CBI sells 175 million dollars in its Thursday auction

BAGHDAD / Aswat al-Iraq: The Central Bank of Iraq (CBI) has announced the selling of US$175 millions, in its auction on Thursday, on the rate of 1,170 dinars per dollar, exceeding its Wednesday sale by 73 million dollars, according to its daily bulletin, copy of which was received by Aswat al-Iraq news agency.

“The total demand on U.S.
dollars has reached 175 millions and 382,000, covered by the Central Bank of Iraq, on an exchange rate of 1,170 Iraqi dinars per dollar,” the bullet reported.

The CBN’s sales in its Wednesday auction had reached 73 millions and 730,000 dollars.

The Bank’s cash dollar sales had reached 12 millions and 192,000 dollars, on an exchange rate of 1,183 dinars per dollar, along with the Bank’s interest of 13 dinars per dollar.

The Bank’s foreign transfers had reached 163 millions and 192,000 dollars, on an exchange rate of 1,183 dinars per dollar, including a 13 dinar interest per dollar.

“None of the 8 banks sharing in the CBN’s auction had presented any offer for the selling of dollars,” the bulletin stressed.

Noteworthy is that the CBN holds 5 auction sessions per week, beginning on Sunday and ending on Thursday, for the selling and buying of foreign currencies, charging a 13 dinar interest per dollar, along with a similar interest for foreign transfers.

SKH

http://en.aswataliraq.info/Default.aspx?page=article_page&c=slideshow&id=143484

Iraq Said To Be Planning Currency Overhaul, Redenomination

Iraq's 25,000-dinar banknotes apparently won't get you as far as they used to.

June 24, 2011

BAGHDAD -- A senior Iraqi Central Bank adviser says the government has adopted a two-pronged plan to restructure the national currency in order to facilitate large transactions and make government accounts more efficient, RFE/RL's Radio Free Iraq (RFI) reports.

Mudhhir Muhammad Salih, a member of the bank's advisory panel, told RFI on June 23 that in the short term, larger banknote denominations of the dinar will be issued to simplify major transactions.

He said that because so many Iraqis still deal mainly in cash, it is cumbersome to carry bags full of money to pay for expensive items like cars. The inconvenience leads people making such purchases -- as well as many entrepreneurs -- to use dollars for those kinds of transactions instead of dinars, something the government wants to end.

He added that large denominations equivalent to around $100 will be issued to simplify major purchases, and new coins and lower denominations will be introduced for smaller transactions.

In the longer term, Saleh said a redenomination is needed wherein three zeros will be dropped so that the 25,000 Iraqi-dinar banknote -- currently the largest denomination -- becomes a 25-dinar note.

He said the change is inevitable, considering the economy is expecting high growth in the coming years with a planned increase in oil production to finance reconstruction projects.

Saleh said there are currently some 29 trillion dinars in circulation in Iraq, represented by some 6 trillion banknotes of various denominations, most of them quite small. He said this also causes complications for the central bank and government, as well as commercial accounting departments.

Saleh said the monetary-restructuring plan was drawn up with the help of foreign experts and financial institutions, including the International Monetary Fund (IMF), of which Iraq has been a member since 1945.

The plan will soon be presented to the cabinet, which is expected to subsequently send a bill to parliament.

Saleh noted that until 1980 the Iraqi dinar exchange rate was 1 dinar/$3.3 compared to $1/1,168 dinars now due to hyperinflation that occurred during the latter part of the late ousted leader Saddam Hussein's reign.

http://www.rferl.org/content/iraq_said_planning_currency_overhaul_redenomination/24245867.html

Iraq Said To Be Planning Currency Overhaul, Redenomination

Iraq's 25,000-dinar banknotes apparently won't get you as far as they used to.

June 24, 2011

BAGHDAD -- A senior Iraqi Central Bank adviser says the government has adopted a two-pronged plan to restructure the national currency in order to facilitate large transactions and make government accounts more efficient, RFE/RL's Radio Free Iraq (RFI) reports.

Mudhhir Muhammad Salih, a member of the bank's advisory panel, told RFI on June 23 that in the short term, larger banknote denominations of the dinar will be issued to simplify major transactions.

He said that because so many Iraqis still deal mainly in cash, it is cumbersome to carry bags full of money to pay for expensive items like cars. The inconvenience leads people making such purchases -- as well as many entrepreneurs -- to use dollars for those kinds of transactions instead of dinars, something the government wants to end.

He added that large denominations equivalent to around $100 will be issued to simplify major purchases, and new coins and lower denominations will be introduced for smaller transactions.

In the longer term, Saleh said a redenomination is needed wherein three zeros will be dropped so that the 25,000 Iraqi-dinar banknote -- currently the largest denomination -- becomes a 25-dinar note.

He said the change is inevitable, considering the economy is expecting high growth in the coming years with a planned increase in oil production to finance reconstruction projects.

Saleh said there are currently some 29 trillion dinars in circulation in Iraq, represented by some 6 trillion banknotes of various denominations, most of them quite small. He said this also causes complications for the central bank and government, as well as commercial accounting departments.

Saleh said the monetary-restructuring plan was drawn up with the help of foreign experts and financial institutions, including the International Monetary Fund (IMF), of which Iraq has been a member since 1945.

The plan will soon be presented to the cabinet, which is expected to subsequently send a bill to parliament.

Saleh noted that until 1980 the Iraqi dinar exchange rate was 1 dinar/$3.3 compared to $1/1,168 dinars now due to hyperinflation that occurred during the latter part of the late ousted leader Saddam Hussein's reign.

http://www.rferl.org/content/iraq_said_planning_currency_overhaul_redenomination/24245867.html

Bullseye: Most Iraqi private banks hit $85M capital target

June 15, 2011

22 out of 32 private banks reach $85

million capital target needed to spur

banking activity. Banks that fail may

have licenses revoked.

Reuters

Most of Iraq’s private banks have reached the central bank’s $85 million capital requirement level aimed at diversifying the financial sector’s activities, the head of a private banking association said on Tuesday.

Iraq is slowly getting back on its feet as it emerges from years of war and economic sanctions, and Iraqi banks hope that multi-billion dollar deals signed with international firms to develop the country’s vast oil reserves will spur lending and help private financial institutions flourish.

The central bank laid out a three-stage programme in 2009 for banks to raise their capital. The deadline for the first stage is end-June, when banks should reach capital levels of 100 billion Iraqi dinar ($85 million).

By June 2012, banks need to boost capital to $128 million and the third stage is for June 2013, by which time capital levels need to be at $213 million.

Abdul-Aziz Hassoun, executive director of the Iraqi Private Banks League, an independent organisation to support private banks, said 22 banks had so far reached the $85 million target.

He said another three banks were in talks to merge in order to reach the required level.

“The private banks are on the right path,” Hassoun told Reuters during an interview.

“Only seven banks did not undertake increasing their capital and they have to explain this to the central bank,” he said, adding that the central bank may withdraw the licences of banks that failed to meet the target.

According to the central bank website, OPEC oil producer Iraq has seven state-owned banks, 23 private banks, and eight Islamic private banks.

Its banking sector is dominated by two state-owned banks, Rafidain and Rashid. Much of the private banking activity is limited to deposit services and a small amount is personal lending.

“I personally agree with the capital increasing (decision)…in order to be able to enhance the financial entities’ capability to handle huge banking operations which are monopolised by the government banks,” Hassoun said.

He said private banks also needed to increase other services such as credit cards and ATM machines. Only eight private banks currently offer these services.

Ahmed al-Buraihi, a central bank deputy governor, told Reuters on Tuesday it was important to increase private banks’ capital to help raise their lending capacity.

“This planning is based upon anticipating the future of Iraq’s economy,” he said, referring to expected huge growth in the country’s oil and industry sectors. (By Aseel Kami; Editing by Serena Chaudhry and Toby Chopra)