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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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    Winners and losers from the fluctuation of the dollar exchange rate against the dinar in Iraq

    Rocky
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    • Post n°1

    Winners and losers from the fluctuation of the dollar exchange rate against the dinar in Iraq Empty Winners and losers from the fluctuation of the dollar exchange rate against the dinar in Iraq

    Post by Rocky Wed 11 Sep 2024, 4:32 am

    [size=35][size=35]Winners and losers from the fluctuation of the dollar exchange rate against the dinar in Iraq[/size]
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    Alsumaria News - Economy

    Despite the long period of time since the start of the electronic platform to monitor the movement of the dollar, the exchange rates of the dinar against the US currency still experience a large disparity between the official price announced by the Central Bank, which is 1320 Iraqi dinars per dollar, and the black market price, or what is known as the parallel price, which ranges between 1490 and 1510 Iraqi dinars per dollar.


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    At the beginning of 2023, Iraq announced the adoption of an electronic platform to monitor the movement of dollar sales and money laundering operations, after warnings issued by the Federal Reserve (the US Central Bank), in addition to the US Treasury Department punishing several local banks for their involvement in suspicious activities.



    The electronic platform for foreign transfers managed by the Central Bank of Iraq, in its first phase, is based on reorganizing financial transfers to ensure proactive control over them instead of subsequent control by the Federal Reserve auditing daily transfers.

    On February 7, 2023, the Iraqi Council of Ministers approved the decision of the Board of Directors of the Central Bank of Iraq to amend the exchange rate of the dollar against the dinar, equivalent to 1,300 dinars per dollar after it was 1,480 dinars per dollar.

    On the fourth of this month, the Central Bank of Iraq announced the imminent termination of the "electronic platform" through which US dollar transfers abroad are carried out, indicating - in a press statement - that during the year 2024 and up to now, 95% of the transfer process has been achieved from the electronic platform to "correspondent banks", which means that only about 5% of it remains within the platform, which will be transferred using the same mechanism before the end of this year and according to the plan.

    This decision by the Central Bank raised many questions about the extent to which Iraq was able to prevent the smuggling of hard currency, stop money laundering operations, and the extent to which economic measures succeeded in controlling currency smuggling and controlling the price in the market.
     
    * Winners and losers from the fluctuation of the exchange rate
    Abdul Hassan Al-Ziyadi, a member of the Board of Directors of the Iraqi Businessmen Union, confirmed that the primary beneficiaries of the fluctuation of the dollar exchange rate against the dinar in Iraq are currency smugglers and price speculators, adding that the primary victims are Iraq and the citizen.

    Al-Ziyadi said, "The dollar crisis in Iraq has affected all aspects of commercial and non-commercial life," adding, "Traders have been harmed by the rise in the dollar exchange rate, and citizens have also been harmed because the instability of the exchange rate destroys the family's income and monthly resource."

    He continued, "If Iraq wants to free itself from this confusing situation, it must first get rid of the import of many goods and rely on manufacturing them locally to reduce the need for hard currency, in addition to developing agriculture," considering that "the Iraqi government and the Central Bank are primarily responsible for the failure of the currency sales platform."

    *Draining funds
    Hussein Nima Al-Karaawi, an economic researcher and member of the General Authority of the Iraqi Accountants Syndicate, pointed out that Iraq's entry into the American "SWIFT" system in 2023 was the reason for many traders to refrain from the currency selling platform and turn to the black market for fear of their funds being seized, in addition to the lack of mechanisms to help traders avoid seizing their funds.

    Al-Karaawi said that "the price difference between the dollar and the dinar at the official or parallel price exceeds 17 points per dollar, so what about very large amounts?" He considered that "this matter represents a drain on funds." He

    added that "sales have declined significantly in Iraq due to the change in the exchange rate and the lack of real control over exchange rate fluctuations in the market," explaining that the reason is due to the presence of border crossings outside the government's control that are exploited by some dollar smuggling gangs.

    Al-Karaawi believed that "the citizen is the one who pays the tax on the fluctuation of the exchange rate. Although the financing for imported goods is through the platform at the official price, many goods and commodities are actually sold in the local market at the parallel dollar price."
    He said that the platform used to sell up to $280 million per day, but the amount has now dropped to less than $240 million per day, adding that the difference between the two amounts goes to smuggling and the parallel market. Al-

    Karawi confirmed that "the government and the Central Bank have taken many measures internally and externally to control the smuggling process and control the exchange rate."

    He explained that some banks were harmed by the ban imposed on them by the US Federal Reserve and by smuggling operations, which contributed to raising the exchange rate on the black market. He also indicated that reducing the exchange rate of the dinar against the dollar also harmed the government's revenues, because its revenues depend on selling oil and receiving dollars in exchange for it, then selling it on the official platform to banks and traders.

    Controlling border crossings
    Spokesman for the Chamber of Commerce[You must be registered and logged in to see this link.]Rashid Al-Saadi believes that controlling border crossings and automating departments concerned with import and export are the only way to control currency smuggling.

    Al-Saadi said, "There are parties that have tried to thwart the currency selling platform to benefit from illegal transfers."

    He added, "Iraq has lost large sums of money as a result of smuggling goods and hard currency and manipulating the valuation of goods from border crossings."

    As for citizen Ahmed Jabbar, who owns grocery stores, he called on the Iraqi government to support the economy and enhance the purchasing power of citizens by strengthening the local currency and supporting local industry and agriculture.

    Jabbar said, "Sales in dollars have affected the Iraqi market. We encourage the government to limit dealing in the local currency as it contributes to the stability of the market and the economic situation of citizens."
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