Central Bank Related V

Central Bank begins to re-structuring of the local currency

2011-08-04 09:53:00

خاص _بغداد بوست _ Special Baghdad Post

قرر البنك المركزي العراقي الشروع بعملية إعادة هيكلة العملة المحلية وأستحداث نقود معدنية بتعاون مع منظمات دولية وخبراء اقتصاديون من العالم. Iraqi Central Bank has decided to begin the process of restructuring and the development of the local currency coins in cooperation with international organizations and economists of the world.

وقال نائب محافظ البنك المركزي مظهر محمد صالح لـ"بغداد بوست " إن " البنك المركزي اتفق مع المؤؤسات المالية الحكومة على إعادة هيكلة العملة وتنظيمها وأستحداث نقود معدنية ". The deputy governor of the Central Bank of the appearance of Mohammed's "Baghdad Post" that "the central bank agreed with the Government to Almaasat financial restructuring of the currency, organization and development of coins."  

وأضاف الى إن " البنك المركزي قرر أستحداث عملية معدنية في الاشهر الثلاثة المقبلة والتي ستكون من فئة 1000دينار و500 دينار ". He added that "the central bank decided to introduce the metal in the next three months, which will be the class of 1000 dinars and 500 dinars."

وأشار إن " البنك المركزي العراقي أجراء اتصالات واسعة للتنسيق مع منظمات دولية وخبراء من العالم ليأخذ هذا القرار طريقه". He noted that "the Central Bank of Iraq conduct extensive contacts to coordinate with international organizations and experts from the world to take this decision his way."

وتتلخص The main   مهام البنك المركزي Functions of the Central Bank   العراقي بالحفاظ على استقرار الأسعار، وتنفيذ السياسة النقدية Iraq to maintain price stability, monetary policy implementation   بما فيها سياسات أسعار الصرف، وإدارة Including exchange rate policies, and management   الاحتياطات من Reserves   العملة Currency   الأجنبية، وإصدار Foreign, and issue   وإدارة And management   العملة، إضافة إلى تنظيم القطاع المصرفي Currency, as well as to regulate the banking sector

As for three zeros, stay tuned for the results!

Posted: July 25, 2011 by THE CURRENCY NEWSHOUND 

Yasser incumbent moving the monetary authority in Iraq, led by the Iraqi Central Bank to raise three zeroes from the national currency in circulation and the target as they say, to rein in inflation and bring down prices and the disposal of large blocks of cash.

This action or this experiment passed by several states, according to economists.

The mere launch of a statement such as this kind of news make a citizen was looking forward to caution many of the stakeholders, the owners are asking for money, effects that may result from this procedure (deletion of zeros).dealer assumed it owed ​​Haider shop owner assumed also 100 million dinars says Alaa: How can I accept 100 thousand dinars of Haider in the case of deleting three zeros?.

Recognize all or most of us recognize that our environment is weak in economic culture where not understand all that the deletion of zeros will will not affect the trading or day of the debts of the others it will lead to the result of the escalation of the balance of lawsuits in the courts inevitably the time complaining about the courts of numerous cases and the latter due to the small number of judges, a fact well known, this is one of the effects that may result from the deletion of zeros.

So it requires a plan of awareness of high-level to address such conflicts and explain to the citizen in advance not to damage due to the deletion of zeros, and this requires a program of work and time enough to mature this idea and this is the duty of the central bank cut and before starting procedures delete a timely manner.

one expert said to me in replying my question about the potential effects of the deletion of zeros that Turkey has gone through this experience, as allowed in time to the dealing and trading in the two currencies at once and to the long period of time until they realize all segments of society that there is no damage due to the deletion of zeros.

We find in this experiment optimal solution in addressing the problems social and rid the courts of the huge amount of cases assumed the one hand and on the other hand, this procedure Siksam back prices that may be trying to rise as a result of this procedure.

and there really should not be overlooked that a number of officials call media statements at random without prior planning or knowledge and expertise effects economic consequences for the remarks hurt the national economy Arafah or without the knowledge of that repeat the claim to the concerned authorities of the need to develop a program Awareness large displays for long periods before the announcement of a deletion of zeros in order to address all possibilities or effects that may result from the deletion of zeros and the officials who make statements without explanation tell them enough is enough and you launch Bjahh optimistic statements and clear the mercy of our economy which is recovering and hope to have benefited from the mistakes change the currency after the fall of the dictatorial regime.


CBI Advisor would be surprised if executive, legislative branch calls for a delay in changing of currency

Posted: July 25, 2011 by THE CURRENCY NEWSHOUND 

Advisor to the Central Bank Surprised the Draft Decision to Delay Change Currency

Surprised at the appearance of the central bank adviser Mohammed Saleh, deciding to delay a project to change the currency of Iraq by the executive and legislative branches,stressing that the project will come out of economic problems and conflicts in Iraq.

He attributed the benefit of reasons to change the Iraqi currency was the result of inflation happening in Iraq as well as to improve the value of the Iraqi currency, calling the government to speed up the Iraqi currency to the feminine and re-structure to facilitate cash transactions and projects.

He stressed “the need for feminine Iraq because the Iraqi currency has today [30] trillion Iraqi dinars.

He explained “with the growth of the economy will grow this money, and therefore these figures are enriching the same rights and the same property, while the figures will be Mrhqh, and commensurate with, or facilitate the creation of a monetary reform facilitator and easy.

And put on the timing of the coin, and whether it will precede the process of removing the zeros between the benefit that “the coin will be within the structure of currency and within the existing project and will be the currency after deletion of zeros from the currency paper.

He explained that “the end of the coin is to cover the transaction currency, considering the small groups of fast trading, especially as the age of the coin longer than cash, as well as that coin will be the proof of the strength of the Iraqi currency.

Saleh called on to “encourage and support this step as it positively affect the Iraqi economy.”

And we are talking some time ago in the Iraqi media regarding the change of currency, and issuing a new currency, and is noted that there are changes will occur in the form of new Iraqi currency, including the removal of zeros, and the inclusion of the Kurdish language to the Arabic language in the currencies.

The central bank decided to introduce coins as part of his plan to restructure the currency, which requires government approval and the Council of Representatives for a strategic plan that it will contribute in supporting the Iraqi dinar’s value in financial trading.



CBI: Start working with 20 private banks electronic clearing system

06/07/2011 13:26

Baghdad, July 6 (Rn) - The Central Bank of Iraq, Wednesday, that 20 private banks began to work according to the electronic clearing system, noting that there are efforts to introduce government banks in this system.

Sums of money The central bank announced last February that six private banks began using the electronic clearing system.

The central bank adviser said the appearance of Mohammed Saleh told the Kurdish news agency (Rn) that "the 20 banks began to work according to the electronic clearing system is an important step for the development of the payments system in the country and the mechanisms of private and state banks."

He added, "My work clearing electronic means no use of hand instruments in the process of transfer of funds and the use of magnetic Scock calculator and read in order to facilitate the transfer of funds in less than an hour rather than taking."

He continued that "the Central Bank will supervise the work of the inter-bank electronic clearing your view to providing the best service in electronic banking in the country."
The World Bank allocated $ 10 million for the restructuring of government banks and activate the electronic dealings.

Announced earlier in the unit re-Hiklhalmassarv that Iraqi unit has been extended to banks for one year because of security concerns.
Iraq had decided in early 2006 and the restructuring of banks in order to get rid of the heavy debt.

The Ministry of Finance of Iraq for its efforts over the next year to develop an integrated plan to develop e-government banks and financial relations in the activation of this aspect.

The Iraqi government is still limited in its financial transactions on the banks approved by the government by 85%.

And called on the Ministry of Finance earlier in the Iraqi Central Bank to take firm action in granting licenses for the establishment of private banks.

Wanan of Jafar, the Open: Peace Baghdadi


 Salih: Banking sector holding back economy
06/07/2011 12:29 Erbil, July 6 (AKnews) – Kurdistan Prime Minister, Barham Salih, said today that the development of the economy is being held back by a poor banking sector.
berhem salih
Speaking exclusively to AKnews at a visit to their offices, he said that it is one of the main factors blocking foreign investment in the region.

“We are trying to encourage international banks to operate in Kurdistan, because at present we do not have a world class sector,” he said.

The government will have to improve the legislative environment and introduce new laws if it is to flourish, he added.

Kurdistan has a projected growth of 9-10 percent for this year, an unprecedented level for the region. However, the prime minister said the government must guard against the boom and bust cycle.

“We have to make sure that it is sustainable growth. There is the inevitable economic cycle to consider. We are developing many sectors including industry, agriculture, tourism, services and of course oil. If we develop these thoroughly then we will hopefully guard against bust,” he said.

Salih said that infrastructure is also an impediment to growth: “Electrical power is a particular problem, but we are looking to make special energy provisions for foreign companies, to encourage investment. We’re also planning to construct new power plants to tackle the problem.”

By Patrick Smith

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Central bank: to issue a new currency in Arabic, Kurdish, and lifting of the zeroes
2011-07-01 08:00:00

Agency news editor (and ATA): Central Bank of Iraq, his willingness to delete the zeros of the currency, pointing out that the new currency will contain the Kurdish language in addition to Arabic.

Advisor to the Governor Central Bank of Iraq the appearance of Mohammed Saleh said in a press statement that the zeros added to the Iraqi currency during the last period, formed a cluster of large cash $ 28 trillion and 500 billion Iraqi dinars, or nearly 5 trillion banknote.

Salih stressed that the project to delete the zeros have been completed and will be presented to the Bank's management during its next meeting, and then will be submitted to the Council of Ministers to be presented to parliament for a vote.

And that the new currency that will be printed after the deletion of zeros will contain writings in both Arabic and Kurdish, as well as photographs indicate the heritage and cultures and symbols of Iraq to Iraqi scientists and intellectuals

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01 Mar 2010

PM: Iraqi dinar re-evaluation has to do with economic conditions

28 February 2010
Iraqi Prime Minister Nouri al-Maliki said on Sunday that the process to re-evaluate the Iraqi dinar has to do with economic conditions that have to be strengthened.

"The Iraqi dinar has all the reasons to grow stronger thanks to an increase in revenues and development of the economy," Maliki said in response to some questions through the National Information Center.

"The government would not rush matters but would rather work on finding all the guarantees to render this measure a success. The Central Bank of Iraq (CBI) is currently entrusted with drawing up a study on the whole issue and would give its decision soon," said the Iraqi premier.

The Central Bank of Iraq is nearing completion of the project raise three...  
by Daisy Swift
More Comments by the Community
The Iraqi dinar's exchange rate is suffering from low value against foreign currencies as a result of decades of wars and economic embargo that brought the local currency's exchange rate to the rock bottom from three dinars per dollar in the late 1970s and 1980s to 3,000 dinars per dollar after the 1990 invasion of Kuwait, followed by a 13-year crippling sanctions regime.

The exchange rate fell even more after 2003 to reach 1170 dinars per dollar due to the CBI's policy of daily auction, in effect for more than five years now.

The policy was lambasted by several economists on the grounds that these auctions do not give the real value of the country's local currency.


© Aswat Aliraq 2010

CBI and Taxes not popular with Banks in Iraq

It looks like the Central Bank of Iraq (CBI) has finally turned a corner here in Baghdad. They have implemented something that they have been wanting to do for the last several years but were unable to due to hyper-inflation.

Today, the Central Bank of Iraq completed their daily auction and closed with approximately 12.9 million dollars. This amount is significantly lower than it has been in the past. We’ve seen it reach peaks of over 100 million daily, just trying to keep the Iraqi economy from collapsing. Currently in Iraq, the typical Iraqi citizen has been using more U.S. dollars than their own country currency and now all that is about to change with the help of the Central Bank of Iraq. The CBI has implemented a new program that is encouraging or quite possibly forcing, the banking system to use Iraqi dinar currency instead of U.S. dollars. This tactic makes purchasing foreign currency very expensive. Don’t get me wrong, It is still being allowed, but it will just cost a little more than it has in past foreign currency transactions. In addition, the CBI has started a tax on all foreign currency transactions. I know this all to be factual because I, personally have access to these formal documents and hold in my hand a copy of the CBI memo that was issued to the Iraqi banking sector. It is evident that the CBI is doing everything in it’s power to make the dinar stronger against the us dollar by instituting this tax. This may explain why you see the foreign currency at 12.9 million dollars daily and will for quite sometime. This action by the CBI has taken a lot of Iraqi businessmen here by surprise as well as the banking industry.

In my last post on 2 May, I mentioned that the Re-denomination Revaluation report has been completed and is ready to be delivered to Prime Minister, Nuri Maliki at his request. This information is true. As crazy as this may sound to some, the CBI has to actually wait for PM Maliki to request this report and make the time to review it. The only question is “when”, as this man has a tendency to procrastinate and drag his feet. I am not going to speculate as to when this will all be, but this week I will be getting a head’s -up from my business contacts in the banking sector and some confirmation from other Iraqi business contacts.

Since I’ve been inundated with emails asking me this one question I’d like to address it in my newsletter today. There are many out there who claim to have contacts within or associated with the CBI that give them information about what is going on here in Iraq. Just for the record, here in Iraq, there are no Iraqi’s that will give you anything until he/she has either met you personally and/or conducted some type of interaction in business. So, when you hear people say or write that they have a CBI contact treat this with a grain of salt, especially when they are not here in Baghdad.

Very few people currently hold the knowledge of the rate projections of the iraqi dinar that is currency being reported from the CBI. This is closed file, guarded information. Not to mention, the reports were just recently published from the CBI. I have the names of these reports and they are; Central Bank of Iraq Annual Report 2009 and Monetary Policy Central Bank of Iraq Annual Report 2009. Both reports are chalk full of information and do give projections of the Iraqi dinar currency rate straight from the CBI. These reports are solely for Banking and Ministry officials. I was able to obtain them due to my close contacts with banking officials. Please don’t let the mention of the year 2009 fool you because this is the last year the CBI reported anything, they are currently just completing the reports for 2010. Eventually, the CBI will get to 2011 and 2012. I have scanned the cover of both reports today and have included them in this newsletter.

For several years now, people have given inaccurate dates and rates in regards to the Iraqi dinar and ALL have been 100% wrong each and every time. I, can honestly say, that I have knowledge in regards to the projected dinar currency rate as stated in the 2009 Monetary Policy report. This information comes straight from the source. I have no idea if it will all come true to fruition, but that is why they are called projections. It’s nice to know what the future CBI plan is for the Iraqi dinar currency. That’s all that I can disclose at this current time. The dinar currency transition period is expected to be for only 12 months. I will reveal more of what is being reported in the monetary policy reports in upcoming American Contractor newsletters to my email subscribers.


By Jacques Clement | AFP News – Mon, May 16, 2011
  • Mobile phones on display. Just a fifth of Iraqis have bank accounts, but 70 percent have mobile phones, so Baghdad is hoping to close the gap by getting people to open accounts, make payments and transfer cash -- all via mobileEnlarge Photo

    Mobile phones on display. Just a fifth of Iraqis have bank accounts, but 70 percent …

  • Sinan al-Shabibi, Governor of the Central Bank of Iraq, shown in 2004, is a proponent of the mobile banking initiative, aimed at securing Iraqis' funds and strengthening the banking sector as higher revenues resulting from a greater number of transactions boost profitsEnlarge Photo

    Sinan al-Shabibi, Governor of the Central Bank of Iraq, shown in 2004, is a proponent …

Just a fifth of Iraqis have bank accounts, but 70 percent have mobile phones, so Baghdad is hoping to close the gap by getting people to open accounts, make payments and transfer cash -- all via mobile.

In a country that is one of the most corrupt and violent in the world, the initiative is aimed at securing Iraqis' funds, and strengthening the banking sector as higher revenues resulting from a greater number of transactions boost profits.

"It's a very important project" in terms of "increasing the capacities of private banking," Sinan al-Shabibi, the governor of the Central Bank of Iraq, told reporters at a conference on the initiative organised by the bank and USAID.

Shabibi said he hoped the project would be ready "in the coming year".

Only about 20 percent of Iraqis hold a bank account, according to experts. That figure is markedly lower than the average for developing countries, which a World Bank report released last year pegged at 28 percent among adults.

By contrast, 81 percent of adults in developed countries held bank accounts, the "Doing Business 2011" report said.

While much of Iraq's low bank account penetration has to do with a lack of confidence among Iraqis in banks, other factors are also at play.

"It can... be attributed to long period the country was at war, international sanctions, isolation from the outside world, prevailing security situations, coverage of banks in remote areas," said Indrajit Roy Choudhury, a banking expert working as a consultant for the state-owned Trade Bank of Iraq.

Choudhury added that a lack of modern banking facilities and poor financial literacy among Iraqis' was also to blame.

In addition, most Iraqis are paid in cash, with many avoiding the tedious procedures of dealing with the country's bank branches, where queues are long and customers often spend a great deal of time simply in order to deposit funds that they often end up spending within a month.

Others who receive their salaries in cheques typically withdraw the full amount in cash and eschew making deposits or opening an account.

"This situation is changing," Choudhury noted, pointing out that several banks were opening branches in more of Iraq's provinces, networking those branches, and coming out with more "customer-oriented products".

Iraq is hoping to use the relative popularity of mobile telephones here, with market penetration estimated at 70 percent, to accelerate the development of the banking sector.

A 2009 report by India's National Bank for Agriculture and Rural Development notes that "lack of access to finance for... weaker sections of the society has been recognised as a serious threat to economic progress, especially in developing countries."

It added: "Moreover, prolonged and persistent deprivation of banking services to a large segment of the population leads to a decline in investment and has the potential to fuel social tensions causing social exclusion."

According to Carl Rosenquist, an expert who is working on the Iraqi project, it is likely that younger Iraqis will be the system's guinea pigs.

"Experience shows that the take-up of mobile financial services attracts initially the young and subsequently the take-up will increase up the age ladder," said Rosenquist, who has worked on similar initiatives in the Philippines, Mongolia, Jamaica and Kenya.

If the project is fully realised, all it would take for an individual to open a bank account would be a phone call.

Iraqis would be able to make transfers, pay bills, or withdraw funds from non-banking agents such as general stores, who would receive a commission in return.

It is all part of a larger project, estimated to cost between $15-20 million, to unify Iraq's banking system.

"The biggest obstacle is regulation... The law is far behind," said Rosenquist, who complained that Iraqi banks are not required to be linked to a central payment system.

"We have a system and they are not all members.... If they (regulators) don't mandate the use of it, then it's useless."

Discussions are also ongoing between certain banks and mobile phone operators to develop mobile banking, with the chief executive of Kuwaiti firm Zain's Iraqi arm acknowledging that his own company was in talks with two Iraqi banks.

"We're working with a couple banks here in Iraq," Emad Makiya said in an interview with AFP, adding that he could not name which banks as a result of a non-disclosure agreement.

"We're just studying this right now.... We should strike something by the end of this year. We will help them out with their mobile banking."

Bad news for the central bank

Posted on 31 January 2011. Tags: , ,

Bad news for the central bank

Last week the federal supreme court ruled in favor of the government’s request to have the Central Bank of Iraq (CBI), along with the Independent High Electoral Commission, the Integrity Commission, and the High Commission for Human Rights, put under the supervision of the cabinet. This is bad news for the central bank.

Up to now, the CBI has been under the supervision of the parliament, as stipulated by the constitution. There is a good reason for this. Under the parliament, the central bank is not answerable to any single politician. Under the cabinet, it could potentially be directly controlled by one man.

A dangerous opportunity has been created for the government to increase the money supply arbitrarily. Saddam Hussein tried this during the 1990s. The result was hyperinflation.

Iraq’s US$ 50 billion in forex reserves are also at risk. There will be a big temptation to use these for local patronage projects with foreign currency-denominated expenses. If this happens, the CBI could be saddled with significant losses. It could even end up having to be recapitalized.

The court’s ruling is great news for anyone who might some day be in a position to “wet his beak” at the CBI’s expense. Bad news for everyone else.