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The change from USD to IQD in Iraq

From Army Times author Kris Osborne (no link provided):

U.S. slows cash flow into Iraq, Afghanistan
By Kris Osborn

The U.S. government is slowing the flow of dollars into Iraq and Afghanistan as part of a push to build up the local currencies, banking systems and economies.
In the effort by the State and Treasury departments and the Army, all U.S. payments to local vendors in Iraq and Afghanistan will be made by electronic transfer starting Oct. 1, said Brig. Gen. Phillip McGhee, director of resource management, Third Army.
In recent years, billions of U.S. dollars has flowed into the countries.
“There was no banking structure, there were no financial institutions. They either didn’t exist to begin with or they collapsed after the start of Operation Iraqi Freedom,” McGhee said. “We went for years reverting back to what we know and can do very well, and that is put a lot of cash out there.” But that approach invited corruption and theft, tied up U.S. troops as security guards and gave insurgents a key financial tool.
“Insurgents and al-Qaida prefer to use U.S. currency,” McGhee said. “They can use that anywhere in the world, so the sooner you get that out of there, they will have to find another currency.” But the primary reason for the switch, the general said, was to give Iraqis and Afghans more control of their recovering economies. Using local currency boosts confidence in local governments, one analyst said.
“For the long term, this is good for the country to the extent that people see the Afghan and Iraqi governments as providing stable institutions. It does build some confidence,” said Keith Crane, who directs environment, energy and economic development programs at Rand Corp., a California based think tank.
The flow of U.S. cash is already drying up. U.S. payments will move through a web-based Defense Department service called “Wide Area Work Flow.” That allows the government to “write contracts to the vendors in U.S. currency that are paid in local currency,” McGhee said. “If you are a contractor and your contract was written through [electronic funds transfers] — you can see where your payment is in the system.” The funds will be sent to local banks that have been certified ready to handle e-transfers, where they will be available for the vendors to withdraw in local currency. Reducing cash payments saves the Army money. Each transaction costs about $32 a payment, according to an Army news release.

(Hat tip to one of the readers of DS, please claim your credit in the comments if you wish it.)

Posted in General Iraq Discussion, Iraq Finance, Iraqi Banking related | 12 Comments »

Good articles on Central Bank expecting to raise the value of the Iraqi Dinar

Hat tip to Seaview over at IIF.

Someone please tell me how the article was translated by google to include a famous Disney character, though! Article:

Sign adviser CBI Mzarmohamd for Iraq to become of the oil-producing countries developed during the next two years if entering Iraq through the gate of the oil investment.

وأكد صالح أن الاستثمار سينعكس على تطور الواقع الاقتصادي في البلاد نتيجة تنوع موارده، وهو ما سيؤدي إلى ارتفاع قيمة الدينار العراقي: The benefit of that investment will be reflected on the evolution of the economic reality in the country by the diversity of its resources, which would lead to a rise in the value of the Iraqi Dinar:

وأشار صالح في حديث لـ”راديو سوا” إلى أن العراق يحتفظ بمعدلات عالية من العملة الأجنبية تغطي السيولة المحلية ما يدفع إلى استقرار الدينار العراقي في تداولات سوق العملات وبالتالي يحفظ الاستقرار الاقتصادي: Salih noted in an interview with “Radio Sawa” that Iraq retains high rates of foreign currency cover domestic liquidity is paid to the stability of the Iraqi dinar in trading the currency market and thus preserve economic stability:

فيما أوضح الخبير الاقتصادي أسعد العاقولي أن سعي عدد من الدول الأوربية للاستثمار في العراق سيرفع من موارد البلاد وسيدعم قيمة الدينار في المستقبل، ما يؤهل العراق للدخول في الاستثمارات الخاصة في مجال الغاز: The economic expert explained that the happiest bugsbunny attempt by a number of European countries to invest in Iraq will raise the country’s resources and will support the value of the dinar in the future, as Iraq prepares to enter into private investments in gas:

وكان صندوق النقد الدولي قرر منح العراق 1.8 مليار دولار لدعم السيولة النقدية واحتياطيات البنك المركزي العراقي، فضلا عن إنعاش المشاريع التنموية. The International Monetary Fund decided to give Iraq $ 1.8 billion to boost liquidity and cash reserves of the Central Bank of Iraq, as well as for the recovery of development projects.

It sure would be handy to know how to read arabic… If someone could comment on this article with firsthand knowledge of the translation, it would be appreciated!

Posted in General Iraq Discussion, Iraq Finance, Iraq news, Iraqi Banking related, Uncategorized | 5 Comments »