Iraq Information II

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Economist calls for the Ministry of Finance to take immediate action to prevent the collapse of the banking sector

Posted: July 25, 2011 by THE CURRENCY NEWSHOUND 


BAGHDAD (Iba) .. Expert called for the adoption of bank rescue measures immediately to prevent the collapse of private banks in Iraq, which may bring them back to square one and dissipate economic reform efforts exerted for years.

The expert, who asked not be named, told the independent press (Iba) that the existence of a banking system integrated is one of the most important pillars of the national economy and confidence in him and encouraged to deal with it, which is the gateway to the development of all economic sectors, and is the basis for handling cash between individuals, companies and institutions at home and as well as its dealings with the outside.

He also said the presence of a strong banking system in the country, encourage local and foreign investors to enter the investment market and give confidence to the national economy and guarantee in dealing with the State, whether with the public sector or private.

He noted that the support of the banking sector Ahli encouraged to handle competitive, which is looking for business and private sector in general, and any blow to the banking sector, Ahli lose confidence in the banking system as a whole and lead to a decline in dealing with the various agencies and the reluctance of investors to enter the investment market and even contracts tainted by type of uncertainty and loss of confidence.

The expert explained that the Economic Committee of the Council of Ministers and Central Bank of Iraq had a distinct position in their support to domestic banks through a decision of the Economic Commission of the Council of Ministers No. 188 on 6/4/2009, which allowed the ministries to deal with private banks without restriction or condition and also urged the finance companies Self-filing, opening bank accounts in private banks.

Add to book the Iraqi Central Bank to the ministries and departments not associated with the Ministry of 09/12/2010 No. 9/3/711, which indicates that the central bank had the values ​​of private banks, urges the concerned authorities to deal with it, and Egged legal or financial reasons not to do to deal with them to get the various banking services to serve public interests.

The expert was surprised at the Ministry of Finance to issue instructions in 2009 to all ministries and departments not associated with a ministry that ran counter to the above decisions of the Economic Commission of the Council of Ministers and the central bank, prevented whereby all ministries, agencies and authorities from opening a bank account with the private banks out of hand and turn them into state banks (Iraq) under the pretext of maintaining public treasury funds of dispersion.

He said in light of the decision of the Ministry of Finance, it started the problem of liquidity crisis in banks, as happened to the Warka Bank were to withdraw all government deposits, and suddenly and immediately resulted in the withdrawal of 800 billion Iraqi dinars within three months.

He said the reason for the panic among the public, which led to the withdrawal of deposits by depositors companies, individuals and the reluctance of others to deal with the bank even declined to deal with him to the 5% and amounted to what has been withdrawn during the period amounted to 1600 billion dinars, the equivalent of one billion and five hundred million dollars.

The expert said that the Prime Minister instructed after the complaint made by the Warka Bank to conduct the necessary protection of private banks, and the Legal Committee in the House had written to the Ministry of Finance said the decision was contrary to Article 25.26 of the Iraqi Constitution, and that any prevention of such things must be issued by a law.

He was supposed then to cancel the Ministry of Finance its decision to prevent dealing with private banks, and supported again and requests from ministries and agencies concerned to support the banking system by dealing with private banks to encourage the establishment of new banks again, but this did not happen. The expert called on to a meeting between officials of the Ministry of Finance and the Central Bank and representatives of the advisory board of the Office of the Prime Minister with representatives of private banks in order to support the banks, and find ways to solve all its problems, to support the banking sector in Iraq, according to specific controls and clear.

For his part, student director of the Warka Bank Government and the Ministry of Finance and the Central Bank to find solutions to derail the bank from its crisis under the guidance of the Prime Minister with the support of private banks, and pursuant to the Legal Committee of the Council of Representatives to reject the decisions of the Ministry of Finance as contrary to the provisions of the Constitution and rejected the decisions of the Central Bank as contrary to the provisions of the Central Bank Law No. 56 of 2004. He’s (IBA) could have collapsed bank collapse immediately, but the strength of its assets prevented, and in fact should commend this power possessed by the Bank Ahli Iraqis in such circumstances, where he remained steadfast request the support and assistance from government authorities and the central bank to rescue it from the problem that left the force.

He was the hope that The Ministry of Finance and the Central Bank of serious support to the bank as a national bank, but that did not happen. The economic analyst Sadeq stapes has said that the Iraqi government still believes that the incentive package offered to foreign investors at the beginning of contracts, enough to make it able to overcome obstacles to his work with Iraqi banks, and the latter do not have sufficient funds to cover bank guarantees later. The stapes to the Iraqi banking system imposed on foreign companies commitment to bank guarantees issued by banks, Iraqi banks exclusively, which is inconsistent with the capacity of Iraqi banks to secure these guarantees.


Iraq currency shops multiply as citizens trade IQD for USD; Officials say shops are flagrantly exploiting public ignorance

Posted: July 20, 2011 by THE CURRENCY NEWSHOUND 

Traders are involved in damage to the opportunity of the Iraqi economy .. Officials are turning their homes into shops for the banking pending delete zeros dinar

With the approach of the countdown to reduce the zeros of the Iraqi currency by three zeros to the bottom step of the Central Bank of Iraq to rearrange the rules of the Iraqi economy, began to supported groups inside the Green Zone, assigned to currency traders collect and store a currency U.S. dollar in preparation for phase determine how zeros of the Iraqi currency and Tbdlleha to become a thousand dinars , JD and access to the numbers Alumblyaria that invaded the culture of the Iraqi economy.

Source from inside the Green Zone, says that some of the condos with leaders and officials and officers turned to the banks not matching the specifications of the storage of financial because they were filled with U.S. currency the dollar, a gain is added to the dealers that it exceeds the profit rate of 100%, where it will be the amount sold by the Iraqi currency and buyer of U.S. currency The dollar is the same amount that it will buy the Iraqi dinar once again after the whistle of the Iraqi currency.

This process has affected and three days ago at the level of trading of the currencies in central Iraq, but are invisible to this moment, but will cause major problems on the economic level for the next period.

Traders the opportunity who make a living on such stages are active in damaging the Iraqi economy and raise the crisis between the people who started many of them converts from its own funds to the U.S. currency, an approach that is almost universal in the Iraqi markets are looking for safety in the maintenance of its financial resources by turning them into dollar and then deal with the new Iraqi currency, Valqnaah that prevail in the market now, that the process of replacement of zeros of the Iraqi currency, which goes to the government seeking its implementation during the period between the end of this month, and year.

It is expected to break out conflicts and problems in society and in the Iraqi economy if the project was carried out without the education and promotion by the government in the media and open channels of its own government to alter the currency and not to rely on the black market and banking companies, which accuses currently being fed the subject of rumors about what will happen with if the project was implemented as a means to increase the chances of speculation by raising the purchase price of the dollar against the Iraqi dinar in the flagrant exploitation of public ignorance of the fact that a step the central bank.

Economic circles demanded an integrated program for public awareness and transparent display of the program delete the zeros because these decisions are not just purely financial decisions, but is located in the heart of the daily life of citizens.

Below is the link to a conference call that I believe is a must listen to, in order to help dissect and understand what the speech that Shabibi gave, really pertains to. About 50 or 60 minutes into the conference call a gentleman named Delta comes on who is of Middle Eastern ethnicity from what I am told and he really helps connect the dots.
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Here are some excerpts cut and pasted from Dinar Vets website from the conference call... dated 4-21-2011 at
John says: face to face afterward he spoke alone for a few min and he asked Shabibi what do you believe is the factor if the revaluation and will it occur sooner or later… would it be the forming of the GOI or something else ??– Shabibi said NO we do not need a GOI – and 5 factors and the chief among them is inflation factor – Shabibi also said their RE development and their commerce …..which again is tied into inflation

Five Factors Shabibi spoke of:

1. Sanctions
2. Depreciate currency – potential problem with inflation
3. Unemployment
4. A weak infrastructure – linked with development
5. Security which is out of his hands

Frank states by revaluing their currency
would cause:

1. Sanctions to be complete – no more banana peels and Chapter 7

2. The currency would be of higher value – worth more
3. Jobs added – people working – unemployment will be wiped out
4. People will now be investing in building and all are working with a strong currency
5. Security problems are gone as they won’t need to fight with each other

Inflation is a big driver and John sensed a lot more going on here….


Shabibi's DC Chamber of Commerce Speech about Iraq's Economy
Shabibi mentions the word (inflation) 21 times before question number three takes place and he mentions the words (exchange rate) 17 times before the 3rd question.
Attached at the bottom is each transcript for each part of the recordings.
I make no warranties to be word for word transcription, this is like trying to translate Elmer Fudd! LOL! His English is not good in some places and he uses the wrong words to describe things so I have to play it over and over again to get what he is saying.
Keep in mind I don't think Shabibi came with a prepared monologue so that explains why he repeats himself so many times.
The (2) million dollar questions everyone wants answered are at the end of part 2 and the beginning of part 3. 
Being "when do you think a revaluation of the Iraqi currency will take place?" and "Is Iraq going to remove the three zeros from their currency?" 
Below is the articles that reported on his April 19th speech.

Apr 19 11

Modernizing Iraq’s Banking System

by Lionel Johnson

Today the U.S. Chamber’s Iraq Business Initiative hosted Dr. Sinan Al-Shabibi, Iraq’s central bank governor for a briefing at which he discussed Iraq’s fiscal and economic stability and progress that has been made to strengthen the country’s financial sector since 2003.

While stability in Iraq and the broader Middle East region is generally discussed in the context of politics and security, Dr. Shabibi instead underscored the important work of  Iraq’s central bank to shore up stability through financial reform and modernization.

Dr. Shabibi emphasized that while it is not the role of the central bank to finance individual projects, it is committed to ensuring an environment conducive to foreign direct investment through a stable currency and competitive, market based exchange rates.  He stressed the imperative of foreign investment from the private sector driving Iraq’s critical reconstruction and development.

The U.S. Chamber’s Iraq Business Initiative looks forward to working with Dr. Shabibi in the weeks, months, and years to come.  We thank him for taking time out of his busy schedule to meet with us here today.


Iraq's Inflation hits 5.8%

By Jaffar al-Wanan
Baghdad, May 19 (AKnews) - Iraq's core interest rate was up to 5.8 per cent in April from 5.3 per cent in January, according to the Iraqi Planning and Development Ministry.

Iraq's interest rate has increased in recent months from a low of 3.3 per cent in December. Previous to that it fell from a high of 65 per cent in 2007.

The ministry said compared with March: 

-Food was up one per cent.
-Clothes were up 1.9 per cent.
-Housing was up 0.9 per cent.
-Fuel was up 0.8 per cent.
-Household furnishing was up 0.2 per cent.
-Medical care was up 1.3 per cent.

The Iraqi Central Bank said in April that it expects the interest rate to stay below 10 per cent this year. 
© AK News 2011

This is an older article and I will try to find the link.

Date: Tuesday, February 8, 2011, 8:19 AM

بغداد(الاخبارية)..دعا محافظ البنك المركزي سنان الشبيبي الى استقلالية البنك لانه مظلة حامية لاموال الدولة.وقال الشبيبي خلال عقدت ندوة اقامتها مؤسسة (المدى) لمناقشة قضية استقلال البنك المركزي وحضرته مراسلة (الوكالة الاخبارية للانباء): ان"منح الاستقلالية للبنك المركزي له اهمية كبيرة لانه مظلة حامية لاموال الدولة"، Baghdad (news) .. called Central Bank Governor Sinan al-Shabibi to the independence of the Bank that the umbrella of a protector of state funds. Shabibi said during a symposium hosted by the Foundation (range) to discuss the issue of independence of the Central Bank and attended by a reporter Agency (news): "The granting of independence to the Central Bank is of great significance because it is the umbrella of a protector of state funds, "
مستدركا:"لكن على الحكومة ان لاتفهم ان البنك منعزلا عنها بل اننا نعمل مع السوق والحكومة بشكل كبير." Afterthought: "But the government might not understand that the bank isolated it, but we are working with the market and the government significantly."
واضاف الشبيبي : لايمكن الفصل بين الحكومة والبنك المركزي لان اهمية السياسة النقدية تعتمد وفق القانون على التعاون مع الحكومة.واشار الى ان اساس اقتصاد البنك هو محاربة التضخم الذي يحصل بسبب الحكومة او القطاع الخاص، ويعمل على تطبيق السياسة النقدية سواء في اسعار الفائدة لتحقيق استقرار النمو ومساندة المصارف في الازمات من خلال التنسيق المباشر. He Shabibi: can not separation between the government and the central bank because the importance of monetary policy depends according to the law on cooperation with the government. He pointed out that the basis of the economy the Bank is to fight inflation, which happen because the government or the private sector, and works on the application of monetary policy both in the interest rates to stabilize the growth and support for banks in crisis through direct coordination.
وبين الشبيبي:ان البنك المركزي يقوم بمتابعة تخصيصات الموازنة الحكومية من اجل ضبط الصرف وتقليل معالجة عدم التوازن ../انتهى/(3.ر.م) And Shabibi: that the central bank will follow the government's budget allocations in order to adjust the exchange rate and reduce address the imbalance .. / Finished / (3. T. M)

Mark Aldrich,
Jul 26, 2016, 1:13 AM
Mark Aldrich,
Jul 26, 2016, 1:13 AM
Mark Aldrich,
Jul 26, 2016, 1:13 AM
Mark Aldrich,
Jul 26, 2016, 1:13 AM
Mark Aldrich,
Jul 26, 2016, 1:13 AM
Mark Aldrich,
Jul 26, 2016, 1:13 AM