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Baghdad Today - Baghdad
Financial and economic expert Alaa Al-Fahd revealed, today, Saturday (October 19, 2024), the authorities responsible for protecting the Iraqi currency from counterfeiting and its spread in the markets.
Al-Fahd told News Outlets, "The mission of the Central Bank of Iraq is to issue currency and maintain monetary policy and coordination in this field. As for the issue of counterfeit currency, this is the responsibility of the specialized executive government agencies. The bank's goal when it issues its currency is to work on finding ways to protect this currency from counterfeiting, and this matter exists in all countries of the world."
He added that "the issue of gangs and currency counterfeiting mafias is not within the tasks and duties of the Central Bank to confront, even the issue of currency smuggling is not within the Bank's tasks," indicating that "these issues are the responsibility of the specialized executive government agencies, including the security agencies, and for this reason the Central Bank of Iraq always works to coordinate with those government agencies in order to preserve the Iraqi economy and currency."
The expert confirmed that "even the dollar is a counterfeit currency, not only in Iraq but in most countries of the world, and this is not the responsibility of the Central Bank of Iraq, but rather the responsibility of the specialized executive government agencies."
It is noteworthy that the Ministry of Interior announced today, Saturday, the arrest of an international gang in possession of "counterfeit" currencies in Baghdad .
The ministry said in a statement received by "News Today", "Through activating the intelligence effort and pursuing organized crime gangs, accurate information was provided indicating the presence of a gang in the Sadr City area, east of the capital, Baghdad, that is counterfeiting currency and distributing it in local markets ."
She added, "Judicial approvals were obtained and a working team was formed from the Directorate of Combating Organized Crime in the Federal Intelligence and Investigation Agency in the Ministry of Interior and moved to Sadr City, where the gang of 8 suspects was lured and arrested, and counterfeit sums of money amounting to 10 million Iraqi dinars in different denominations were seized, in addition to dollar bills in denominations of one hundred dollars and fifty dollars and counterfeit euro bills ."
“Two printers used in counterfeiting operations were also seized, as well as a yellow Renault wheel used in distributing counterfeit currency,” she continued, stressing that “legal measures were taken against the accused, and it was proven through the investigation that there is a person residing outside the country who visits the home of one of the accused from time to time and brings new and modern editions of counterfeit currency, which are distributed in Baghdad and Basra through one of the accused who has a relationship with one of the arrested accused .”
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When a country goes through a time where they decide to introduce new currency there are many things that has to be considered. Counterfeiting is at least one of them. ~ MM
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Snippets:
Turkmenistan model: Introducing a new currency is a complex process—one that Turkmenistan completed successfully
The central bank must assess the extent to which "counterfeit banknotes" circulate. Together with the ministry of finance and the commercial banks, it should formulate a strategy to avoid an increase in ""counterfeit currency"" during the critical implementation stages of the currency reform.
The central bank should prepare a budget for the entire currency reform early on and revise it as necessary over time. The IMF can offer technical advice on preparing such a budget.
Introducing a new national currency is a highly complex project, which requires a well-functioning accounting system. Throughout the various stages, tested systems must be in place for independent auditors to safeguard the integrity of the currency reform, by ensuring correct reporting and accounting of the currency exchange. Failure in this area is not only costly but also potentially devastating to the currency reform’s reputation.
Important as all these preparations are, the success of a currency reform depends just as much on a successful public education campaign. The central bank needs to coordinate this campaign with other agencies, financial sector representatives, merchants, and the general public. A delicate balance must be struck between providing sufficient public information and the need for confidentiality to avoid releasing clues to ""counterfeiters"" that could be used to undermine the integrity of the new currency. The information campaign should encourage people to deposit their cash currency in accounts at banks. The campaign must make it clear that once the currency reform is initiated, account holders can withdraw their money in the form of new banknotes. ""A second important point for the public education campaign is timely information on the stages of the currency reform to discourage a run on banks with ""temporary liquidity problems.""
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With counterfeiting having been taken seriously over the last couple of years by the authorities, we can see by the Turkmenistan model for currency reforms we can see that is a need to have a plans to protect the currency change that is coming into play. The Central Bank and Commercial Banks along with government authorities take it serious and will typically draw up plans to counter illegal behaviors like counterfeiting. Todays news shows they are being successful with their plans and in combating the problem by making arrests.
Another interesting issue is there needs to be an education for the citizens on the various stages of currency reform the country is in to discourage a run on banks with temporary liquidity issues. In Iraq's case did we not see a plan by the Iraqi Trade Bank saying they have an imminent opening of branches for cash deposits only? We sure did. The Cash Only Deposit Center was brought out back on 10/14/2024. It was our first clue of them using the deposit only for customers approach. It would fit the plan of discouraging a run on banks for withdrawals if a run was to occur.
The expected deposits at these centers is likely to be from the hordes of cash that the public has been holding on to for years. The plan is to use specific branches around the country for ""deposits only"" that are likely being created by the Government and Central Bank giving the people an incentive to bring the money into those centers. Those customers that make large deposits will be having the deposits reflected into their electronic card accounts and would likely be accessible for spending electronically at first. Once the pressure of the deposit subsides they'll likely have to introduce the new currency to the public or around or at the same time, with only small amounts of the their new money being released then. imo We shall see.. But based off the Turkmenistan model it very well may be similar to what they have shown to work and successfully in the past to work again.
Keep in mind that the Rafidain Bank has scheduled timings for the implementation of the comprehensive banking system with an approximate 44 branches completed. In addition, there are Federal Bank Branches in the Kurdistan region as well, and they'll be for localization for the employees salaries. The goal it to restore confidence to the people regarding banking. This all together seems to paint a very exciting picture for the people of Iraq and effectively to investors around the world. We shall see if this holds true or even close to it. It sure looks good to me though!! imo ~ MM
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