Iraqi private banks association held consultative meeting with Arab and foreign banks operating in Iraq.
The meeting which was attended by President of the Association Mr. Wadih Handal, economic adviser and professor Samir Alnasiri discuss outstanding problems with foreign correspondent banks.
The meeting was attended by the following banks TBI, Lebanese Fransi Bank, Bank of Lebanon and the Diaspora and Franca Link and Bank of Pylos and Credit Libanais Bank, the Mediterranean and the Bank of Beirut and Arab Countries and the InterContinental Bank and Abu Dhabi Islamic, in addition to a representative of the Bank of Commerce and the German Ashe Turkish bank, in the presence of Iraqi Union of Warka and Assyria banks.
It was agreed to approach higher authorities in charge of the two countries to overcome obstacles and restore relations to normal.
Oil exploration company announced on Wednesday the first successful test of the exploratory wells (Laredo 1) in southern Iraq. The general director of the OEC Engineer Karim Hattab said in a statement, “The tests carried out by a consortium of ” Russian Lukoil and Inpex of Japan “has resulted in huge stockpile discovery of oil in the reservoir,” Musharraf “the flow rate of oil more than (1000) cubic meters per day, which confirms previous geological studies.” He added, “The development for this year’s plan includes drilling and testing of exploratory well (Laredo 2).” General manager of oil company explorations, said that “this represents a new addition to Iraq’s oil reserves,” he said. “This area was one of the fields that have contributed to the added amount of 10 billion barrels to oil reserves.” The consortium “Russian Lukoil and Inpex of Japan” had won the development of exploratory “X” patch in Basra province.
Ministry of Transport said it had agreed on Tuesday with a Chinese company to study the creation of “sky train” between the provinces of Karbala and Najaf in southern Iraq.
The ministry said in a statement responded to the Twilight News, that “the Transport Minister Kazem Fengen, discussed with a delegation from the Chinese Norenko company specialized in the creation of the railway train lines and take advantage of its expertise and capabilities in the development and situation of the railways in the country.”
He said that “the ministry is looking for further cooperation with various specialized companies for the advancement of the railways in the country.”
He pointed out that “it was agreed with the company to begin to study the establishment of sky train between the cities of Karbala and Najaf, where they will visit the site to see the proposed path of the line for the purpose of a preliminary study with a feasibility study for the project.”
The company delegation also explained his willingness to implement the project Order term and will be the signing of a memorandum of understanding after visiting the site for the purpose of identifying action steps and specifications required for the project, according to the statement.
Rafidain Bank announced its readiness to open a current account and provide citizens who wish to deposit their money in the bank.
Press office of the bank said in a statement received by all of Iraq [where] a copy of it, that “the Bank has set conditions to open a current account and provide citizens personal account in dinar and the dollar.”
The bank called “citizens to review website access information regarding the account opening instructions or review its branches in Baghdad and the provinces for the purpose.”
Central Bank Governor Ali Ismail Allaq on Monday announced that March will be the date for the launch of contractors bonds, the bank has no intention to open new outlets to sell the dollar, it was revealed that the banks, Rafidain, Rasheed and Trade banks will create foreign exchange company.
Allaq said in a statement that “the central bank, suggest that there would be bonds for contractors who have money owed by the state, but because of financial distress, the government apologize for the payment of these funds, can be paid in the form of bonds and the interest rate is good.”
He added that “those entitlements of Contractors bonds for projects already executed for ministries and government departments, is now the Diwan of financial control for scrutiny, we expect that there is a definitive answer by the International Monetary Fund, the Board of Control for launch during the month of March.”
He pointed that “Rafidain, Rasheed and Iraqi Trade banks, is working to establish a foreign exchange company to enter into competition with other companies, it would work similar to the work of the exchange companies to the private sector, but it is significantly supported by us.”
And that “the bank is trying to make structured in the process of selling the dollar for the beneficiaries and open multiple outlets for the sale of which is sufficient for the time being, but do not think that there is the intention at the present time to open more outlets.”
Some Iraqi economists calls for the government to lift the Iraqi dinar exchange rate against the dollar until the rising purchasing power and increasing confidence it represents the sovereignty of Iraq, calling for the need to stop «dollarization» economy by preventing dealing internally by making local transactions limited to the use of the Iraqi dinar only.
It must be pointed out that 70 percent of the currency in circulation was covered in gold and foreign currencies until 1981, the remaining Iraqi government (currency) Act bonds, Iraq then applied to the remnants of the gold standard system.
In order to maintain the cover, successive governments have continued to link fiscal policy, especially current spending and investment, the status of the balance of payments, the latter was determined by the government’s revenue from oil exports. But the success of this linkage administrative restrictions applied to the outside, both the conversion, trade in goods, services and movement of capital. Thus followed the monetary and fiscal policies maintained the stability of the Iraqi dinar is installed by the Central Bank of $3.2-1 dinar.
It gave a commitment to cover the dinar easing monetary authority in the exercise of its duties, where only concerned with maintaining the stability of the currency, but that check on economic development that have not spent the expense of the adequacy of fear that increased spending affect the stability of the currency. But during the Iraq-Iran war that caused huge foreign currency precautions, the Iraqi government abandoned the currency law and began to spend on the war without quantitative restrictions, causing a continuous decline in the dinar exchange rate against the dollar and other major foreign currencies, because of the increasing gap between the Iraqi currency supply and demand. Increased the economic embargo imposed on Iraq in 1991 made it worse. Despite holding the government at official exchange rate (US $3.2) for official transactions, resulting from the continuation of the growing imbalance between the currency volume in circulation and demand for another rate of the dinar in the parallel market rate or the black market, we arrived at certain times to 4000 dinars to the dollar.
After the occupation of Iraq in 2003, lifting the ban on oil exports and reserves of foreign currency deposits abroad, central bank resorts to regulate the daily auctions to sell the dollar, which means the withdrawal of part of the local currency, the value of the Iraqi dinar to rise began gradually until it reached 1200 dinars to the dollar, range remained around this average. After the Iraq – Iran war deprived conditions and the economic blockade the Iraqi dinar many regarded as a store of value and medium of circulation, what caused the shift most transactions at home and especially internal trade in goods and services, to the dollar and thus «dollarization» of the Iraqi economy.
From this background the Iraqi dinar exchange rate over the last 36 years the price of change, how «dollarization» economy, it is time to discuss the claims of some economists now demanding higher dinar exchange rate and stop «dollarization».
Since more than four years officials in Iraq are talking about monetary reform in which to raise the Iraqi currency exchange rate against the dollar so that the new dinar equals 1.2 dinars to the dollar instead of 1200. But the move was postponed to a later date due to the exit of some Iraqi areas under government control after the occupation of «Daesh». Then the military operations began to recover these areas which still exist.
The government is expected to return to the project itself after the end of military operations. If the monetary reform is successful, there will no longer need to use the US dollar in local transactions. The latter after the completion of daily transactions difficult with the arrival of the dollar value became one thousand dinars, making individuals resort to dealing in dollars instead of the dinar, especially in large transactions in the hoarding of currency. So «dollarization» of Iraqi economy administrative decision or administrative orders of the monetary authority, but will be gone phenomenon gradual demise of the reasons that led to it, that is, after the above monetary reform referred to, because the dinar will then mode for easy handling and a store of value obliterates the use of the dollar.
But monetary reform as mentioned above does not mean setting a new official exchange rate of the dinar against the dollar. If under the floating exchange rate as it is currently, the rise or fall according to the relationship between the width of the dinar and demand, the higher the stability of the dinar against the display or low demand, price declines cashed in against the dollar. And it gets the contrary, if the width of the dinar fell against the stability or rising demand. The monetary authority may resort to the installation of the new exchange to the dollar or to a basket of currencies.
But in any case, is not advisable to adopt a high exchange rate, it does not give effect to the economy or raise the value of national sovereignty, as some believe, but have negative effects in the economy. The price of the former Iraqi dinar (US $3.2) was exaggerated and will continue to be overrated if to return to it in the future. It will make imports cheaper, but it hinders improvement of production and export capacity of Iraq, may be the price of 1.2 dinars to the dollar or dinar against the dollar is a good price. But on the government to follow the fiscal and monetary policies that help to maintain it. So we can say that the calls that we hear today the lifting of the dinar exchange rate and the abolition of «dollarization» first claims the economy is not right or can not be achieved by the monetary reform for the second.
The Iraqi parliament’s Security and Defense Committee asserted on Monday that Baghdad had received the first batch of the South Korean T-50 jets.
In statements, member of the committee Majid el Gharawi said the aircraft arrived to Umm Qasr Port last week and that they are planned t be moved to Iraqi air bases in Al-Suwaira District of Wasit Governorate.
Iraqi Defense Ministry is waiting for the remaining of the 24 T-50 aircraft planned to reach Iraq in the upcoming few days.
T-50 aircraft is equipped with the 16 tactical data link as well as a mechanically scanned array radar, radar warning receiver and a night vision imaging system. It is capable of carrying 4,500kg of weapons, has a 20mm cannon and can carry air-to-air missiles. All T-50 variants are powered by the General Electric F404 engine.
Iraq Stock Exchange recorded a rise in the number of shares traded in the market at rates exceeding 308% over the past week compared per week before.
The executive director of the market Taha Ahmed Abdul Salam received all of Iraq [where] a copy of it, said that “the Iraq Stock Exchange systems during the week ending on the sixteenth of February in five sessions of trading in the formal market and five sessions in the second market.”
He added that “the number of listed companies in the market amounted to  joint-stock company, including  companies listed in the formal market and the 27 companies listed in the second market traded during last week, shares of 53 companies in the formal market, and 4 companies in the second market.”
Abdel Salam reveal “The number of companies suspended from trading for failing to submit annual and quarterly disclosure of the body and the market was during the last week,  while the number of company shares listed on the market amounted to [9.584] trillion shares.”
He stressed that the “number of shares traded last week 144 billion shares, compared with 35 billion shares for the week before while the value of shares traded last week 72 billion dinars, compared to 31 billion dinars for the week before and the number of transactions executed last week was  compared to  for the week before and the market index ISX 60 closed last session of the week [712.19] points.”
Abdul Salam said that “It is the trading data analysis of last week’s note that the number of shares traded last week increased by [308.97%] compared per week, which was accepted and also the total value of shares traded rose last week by [130.17%] compared per week, which was accepted and also record the market rise in ISX 60 market index by [0.05%] for last week close, the week before closed at [711.80] points.”
Central Bank of Iraq announced on Sunday, its reserves of hard currency dropped to $49 billion as a result of the continuing decline in oil prices in global markets.
The governor of the bank, Ali Allaq during a press conference held by the bank building, said that “the central bank reserves of hard currency now stands at $49 billion,” pointing out that “the reserve depends on the fiscal revenue from oil sales.” He added that “the central bank has about two thousand foreign exchange companies, 30 transfer companies and 65 banks all selling foreign currency under the currency auction, which is sufficient to cover the daily sales of the Central Bank.”
He continued that “the central bank will launch Contractors bonds in March, after the last period of the bonds, but the irresponsible remarks of a number of IMF officials asked us to conduct a review of those bonds.”
Central bank revealed last June 2016 that the foreign currency reserves reached $53 billion, down $15 billion from the financial reserve for 2015, which stood at the time $68 billion. Iraq is facing an economic crisis forced reduction in the size of the financial budget as a result of falling oil prices to below $40 per barrel, start an austerity policy within the federal budget.
Central Bank of Iraq Sunday, announced it’s ability to cover the obligations of Iraq, international as well as foreign trade financing, as emphasized that the country’s reserves of foreign currency within the “international standards.”
The governor of the central bank Ali Allaq in a press conference attended by Alsumaria News, “The bank is able to cover Iraq’s international obligations and financing of foreign trade, ” stressing that “Iraq’s currency reserve within the standards, that the bank also covers the local currency by a large margin.”
He added that “Iraq’s debt ratio is acceptable compared to GDP, but should not exceed it.”