An economist warns of the “extremely dangerous” paragraph in the recent statement of the Central Bank

An economist warns of the “extremely dangerous” paragraph in the recent statement of the Central Bank

2023-08-04 03:58

An economist warns of the extremely dangerous paragraph in the recent statement of the Central BankShafaq News/ The economist, Shawan Al-Zangana, warned, on Friday, against limiting merchants’ remittances in hard currency, represented in US dollars, through the electronic platforms of the Central Bank of Iraq, saying that this measure will lead to stopping the entry of imported goods into the markets in the country.

Commenting on the statement issued yesterday, Thursday, by the Central Bank regarding dealing in dollars and the exchange rate, the expert told Shafaq News agency, “It contains a very dangerous and sensitive paragraph. The Central Bank, as a treatment for the dollar crisis, in his belief, will oblige merchants to prove that their transfers have been made through the platform, If their goods enter Iraq through customs, and this clearly means that merchants will not be able to import their goods except through the platform, as the remittance document will have to be shown through the platform in all customs clearances.

He added, “If this decision is implemented in its proper form, without facilitating transfers through the platform for all merchants, the supply chains through customs and the entry of goods will stop, until the procedures are amended, and this means that imports will stop, and all goods will be scarce in the local markets, and thus prices will rise.” And the pace of inflation escalated, and a large number of merchants were affected, not to mention the citizen’s loss of his purchasing power.”

Al-Zangana also warned the federal government and the Central Bank of Iraq against the immediate implementation of this decision, in this abstract form, without preparing the ground and enabling all merchants to use the platform properly and smoothly, and facilitate its procedures, including delaying the presentation of the transfer document until after the entry of goods. within a certain period of time.”

He pointed out that “the government measures, all central bank procedures, are flimsy cartoon measures that do not help solve the monetary crisis, but on the contrary, they are measures that aggravate the problem and help smuggling.”

The economist called on all chambers of commerce, federations of businessmen, civil organizations, research institutions, and economists to organize seminars in this regard, to actively contribute to resolving the monetary crisis, and to propose plans and recommendations that contribute to legalizing dealing in hard currency, and ending the crimes of speculation and smuggling. .

He also called for moving quickly before it is too late, because the Iraqi financial administration lacks sound vision, suffers from confusion in its compass, and does not put its hand on the wound.

Yesterday, Thursday, the administration of the Central Bank of Iraq considered what is being traded in the markets of the exchange rate of the dollar against the dinar by speculators as “illegal”, calling for the need for all parties to join forces to achieve stability in the exchange rate, especially since Iraq possesses sufficient foreign reserves to meet legitimate needs. .

The administration said in a statement that the application of the system of foreign transfers, documentary credits and cash sale of foreign currency involves achieving economic, regulatory and legal goals, including the following:

Enhancing anti-money laundering and terrorist financing measures, and preventing the risks of local and international sanctions from all relevant parties.

Bringing Iraq’s imports into channels that ensure the safety and transparency of operations, and providing important databases and information for planning, organizing and control purposes.

Achieving additional revenues for the state by subjecting all imports to procedures for comprehensive registration of their details and the resulting fees.

Gaining the trust of accredited international banks, which expands the network of relations between the local and foreign banking sector, and increases the number of Iraqi bank correspondents.

Closing the outlets for illegal foreign transfers, besieging the proceeds of crime and corruption, and preventing them from finding a way to escape abroad.

Not charging imported goods with the exchange rate difference resulting from paying a higher price when buying them at the unofficial rate on the black market, which leads to higher prices and a negative impact on the purchasing power of citizens.

The groups that buy the dollar from the market and create an opportunity for speculators and beneficiaries to trade an unofficial exchange rate are:

Importers of merchants who do not follow the fundamental methods of external transfers (remittances and documentary credits) via the electronic platform, which is available to them at the official price, through attempts to collect cash dollars that are exclusively for citizens’ travel from the market, or by using electronic payment cards designated to pay citizens’ purchases and expenses abroad. , or for personal transfers for legitimate purposes.

Importers of prohibited or narcotic substances such as drug dealers and others, or of materials that do not pass through the official border crossings, to escape the requirements of the law or customs, such as importers of cigarettes and some importers of precision instruments, so they go to the market to buy dollars that are not allocated to them to pay their bills.

The category that generates revenues from the proceeds of crimes, such as bribes, thefts, kidnapping, extortion, selling contraband, etc., and they transfer them abroad to hide them.

Citizens who pay for their purchases of goods and services inside Iraq in dollars, which prompts them to buy dollars from the market, and since there is no allocation from the central bank’s sales of dollars for this purpose, their purchase is from a share allocated for other purposes, especially travel.

In order to address the aforementioned phenomena, and reduce the phenomenon of the illegal market, and an exchange rate higher than the prescribed one, work is being done with the government and the relevant authorities to take the following measures:

Merchants and importers use the prescribed channel for that, via the electronic platform, to achieve the objectives of this system and prevent the use of cash dollars in the market for other than its purposes, and this requires obligating this category to provide evidence that the amount of their imports has been duly transferred when their goods enter Iraq at the official border crossings.

Stimulating and supporting categories of merchants to enter the electronic platform by simplifying procedures, especially tax ones, defining their ceilings in advance according to categories, and depositing them in the account of the General Tax Authority through its bank accounts.

Tightening control over the official border crossings and closing unofficial ones, coordinating between the federal government and the regional government regarding the organization and unification of entry procedures for goods and the fees imposed on them, and preventing the entry of prohibited and legally prohibited materials.

The competent authorities undertake the strict application of Cabinet Resolution No. (23026) for the year 2023, which includes limiting the sale and purchase of goods and services in Iraqi dinars inside Iraq.