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Established in 2006 as a Community of Reality

Welcome to the Neno's Place!

Neno's Place Established in 2006 as a Community of Reality


Neno

I can be reached by phone or text 8am-7pm cst 972-768-9772 or, once joining the board I can be reached by a (PM) Private Message.

Established in 2006 as a Community of Reality

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Established in 2006 as a Community of Reality

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    Central Bank Governor reveals upcoming meeting in New York to discuss sanctioned banks

    Rocky
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    Central Bank Governor reveals upcoming meeting in New York to discuss sanctioned banks Empty Central Bank Governor reveals upcoming meeting in New York to discuss sanctioned banks

    Post by Rocky Thu 08 Aug 2024, 6:43 am

    [size=46]Central Bank Governor reveals upcoming meeting in New York to discuss sanctioned banks[/size]
    Economy
    21:27 - 2024-08-07
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    The Governor of the Central Bank, Ali Al-Alaq, said on Wednesday that the financial situation in Iraq is proceeding according to plan, and while he confirmed that financing foreign trade is being carried out smoothly for large and medium-sized companies, he spoke about a new mechanism to regulate transfer operations for small traders, and revealed an upcoming meeting in New York to discuss the file of sanctioned banks, and indicated at the same time that the official exchange rate covers foreign trade that meets the needs of citizens, and confirmed on the other hand that there is a government trend to increase the capital of the Real Estate Bank and the Housing Fund.

    The financial situation in Iraq
    Al-Alaq said in an interview with the official agency: "There are external and local challenges, but in general the financial situation in Iraq is still proceeding according to what was planned in the state's general budget," indicating that "there is high coordination between the Central Bank, the Prime Minister and the Ministry of Finance in standing on the financial side for its continuity, stability and sustainability."

    He added, "We are currently working closely and almost daily with the Ministry of Finance to implement the financial plan drawn up in the general budget, in a way that ensures coverage of its objectives, programs and existing needs," noting that "for the first time, by virtue of the new budget and financial management law, the allocations of governorates and ministries are being rotated, so there is broad coverage of the needs of the financial side, and for the first time, the size of the balances available to ministries and governorates is large enough to enable them to perform their role."

    Foreign Trade
    He stated that "the Central Bank is undergoing a major transformation process in reorganizing foreign trade in a way that secures several goals at once, and among these goals is the transparency of operations in foreign transfers that start from the transfer process and the transferor to the final beneficiary and to the source through all data, documents and information that enhance and match reality," explaining that "this process is taking place for the first time in the history of Iraq and international auditing institutions participate in it and audit the information before it reaches the implementation stage, as the process meets all local conditions and standards represented by the Anti-Money Laundering and Terrorist Financing Law or international standards, then the transfer operations proceed, but if there is any deficiency, defect or suspicion in it, it is rejected directly and returned."

    He stated that "the previous audit process was conducted but with a subsequent process and the audit processes may remain for years, but now the process does not proceed unless it is sound in its aspects, parties, documentation, reinforcements and the facts on which it is based," explaining that "any transformation process requires time and understanding between all parties and also acceptance."

    He stressed that "the level of acceptance of this new system has been engaged in by large and medium-sized importing companies, thus ensuring all their imports with high fluidity, and this is very necessary," noting that "the problem of small traders, some of whom have entered this process and others are still hesitant to enter or are looking for other means to cover their foreign trade, either to escape tax or customs accountability or the procedures required for the process of opening accounts."

    He explained that "what we are focusing on in the current and upcoming phase is to make everyone involved in the sound fundamental channels," noting that "the presence of these small traders outside the system puts pressure on the dollar money market and causes it to rise."

    He pointed out that "there are solutions that we are working on with international and financial institutions in order to organize the operations of small traders," explaining that "a meeting was held yesterday in this regard to complete previous meetings and we need some time to organize this remaining process of foreign trade." 

    The suspension of other international currencies
    Regarding other currencies, Al-Alaq confirmed that "the Central Bank opened channels for the Chinese, Turkish, Indian and Emirati currencies, which are currencies that represent a large weight in foreign trade, as there was a suspension for a period due to a new regulation that aims to provide sufficient control over these operations; because we discovered in the previous formula that there was some fraud in the use of these channels, whether for unrealistic sources or the return of amounts from one country to another," explaining that "a new audit mechanism has been put in place by an international company and we have finished organizing this process and it is now in the process of starting again."

    He pointed out that "commercial foreign transfer operations are subject to review by the specialized international company, which acts as an intermediary between Iraqi banks and the correspondent bank, so that the correspondent bank can be assured that these operations are sound and audited." He pointed out that "some banks have correspondent banks and others do not have internationally accredited correspondent banks, and now they are seeking to do so, but they have been very late, and the Central Bank has continuously urged the opening of relations with correspondent banks, because an Iraqi bank without external correspondents is considered a local bank and cannot open up to the world."

    He stressed that "our banks, after getting to know the banks and realizing the importance of these relations, began to move towards those banks, and the Central Bank, for its part, supports this trend and helps with it."

    The price difference between the market and the official price 
    Al-Alaq stressed that "in light of the new regulation of the external transfer process, the real price at which the Central Bank sells more than $250 million daily at the official price should be considered, which means that the bank covers foreign trade and this explains why there is no inflation or rise in prices and other legitimate demands of individuals with all their needs, and the parallel market is a market for those who do not want to go towards the fundamental methods of transfer and be illegal trade or trade escaping from fundamental procedures or other illegal operations such as drug trafficking or human trafficking or corruption money and others," explaining that "the Prime Minister confirmed that we do not provide the official dollar for illegal operations."

    Al-Alaq wondered, "Why would any party go to buy the dollar at a higher price while the official price is available to them? Unless they have an illegal purpose or an unorthodox matter," noting that "the view that the dollar price has risen or fallen is not a correct indicator, as we must look at what and how much the Central Bank sells at the official price to liquidate various needs."

    Low inflation
    He pointed out that "the main objective of the Central Bank is to maintain the general level of prices and reduce inflation. This is supposed to be the measure of the success of monetary policy, which has succeeded in controlling this aspect and the level of inflation compared to other countries and even in previous years is much lower, and within the target. This means that foreign trade, on which Iraq depends mainly to meet the needs of citizens, is covered by the official price."

    Cooperation with the US Treasury
    Al-Alaq continued, "There is great praise in all meetings with international organizations, including the International Monetary Fund, the Federal Reserve, and the US Treasury, for the transformations, management, and organization of the foreign transfer process at the Central Bank of Iraq at the present time," explaining that "the Assistant Undersecretary of the US Treasury mentioned in his meeting with the Prime Minister the need to celebrate the achievements made in the foreign transfer process and the stages that the Central Bank of Iraq has moved through, including the electronic platform, which went through stages and difficulties and then settled to a situation where the rejection rate for operations at times reached 80 percent and now does not exceed 5 percent."

    He stressed that "the platform formula burdens the Central Bank and external parties, including the Federal Bank, which we should not be preoccupied with as central banks by entering into the details of transfer operations, so what we have done is the gradual transition from the electronic platform to creating a direct relationship between the Iraqi bank and the correspondent without going through the Central Bank or the Federal," noting that "we have reached an achievement rate of about 85% in the foreign transfer process without going through the US Federal Reserve, and this is what international organizations say is something that should be celebrated."
    He explained, "Our plan until the end of the year will reach 100%, with foreign transfers between Iraqi banks and correspondent banks, without going through the US Federal Reserve, and at that point the role of the Central Bank will be normal, such as supervision, control, follow-up and looking at the progress of operations without entering into the detailed daily executive procedures."

    An expected meeting in New York.
     Al-Alaq said that "there will be meetings with the Federal Bank and the US Treasury Department at the end of August to review all aspects related to foreign transfer operations and discuss sanctions on some banks," noting that "what appeared in terms of talk, interpretations and additions to what happened in the previous meeting in Washington was not, in fact, the quarterly meeting and we did not meet with the Federal Bank, but rather we attended other meetings and there was a visit on this occasion to the US Assistant Secretary of the Treasury and a normal meeting that discussed general matters and during which he confirmed the success of the Central Bank in leading the steps it is taking, whether with regard to foreign transfers or the cash sale of the dollar, which has also been developed to ensure that the traveler obtains the dollar, indicating that previous operations in granting dollars to travelers were hindered by many problems and speculators tried to enter these operations by various means, which negatively affected the dollar as well as the use of other people's passports."

    He pointed out that "the new mechanism ensures the elimination of these methods, as the dollar is not given to the traveler until after the departure stamp," explaining that "the process began a few days ago, but in general it is proceeding smoothly with some observations, and there are teams present at the airports to monitor the process and obstacles, and this will ensure 100% in achieving our goals, which is to reach the real traveler, as we started in Baghdad, then Basra, then Najaf, and now the procedures are based on opening the outlets at the airports of Erbil, Sulaymaniyah and Kirkuk."

    Lifting restrictions on banks
    Al-Alaq explained that "lifting restrictions on some banks is receiving attention from the Central Bank, which has come close to resolving the problems and developing appropriate solutions to ensure stability and growth for the banking sector," indicating that "several meetings were held on the issue of lifting restrictions on some banks, and through them we reached a plan that will ensure stable results for the future."

    He continued, "The plan related to reforming and lifting restrictions on banks includes two axes: the first relates to conducting an audit of previous operations that were suspected by an independent external audit office, some of which have been completed, while we await the completion of the audit of others so that we can understand the overall picture and classify the nature of these problems and how procedures will be taken regarding them later."

    He pointed out that "the second axis of the plan is receiving international acclaim through the Central Bank contracting with an international consulting company to work on developing a strategy for the banking sector in the future, determining the size of the existing problem, placing it in an independent framework, preventing its recurrence, and reformulating the banking sector," noting that this plan is based on an inventory of the size of the banking sector in Iraq, the number of banks required to be in Iraq, the size and activity of these banks, and what are the rules, policies, and procedures they adopt in order to be stable and accepted locally and internationally.

    He explained that "this plan was initiated by the Central Bank through the consulting company, and it will take time to determine the scope of work and the goals we want to achieve," indicating that alongside this plan, another plan is being implemented to reform the government banking sector.

    Al-Alaq pointed out that "the Prime Minister holds monthly meetings with the international consulting company concerned with reforming the government banking sector," noting that "the continuous follow-up by the Prime Minister has given momentum to the progress of reform operations, whether at the governmental or civil levels, and that deciding the fate of these banks will be based on clear foundations, not patchwork treatments or uncalculated reactions."

    Al-Alaq pledged to reach a real stable banking sector that is consistent with what is required at the national economic level and that some banks will not remain marginal and do not represent a real addition to the Iraqi economy and that they will gain external acceptance through an agreement to implement international policies, procedures and standards.

    Al-Alaq explained that "the Central Bank did not specify a share for foreign transfers for banks and they can submit what they can attract from foreign transfer transactions, and the Central Bank does not interfere in the choices of customers and that the banks that carry out this process rely on their capabilities to attract their customers." He

    pointed out the Central Bank's efforts to strengthen and support the role of the Trade Bank of Iraq to assume a greater role in the foreign trade process, denying any talk of reconsidering the exchange rate issue.

    Housing Initiative 
    The Governor of the Central Bank revealed the existence of a government trend that was established in the budget to increase the capital supporting this file through the Real Estate Bank and the Housing Fund. 

    Al-Alaq said: "Although the task of financing the housing sector is the responsibility of the banks or the task of the Real Estate Bank and the Housing Fund, the Central Bank's initiatives played an exceptional role in an attempt to fill the deficit in the housing issue." 

    He added, "The natural and required role called for by the Central Bank was to increase the capital of the Real Estate Bank and the Housing Fund; so that it can perform the task assigned to it, especially since the capital is insufficient to meet the requirements and large and wide needs in financing this aspect." 

    He continued, "The government was expected to increase the capital of the Real Estate Bank and the Housing Fund to support the population sector, and it seems that this has been achieved and included in the budget, but it has not been implemented yet." 

    He explained, "When we visited the Real Estate Bank, we went into the details of the situation in order to determine the real need for the required financing, and we found that the requests available to the Real Estate Bank are divided into two sections, one of which relates to purchasing housing units outside the complexes in all governorates, and these are mostly old requests, and we asked the Real Estate Bank to provide statistics on all these requests, and we will try to cover them all in order to close this file." 

    He added, "The second aspect relates to the residential complexes, as we were financing the Real Estate Bank with amounts to distribute to the complexes in the governorates regardless of the priorities because we do not want the Central Bank's financing to be an alternative to the investor's own obligations in financing the project." 

    He continued, "Therefore, and as part of the Central Bank's move, the Real Estate Bank was directed, in order to encourage the investor to complete the project and deliver the units, to direct it to make the completion rate the basis for financing, as we start with the complexes that have ready or semi-ready units at rates ranging between 80-90% to achieve two goals: the goal of pushing investors to complete these complexes, providing job opportunities, supporting market movement, and meeting the needs of citizens as quickly as possible."
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