the withdrawal of liquidity
From the banking system (i.e. by reducing bank balances in their reserve accounts with the bank
In contrast, the Central Bank of Iraq purchases from the market will increase from
Liquidity with the bank (that is, from its reserve account balances) such operations are for the market
The open will create an important secondary tool and provide effective liquidity management (in conjunction with currency auctions
Foreign).

Also, different strategies can be followed in open market operations, for example and for a purpose
Achieving long-term monetary growth, the Central Bank of Iraq may choose one of these strategies, adopting it
On the accumulation of foreign currency reserves, and the growth of the monetary impact of foreign currency reserves results
Whether in high or low prices, through the process of direct intervention for the purpose of imposing
Stability of the foreign currency exchange rate, which may impede the open market process,
Otherwise, such operations may be determined in order to create a state of stability in my liquidity
Banks and to maintain the market for short-term interest rates within the expense of facilitation rates
And deposits to the Central Bank of Iraq.

The open market operations depend on the basis of auction with banks, and such auctions are somewhat similar
What is with the foreign currency auctions, which are currently managed by the Central Bank of Iraq, and the bank will take
The Central Bank of Iraq should be taken into account, especially when government stock market operations develop
Purchase or buyback contracts as an effective tool in open market operations.



Khawla /




https://cbi.iq/static/uploads/up/file-153077893228064.pdf

claud39 wrote:It's great fun to have your comment on the subject, and I'll give you a big reason for what you're telling me !!

But we do not see it in the same way, here is my opinion on your questions, and above all I do not want to be right on the subject, but to give an opinion so that the forum world understands what is happening !! !


(The return -> Iraq <- to the international market. It is not the same as returning a currency and takes on a different meaning. Most of the articles you publish are about the return of Iraq, not the currency. .)

Quite right about it !!!

(The return -> Iraq <- to the international market. It is not the same as returning a currency and takes on a different meaning.)

This is RamblerNash what I wanted to say about your questioning, for me when I apply for the news of the day is to see the reality of the country, and not to rely on the gurus, so when I see the articles that the international alliance is pushing behind Iraq to return to the international market, and that France and the United States sign a big contract, and that French President Emmanuel Macron says that Iraq must return to the international scene !!

So for me, and you are right that I publish news of the return of Iraq, and not about the currency !!

I mention this I am not an economist, but when I read the news on CBI I notice that they are not in the open market (ie internationally) they are in the secondary market right now, if I understand good !!!

He is going to have a meeting with the WTO soon, it should have been done last fall, but it had been postponed, so for me if they are going to discuss between them, it is not to talk about the good weather, but to speak well of foreign trade, then the government must decide to put, and the CBI also a value on the international one !!

I am going to share with you an Arabic translation of the central bank that I was reading during my research !!!!




Claud (Moose)

RamblerNash wrote:As far as the Dinar currency rate, I know you are aware on what the IMF, UN, and WTO post as the rate, but have you asked yourself why the one posted by the CBI is so different?

RamblerNash wrote:Well...My question was why does the IMF have one rate, but the CBI has another? Maybe that translates better?

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CBI: Project deletion of zeros from the currency still exists

Wednesday 30 January 2019

Enlarge this image Click to see fullsize

CBI: Project deletion of zeros from the currency still exists


The Central Bank of Iraq that the project to delete zeros from the Iraqi currency is still standing. 

The director of the issuance and cabinets Abdul Karim Hassan Shannon that the project to delete the zeros was supposed to start in 2014, but security events and the control of the state regulation on five provinces led to delay, pointing out that the project is to delete three zeros from the current currency with the introduction of large currencies and currencies Metal. 
Shannon confirmed that the current cash volume in the markets is large at 44 trillion dinars.

[size=17]http://alrafidain.org/post/22705/%D8%A7%D9%84%D8%A8%D9%86%D9%83-%D8%A7%D9%84%D9%85%D8%B1%D9%83%D8%B2%D9%8A-%D8%A7%D9%84%D8%B9%D8%B1%D8%A7%D9%82%D9%8A-%D9%85%D8%B4%D8%B1%D9%88%D8%B9-%D8%AD%D8%B0%D9%81-%D8%A7%D9%84%D8%A3%D8%B5%D9%81%D8%A7%D8%B1-%D9%85%D9%86-%D8%A7%D9%84%D8%B9%D9%85%D9%84%D8%A9-%D9%85%D8%A7-%D8%B2%D8%A7%D9%84-%D9%82%D8%A7%D8%A6%D9%85%D8%A7
[/size]

[size=39]Iraqi Dinar revaluation postponed by Central Bank for 5 years says MP Noura al-Bajari[/size]

by Amre Sarhan

Oct 29, 2014, 11:54 pm

Baghdad (IraqiNews.com) A member of the Parliamentary Economic and Investment Commission, MP Noura al-Bajari, confirmed on Wednesday that the initiative to revalue and delete zeros from the Iraqi Dinar is ready for implementation by the Central Bank although it will be delayed by five years given the political and security situation of Iraq.

In an interview with IraqiNews.com al-Bajari said “The policy to delete zeros from the Iraqi currency is ready to be executed by the Central Bank, however, its implementation will be delayed by 5 years on the basis of the extreme security and political situation of the country.”

Al-Bajari said that the head of the Central Bank of Iraq had previously said that this policy from parliament was accepted and that the zeros will be deleted from the Iraqi currency in the next 5 years.

https://www.iraqinews.com/features/iraqi-dinars-project-postponed-5-years-says-central-bank/

claud39 wrote:[size=39]Iraqi dinar to have 3 zeros canceled by the Central Bank of Iraq according to Finance Commissioner[/size]




Apr 13, 2013,
















The Iraqi dinar will have 3 zeros canceled by the Central Bank of Iraq according to Finance 

 MP Abdul Hussein al-Yassiri.

MP al-Yassiri told Iraqi News that “it is supposed that this year will witness necessary preparations to cancel three zeros from the currency”.

He added that his commission supports such move for its importance to the Iraqi economy.

The Central Bank of Iraq, earlier, announced that cancelling the zeros is within a plan to develop monetary policies in the country.

One of the difficulties facing is Iraq is withdrawing 30 trillion Iraqi dinars from Iraq’s market at the present time and to replacing it with new currency.

Earlier, the ministry of finance ruled out the idea of cancelling the zeros in 2013 because the federal budget was based on the current currency.



https://www.iraqinews.com/business-iraqi-dinar/iraqi-dinar-3-zeros-canceled-by-central-bank-of-iraq-cbi/

Sunday, September 13, 2020

claud39 wrote:Here is another great RamblerNash example, ie trade between 2 countries, how to do business especially with the United States if there is no rate change in your opinion !!

Have a good day my friend !!


Claud (Moose)



Dr. Ali Allawi receives the Ambassador of the United States of America in Baghdad

Sunday, September 13, 2020

His Excellency the Minister of Finance, Dr. Ali Allawi, today, Sunday, 9/13/2020, at a library in Baghdad, received the Ambassador of the United States of America to Iraq.

During the meeting, the mechanisms for enhancing economic and financial cooperation between the two countries were reviewed and discussed. Where His Excellency the US Ambassador affirmed his country's full support for the plans and procedures that the Iraqi government is following, especially with regard to reforming and developing the economic and financial sector under the current circumstances.





http://www.mof.gov.iq/Pages/MOFBannerHeadlineDetail.aspx?BannerNewsID=842

claud39 wrote:When I read this article that comes from the government directly, not from the gurus !!

What I mentioned to you from the beginning RamblerNash, and here is an article which tells us that they are slowly coming back to the international market to be able to trade with them, as with the United States !!

  So for that !! In my opinion, and this is still my personal opinion, they must have an exchange rate to make commercial exchanges, and as I said from the beginning they must give training to the people on the new payment system for example !!

I believe this article is pretty clear of the direction they want to go.

It is up to you, dear forum members, to make your own opinion on the subject of dinars, good day everyone !!!




Claud (Moose)

The General Secretariat of the Council of Ministers sponsors the celebration of the launch of the electronic window program for company registration

9/13/2020

The Iraqi government launched the electronic single window program for company registration .

The General Secretariat of the Council of Ministers sponsored a ceremony in cooperation with the Ministry of Trade to launch this program, bearing the slogan "Together to improve the environment for business and investment performance in Iraq ."

The representative of the Secretary-General of the Council of Ministers, Dr. Turhan Al-Mufti, Chairman of the Committee for Follow-up to Resolution (245) on improving the business environment, stated in the opening speech of the ceremony, that despite the obstacles caused by the Corona pandemic, there is insistence on overcoming these obstacles towards the success of the project, which is an essential step towards simplifying procedures. Government and providing services in all fields .

For his part, the representative of the Iraqi Ministry of Trade praised in his speech the bilateral cooperation with the General Secretariat of the Council of Ministers for the success of this project .

The representative of the World Bank also expressed his pleasure at launching such a project that facilitates the practice of commercial activity at the technical level, appreciating the government's efforts to automate services, and pledging to continue the partnership of the World Bank with the Iraqi government to provide financial and technical support .

The celebration included a televised presentation of the program by UNCTAD experts , after which the program was officially launched .

It is noteworthy that the program was implemented in coordination with the Federation of Iraqi Chambers of Commerce and the Baghdad Chamber of Commerce and with the technical efforts of the United Nations (UNCTAD) and with the support of the Economic Department of the American Embassy .

http://cabinet.iq/ArticleShow.aspx?ID=9769

claud39 wrote:

claud39 wrote:[size=39]Iraqi dinar to have 3 zeros canceled by the Central Bank of Iraq according to Finance Commissioner[/size]




Apr 13, 2013,
















The Iraqi dinar will have 3 zeros canceled by the Central Bank of Iraq according to Finance 

 MP Abdul Hussein al-Yassiri.

MP al-Yassiri told Iraqi News that “it is supposed that this year will witness necessary preparations to cancel three zeros from the currency”.

He added that his commission supports such move for its importance to the Iraqi economy.

The Central Bank of Iraq, earlier, announced that cancelling the zeros is within a plan to develop monetary policies in the country.

One of the difficulties facing is Iraq is withdrawing 30 trillion Iraqi dinars from Iraq’s market at the present time and to replacing it with new currency.

Earlier, the ministry of finance ruled out the idea of cancelling the zeros in 2013 because the federal budget was based on the current currency.



https://www.iraqinews.com/business-iraqi-dinar/iraqi-dinar-3-zeros-canceled-by-central-bank-of-iraq-cbi/

He added that his commission supports such move for its importance to the Iraqi economy.

The Central Bank of Iraq, earlier, announced that cancelling the zeros is within a plan to develop monetary policies in the country.




Does this article talk about CBI monetary policy According to you RamblerNash !!

I come back to this, the project exists, and reconstruction will help their return to the international market, by exchanging currencies between them for reconstruction.

So in my opinion !! for all countries to participate in the reconstruction there must be a value of the dinar vis-à-vis the US dollar, and also the Canadian dollar, as for China ... so on!

Have a good day, I will come back later to share the news of the day !!



Claud (Moose)


The deposit is the basis for the legal reserve requirements, so foreign currency deposits cannot be preferred
And then (the dollarization process) (that is, the dominance of the dollar currency over the Iraqi dinar) and that is why
Requirements for deposits of dinars or foreign currency must be in dinar currency.




The open market operations depend on the basis of auction with banks, and such auctions are somewhat similar
What is with the foreign currency auctions, which are currently managed by the Central Bank of Iraq, and the bank will take
The Central Bank of Iraq should be taken into account, especially when government stock market operations develop
Purchase or buyback contracts as an effective tool in open market operations.





Summary of CBI policy tools
 ************************************


 The Board of Directors of the Central Bank of Iraq approved at the sixth meeting
On the twenty of August, new regulations for the legal reserve requirements and banking facilities
Attached herewith, this statement reviews the general features of the new regulations and explains the reasons for their adoption
For the purpose of strengthening the monetary policy management of the Central Bank of Iraq and in supporting the new program that
The Ministry of Finance adopted it in issuing securities.

The Central Bank of Iraq will issue initial instructions to implement the terms of the new regulations,
Changes were made to the regulations of the Central Bank of Iraq and its banking operations to give it control
Better on the money supply and at the same time it gives high confidence to the banks in terms of options
And the conditions for managing the liquidity of their banks, and it is expected that the stock markets will play
The government has an important positive role in managing bank liquidity in accordance with the new regulations and on the other hand
Banks are expected to strengthen their financial position to manage their short-term liquidity requirements
The term (or what is more generally called the market), when banks finally resort to the bank
Central as a last resort.

In order to clarify this, the Central Bank of Iraq will hold several meetings with banks in
The near future to discuss the proposed regulations.


The Ministry of Finance made a change in the method of financing the deficit in its revenues due to the restrictions
The new legal framework imposed upon it when borrowing from the Central Bank of Iraq due to its desire to
Conducting the development of an active market for government securities, according to the requirements of the Public Debt Law
Newly approved, all debt services will be paid in cash, which is why the government securities valuations were paid
With its interest, which are due on the first of July and October for their holders, as for the papers
Government finances owned by the Central Bank of Iraq will be treated according to an agreement concluded between the Ministry of Finance
And the Central Bank of Iraq to restructure the claims of the Central Bank of Iraq against the government,
The Ministry of Finance has already started issuing new securities to finance those owed by it, and they may be sold
New securities after being released on the secondary market.

The Central Bank of Iraq reformulated its banking relationship with banks to develop a market
It depends on new monetary policy tools for the purpose of facilitating the development of the new stock market
For the Ministry of Finance, there is no requirement for now from the banks to acquire equivalent securities
10% of total deposits (now included in the list of reserve requirements).


The Central Bank of Iraq will not deal in the future in the sale or purchase of securities as desired
In addition, the banks closed the exposure facilities and advances granted by the bank
The Central Bank of Iraq replaced it with new existing facilities for lending and deposits, which it approved
Recently, the bank’s board of directors, and the regulation of statutory reserve requirements, will come into effect in one month
November The Central Bank of Iraq may buy or sell securities for a ministry by a decision
Finance at banks according to a competitive principle for the needs and purposes of monetary policy (to be launched
All these instrument-related changes are detailed below
The new monetary policy: -

Monetary Policy Tools:

The formulation prepared by the Central Bank of Iraq for monetary policy tools serves to strengthen
The ability of banks to manage short-term liquidity, which is directed by the Central Bank of Iraq
The required monetary policy (which can be evaluated according to various intermediate variables, including
The yield curve, the exchange rate, and the amount of growth in the money supply) in terms of capacity
Liquidity management, the monetary policy tools adopted by the central bank must work with ASWAQ
Cash and other securities to create an effective payment system that gives banks confidence in meeting obligations
Pay it and have reasonable costs.

To be sure, the most costly to provide liquidity is by using additional reserves (such as cash in
Safes and balances with the Central Bank of Iraq in excess of the reserve requirements
Legal) as well as the margins of intervention (the difference between interest rates on deposits and on loans)
They can be reduced by allowing the banks to reduce their holdings of the returns arising from excess reserves
They do not bear interest and the ability of banks to reduce their excess reserves depends on finding intermediaries
Reliable liquidity management.

The Central Bank of Iraq has taken effective and influential tools on the liquidity market (basic cash), which are: -

1 - Foreign currency auctions in which the Central Bank of Iraq buys or sells dollars from
Or to the market in light of its political goals.

2- A list of statutory reserve requirements on which banks rely for possession
Customer deposits, i.e. with differential levels of deposits with the Central Bank of Iraq, cash
In the treasuries and securities of the Ministry of Finance.

3- Exposure facilities for banks that have reserve account balances in the bank
The Iraqi Central Bank, but it is not sufficient to settle its obligations at the end of the working day
Banker


4- The discount window for bills of exchange or similar bank notes with lesser terms
From 90 days and endorsed by at least two signatures (currently imposed at 11% for papers
First Class Finance).

5- Lender of last resort facilities, which are given to troubled banks
Chronic liquidity in exchange for a guarantee offered by it.

6- The Ministry of Finance's securities window and buy or sell such banks under it
Government papers at face value (i.e. at the interest rate upon issuance)
The aforementioned tools are insufficient to develop an effective market that directs the financial sector, in particular
Not suitable for developing a market with sufficient liquidity for government securities or for management
A market built on the basis of monetary policy, and we believe that foreign currency auctions are in place
Recently, they are working well and satisfactorily while other tools have been reformulated, as well
The legal reserve requirements do not provide banks with useful liquidity management tools and may confuse
In achieving the monetary goal as it subscribes to the requirements of government securities
Don't be a part of it.

The diversity of lending facilities is not very transparent and does not always serve its goals
Policy, and the Ministry of Finance's securities window provides sufficient liquidity, but with restrictive conditions
The development of secondary dealing and an interbank market.

 Moreover, the securities window
The Ministry of Finance suspended the role of the Central Bank of Iraq in monitoring one of the most important management tools
On cash, as they allowed banks to deal with the Central Bank of Iraq, to ​​buy or sell
Securities for the Ministry of Finance as granted articles 28, 29 and 30 of the Central Bank Law
The Iraqi has the authority to manage open market operations and to provide existing facilities to the banks
He laid the foundations for legal reserve requirements, and the authority granted him, in exceptional circumstances, that
The lender would be the last resort, as the aforementioned articles prepared the foundations for creating policy instruments
His speech, which will be approved by the Central Bank of Iraq in this field.

It is noted that the purpose of preparing the new statutory reserve requirements and facilities regulations
Banking is to facilitate the more effective liquidity management of banks in the market and encourage banks
To deal with each other more broadly, rather than dealing exclusively with the central bank
Al-Iraqi exclusively for liquidity management.

Below we list the main causes and features of each new tool: -

Legal Reserve Requirements:

In fact, the legal reserve requirements of the Central Bank of Iraq, and confirmed in
12/12/2003 are three separate requirements in unified instructions.

 It is required that the banks:

Freeze deposits are deposited with the Central Bank of Iraq, which is currently at 20% of liabilities
Deposits and / or current deposits for the previous month, at a rate of 5% of liabilities for savings deposits, and at a rate of 2%
Of fixed and / or temporary deposit obligations, in addition to that, the instructions include two basic requirements
Separate holders of securities of the Ministry of Finance and at least 10% of total liabilities
Bank deposits with a percentage of not less than 10% of the total deposit obligations. 

The request for withdrawal shall be considered
Reserve balances are not compensable, and statutory reserve requirements are declared by instructions
Before the Board of Directors of the Central Bank of Iraq and went to the General Directorate of Statistics and Research and to
The General Directorate of Credit and Banking Supervision. The banks report prepared in accordance with the instructions shall be sent
To the General Directorate of Accounts.

The statutory reserve requirements do not reflect best practices and accordingly, the Central Bank of Iraq
Establishing new requirements for the purpose of providing for the monetary policy needs of the market economy, and wherever they exist
Legal reserve requirements are generally seen as a monetary policy tool rather than a control tool
Accordingly, the responsibility for monitoring each bank is subject to the new requirements that have been implemented
Transferring it from the General Directorate of Credit Control and Banking to the General Directorate of Agreements
And loans, which in turn will bear the primary responsibility for embedding monetary policy as preferred
Preparing unified requirements for monetary policy purposes (i.e. the same for all reserve deposits).


The ratio of the new requirements shall be applied to all deposit liabilities with respect to the concept of cash
The cash multiplier (the ratio of the quantity of cash in relation to the base cash) is more stable and more dependent on it,
In addition, it has a neutral effect on the public’s choice of deposit maturities, which in reality are
It is preferred from a tax policy point of view as foreign currency deposits are also included

The deposit is the basis for the legal reserve requirements, so foreign currency deposits cannot be preferred
And then (the dollarization process) (that is, the dominance of the dollar currency over the Iraqi dinar) and that is why
Requirements for deposits of dinars or foreign currency must be in dinar currency.


The instructions imposed various requirements on banks' deposits with the Central Bank of Iraq
And on cash in the treasury, in fact, the new requirements have been standardized to be requirements
Identical meeting the cash obligations of each bank that maintains deposits in its current account or cash in the treasury
At the Central Bank of Iraq.


The initial return that banks achieve for the new requirements results from the possibility of the
Requirements are on an average basis rather than on a permanent basis.

The requirements will continue to be fixed for monthly periods, but the frozen current deposits are transferred to
A single clearing account for each bank, and the balances kept in its accounts are based on the rate
The average to meet the requirements can be deposited in Iraqi dinars with the Central Bank of Iraq
(And not in the existing deposit facilities) in addition to the new Iraqi cash in bank vaults
The bank may use its deposit or all of its deposits with the Central Bank of Iraq on any day as long as
The statutory reserve rate at the end of the working day (plus the average rate of the Iraqi dinar
The amount in the treasury cash) is equal to or more than the required amount.

The Board of Directors of the Central Bank of Iraq set the reserve ratio at 25% due to requirements
The new legal reserve allowed the banks to use the Iraqi dinar cash in the treasury for repayment
With the requirements, as it will grow with the increase in the assets of the statutory reserve and for the purpose of determining the effect of this
The change in the bank's liquidity (without raising the rate of requirements more than usual) was stipulated
The board of directors shall deposit (20% of the deposits) of the bank with the Central Bank of Iraq
(5% of it) is cash in the bank's vaults.

The average monthly rate for a period can turn statutory reserve requirements into a useful tool
For the purpose of absorbing the wide fluctuations of the liquidity of the bank and according to the daily situations and work stops
At 10% of the statutory reserve requirements for government securities, as a requirement
Separate for cash in the safe.


Existing Facilities:

When financial markets and more broadly, financial systems are underdeveloped, so do banks
Central to rely on existing facilities more than open market operations and in this respect
In particular, existing facilities as a safety valve for response may lead to unfair liquidity developments
Expected or to the various obstacles or inefficiencies that hinder an orderly redistribution of reserves
Via the interbank market. This safety valve function is also necessary, when
Understating the liquidity forecast, the new CBI law allows the bank to save money
Loans and deposit facilities These facilities and the lender of last resort will replace the facilities
Exposure and advances that were used, and the new law does not allow the exposure of deposit balances
Banks at the Central Bank of Iraq.


The purpose of the deposit facilities and the existing facilities is to give security to banks to manage a surplus
Its liquidity is within a moderate rate of interest rates, which broadens the policy objectives of the bank
Central Iraqi Central Bank related to short-term interest rates and in the absence of developed markets
For securities and interbank cash, in which the central bank's open market operations are managed
The Iraqi is expressing his view on the appropriate short-term interest rates
For monetary policy by finding the bank rate ("rate policy)" as an indicative rate
The existing and deposit facilities carry interest rates related to the bank rate and also provide the rates for example

This type of facility is an interest rate that fluctuates between depositing and receiving cash from the bank.
The Iraqi Central Bank for a specified maturity period (overnight investment) as this margin is necessary
To encourage banks to develop a market and easily manage liquidity between them without being present
Necessarily, a permanent deal with the Central Bank of Iraq and as soon as the interbank market develops
Remarkably, the objective of the Central Bank of Iraq in open market operations is to maintain the same
Short-term interest rates between banks are included in the price outlay of two types
Existing facilities.

The rates charged on existing deposit and lending facilities are floating at a level higher or lower than that
The prevailing prices in the money market, and until the development of dealing in the securities of the Ministry of Finance in
The money market and the secondary market between banks. Prices for these two types of facilities will be set
They have a relationship to the policy rate of the central bank, and the central bank must carefully monitor the price
In light of the monetary policy objectives, noting that the bank’s board of directors had set the bank’s rate at 6%.

Existing lending facilities

The existing pre-credit facility provides overnight credit to banks in exchange for a suitable collateral
The desire of banks to borrow as banks will be allowed to borrow in the overnight investment to the maximum amount
Possible in relation to the bank's capital (as long as the bank offers adequate collateral) and at an interest rate
Initial credit day. 

The interest rate will be set at a higher rate than the Central Bank of Iraq rate
The Board of Directors of the Central Bank set the initial credit rate at the bank’s rate plus 2%, ie
It becomes 8% and decreases in the future, when the initial interest rate expands and increases prudence
In the nature of the incidental and temporary facilities, a greater increase will be imposed when using the facilities
For a period exceeding 15 days for each month under the secondary credit facilities, it may be used
The primary credit bank is for a period of 15 days per month and can be used for additional days per month
The concerned person, subject to the prior approval of the Central Bank of Iraq, and in other cases, the bank may be used


Initial credit up to 20% of the bank’s capital, or it may be used in excess of the amount
Also specified subject to the prior approval of the Central Bank.

Secondary credit facilities have the same qualification scale as primary credit facilities, but it is possible
To be extended for longer periods and at a higher interest rate, and granted based on a decision by the Central Bank.

 To begin
A margin of (1) percent will be imposed over the initial credit price, to become 9%, and it is not beneficial
Banks may borrow additional money under these conditions and in circumstances in which they do not suffer from
Temporary banking crises as the Central Bank of Iraq has to settle and be covered
Lending to banks suffering from acute crises with last resort facilities, which will be discussed later
As part of the audit procedures imposed by the General Directorate of Supervision on
Banks and guarantee all the advances of the Central Bank of Iraq under these facilities with guarantees
Accepted by the Central Bank of Iraq, and it shall publish a list of acceptable guarantees for each type of
The facilities may be revised at any time. In principle, the matter relates to credit facilities
First, the Central Bank of Iraq must accept securities issued by the Ministry of Finance
Those with maturities of less than 180 days, as banks have to pledge their securities
In the securities deposit account of the Ministry of Finance by directing the Central Bank of Iraq
To indicate the required amount, which is a pledge in the guarantees account of the Central Bank of Iraq.


LLR facility

The Central Bank of Iraq law also allows lending to banks suffering from financial crises in Iraq
Under exceptional circumstances, as an example, a bank may declare bankruptcy as a result of malicious rumors or
The Central Bank of Iraq might grant a loan to a bank with insufficient solvency, but it continues to struggle
If there is a chronic shortage of liquidity, and for this purpose the bank will be in the two mentioned examples at pain
Intensive audit and it is expected that the audit procedures will continue in order to control the obstacles that suffer
Of them, and in general, what appears at first glance about the cause of the liquidity crisis lies in the inability to
Paying all debts at the same time.

In fact, many countries are making great efforts to support banks that suffer from deficiency
The ability to pay off debts by granting it loans to support its liquidity and through its public treasury
The Central Bank of Iraq does not have the condition that a bank lend to something that suffers from inability to repay
Debts, as the Central Bank of Iraq law specifically defined the conditions for exceptional loans
Article 30 of it and no such loans are granted unless the following conditions are met:

A- If the bank, according to the opinion of the Central Bank of Iraq, is able to pay it
To repay the debts and he had provided an adequate guarantee when borrowing and that his request from the bank

The Iraqi Central Bank is for its financial assistance and is based on the need to improve liquidity
Has or,

B - that such a request for assistance is necessary for the purpose of maintaining the stability of the financial system
The Minister of Finance shall issue a guarantee to the Central Bank of Iraq, written on behalf of
The government of Iraq pledges to repay the loan amount.

A last resort lender facility can raise the secured loan amount for periods
Longer and the central bank can accept collateral in conventional formats (taking care of their evaluation),
The interest rate charged on the lender of last resort facility will be the bank's rate
(Indicative price) that is determined by the Central Bank of Iraq, plus a percentage
 . 5.9%, to become 5.3%

Facilities on deposits

 The Central Bank of Iraq will create an existing deposit facility in which deposits can be accepted
For overnight investment from banks with excess balances.

The central bank cannot place deposits in the facility account unless the bank requests it to do so
Explicitly, the interest rate on such deposits is set at a lower rate than the bank rate specified by the bank
The Central Bank of Iraq will, in principle, set a rate of 2% less than the bank rate. 

This is The facilities will create a solid base for interest rates with very short terms and will help the bank to obtain
Finding stability to some extent when it predicts future interest rates, and until the development of the stock market
Government finance, where the central bank can efficiently manage the open market operations, the facilitation
Deposits can automatically withdraw excess liquidity from the banking sector.


Bank rate

The monetary policy of the Central Bank of Iraq expresses itself regarding the stated interest rates in the market
Cash is for short term periods. Currently, this market is underdeveloped and therefore cannot be relied upon for
Giving a picture of the policy of the Central Bank of Iraq, until the market or secondary market develops
In the area of ​​securities of the Ministry of Finance with short term maturities, the bank will focus
The Central Bank aims to determine the prevailing interest rates among banks for overnight investment by setting a rate
Indicative interest. 

This rate is called the bank rate. Banks are free to set interest rates
In dealing with one another in the market according to any interest rate agreed upon between them. The bank rate is
The indicative price at which the prices are determined in the primary and secondary market and for last resort loans


As well as overnight investment deposit rates. Therefore, the rate considered by the Central Bank of Iraq
Suitable to maintain price stability, and that its monetary policy will try hard to achieve stability
(That is by maintaining bank liquidity at levels in line with the bank's rate).

Open market operations

The central bank can influence bank liquidity (excessive reserves) and then influence
Short-term interest rates by buying and selling government securities. The process of selling
Securities in the market and from the assets of the Central Bank of Iraq will lead to the withdrawal of liquidity
From the banking system (i.e. by reducing bank balances in their reserve accounts with the bank
In contrast, the Central Bank of Iraq purchases from the market will increase from
Liquidity with the bank (that is, from its reserve account balances) such operations are for the market
The open will create an important secondary tool and provide effective liquidity management (in conjunction with currency auctions
Foreign).

Also, different strategies can be followed in open market operations, for example and for a purpose
Achieving long-term monetary growth, the Central Bank of Iraq may choose one of these strategies, adopting it
On the accumulation of foreign currency reserves, and the growth of the monetary impact of foreign currency reserves results
Whether in high or low prices, through the process of direct intervention for the purpose of imposing
Stability of the foreign currency exchange rate, which may impede the open market process,
Otherwise, such operations may be determined in order to create a state of stability in my liquidity
Banks and to maintain the market for short-term interest rates within the expense of facilitation rates
And deposits to the Central Bank of Iraq.

The open market operations depend on the basis of auction with banks, and such auctions are somewhat similar
What is with the foreign currency auctions, which are currently managed by the Central Bank of Iraq, and the bank will take
The Central Bank of Iraq should be taken into account, especially when government stock market operations develop
Purchase or buyback contracts as an effective tool in open market operations.



Khawla /




https://cbi.iq/static/uploads/up/file-153077893228064.pdf

One of the difficulties facing is Iraq is withdrawing 30 trillion Iraqi dinars from Iraq’s market at the present time and to replacing it with new currency.

Earlier, the ministry of finance ruled out the idea of cancelling the zeros in 2013 because the federal budget was based on the current currency.

claud39 wrote:Just so that we understand each other well RamblerNash !!

Is that what you're asking me to go see ???

If this is what you mention to me I agree with you, no value, but let's not forget that they are on the secondary market, and not at the level of international trade !!

Okay with you, but let them mark on their central bank documentary which tells us this !!!

 The deposit is the basis for the legal reserve requirements, so foreign currency deposits cannot be preferred
And then (the dollarization process) (that is, the dominance of the dollar currency over the Iraqi dinar) and that is why
Requirements for deposits of dinars or foreign currency must be in dinar currency.

To do this, and for the United States to trade with Iraq, it has to go international, so it has to have a value to trade with the United States, like before 2003, but it's not worth it. say they are going to have the same rate as 2003, but they could according to me, and that is only my personal opinion !!!
It would not surprise me that they start with 1 dinars = 1 American dollar, everyone who is in a hurry will jump in front of their eyes to close !!!

I believe and this is still my personal opinion, that they will start quietly and then resume their old value !!

Why I say this is that the former first Al-Abadi had mentioned in an interview with a journalist, and this news I had on the other forum where I applied before coming to this site, but unable to find this news, since I can't go to this site now !!!

Another example, the director of the central bank also mentioned that the plan to suppress still existed, but he was waiting for the right circumstances to move !!

The project to abolish the 3 zeros should have been done for 2014, but you know the reasons that this was delayed, namely the Islamic State when they attacked Iraq, and especially the city of Mosul at that time !!

I notice from my side, and I mention it once again that it is my personal opinion, that it is the best time to come back to the international level to start now the reconstruction of Iraq, I have always said it (When the construction, goes, everything goes).

It is with reconstruction, and with the private sector that will help their return to the international market, and revive the country, not with oil, but with petroleum derivatives, and as another example, be the construction of the faw port, this will give an opening to the middle east through Iraq !!

Especially to join the Silk Road, it will still help them to get Iraq back on its feet !!

A lot of advantage for them on their return to the international scene, and you know that they are going to have a meeting with the WTO soon, they are going to be delayed by a year, they will meet before the end of this year , they must have a good reason my friend !!!

Good day to all forum members !!


Claud (Moose)


IQD - Iraqi Dinar
▼

Iraq, Dinar

The Iraqi Dinar is the currency of Iraq. Our currency rankings show that the most popular Iraq Dinar exchange rate is the USD to IQD rate . The currency code for Dinars is IQD, and the currency symbol is د.ع. Below, you'll find Iraqi Dinar rates and a currency converter. You can also sign up for our currency newsletters to receive daily rate and analysis, read the XE Currency Blog or view IQD rates anytime through our XE Currency Apps and website.

Notice: IQD may be redenominated.

Complete list of currencies

Most Popular IQD Cross Courses

▼


USD SAR EUR MYR GBP INR CAD AED TRY/

[size=30] 35 [/size]
1 IQD	0.00084	0.00315	0.00071	0.00349	0.00066	0.06172	0.00111	0.00309	0.00628
Reverse:	1190.19	317,385	1410.00	286,571	1522.93	16.2031	903,583	324,082	159,261

2020-09-13 16:49 UTC
All 




figures are live average market rates , which are not available to consumers and are provided for informational purposes only. To see an estimate of our money transfer rates, please use our money transfer service.

Click on a rate to see its graph.

Currency facts

IQD Statistics
Name: Iraqi Dinar
Symbol: د.ع
Minor unit:
1/1000 = son
Most popular IQD conversion:
USD / IQD
Most popular IQD Chart :
USD / IQD Chart
IQD Profile
Inflation: 0.10%
Parts:
Frequently used: د.ع 25, د.ع 50, د.ع 100
Banknotes:
Frequently used: د.ع 50, د.ع 100, د.ع 250, د.ع 500, د.ع 1000, د.ع 5000, د.ع 10000, د.ع 25000

Central Bank : Central Bank of Iraq
Website: http://www.cbi.iq/
Users: Iraq
Have more info about the Iraqi Dinar?

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Amount
Of





USD United States dollar



AT

IQDIraqi dinar




1 USD = 1190.19  IQD

1 IQD = 0.000840200 USD
1 USD = 1,190.19 IQD

Converting Dollar US in Iraqi Dinar

Last update : 2020-09-13 16:45 UTC
Read important information about the IQD .

All figures are live [size=18]average market rates , which are not available to consumers and are provided for informational purposes only.


[/size]

[size=34]The Iraqi Chargé d'Affairs to Geneva meets with the head of the working group on Iraq's accession to the World Trade Organization / WTO[/size]




03/09/2020










The Chargé d'Affairs and Plenipotentiary Minister Dr. Abbas Kazem Obeid met in Geneva the head of the working group on Iraq's accession to the World Trade Organization, Ambassador Omar Hilal / Permanent Representative of the Kingdom of Morocco to the United Nations in New York, in the presence of the Director of the Accession Department at the World Trade Organization, Mrs. Maika Oshikawa and her assistance in The headquarters of the organization, and the two sides exchanged talks about ways to activate the file of Iraq's accession to the organization and the importance of continuing work in completing the technical documents to complete the requirements for joining and overcome the obstacles and challenges facing the accession process. 


In this regard; It was agreed to prepare training programs for members of the national negotiating team, as well as to discuss the importance of setting a new date for the high-level conference on Iraq's accession to the World Trade Organization, which was supposed to be held in Baghdad for the period 26-27 / 11/2019.





https://www.mofa.gov.iq/2020/09/?p=16874




Claud (Moose)