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Iraqi Dinar Report Counterfeiting Iraq Currency
Iraqi dinar being Counterfeited
American Contractor Iraq Report 01/08/2017
Criminal gangs counterfeiting the Iraqi dinar currency
While the Iraqi Army is continuing their ongoing battle in the city of Mosul, the Iraq Economic and Investment Commission Parliament members received disappointing news of heightened incidents of counterfeit Iraqi dinar currency. Shopkeepers at the local Baghdad market, outside the International Zone (formerly the green zone), were angered at receiving counterfeit 5,000 and 10,000 Iraqi dinar currency banknotes. There have been frequent reports that there are mafia groups and criminal gangs operating within the Baghdad area who are counterfeiting the Iraqi dinar currency. The criminal gangs are mostly concentrating on the 5,000 and 10,000 IQD banknotes due in part to them being easier to counterfeit than say the 25,000 IQD banknote. The Director of the Central Bank did not appear flustered or too concerned about the report of counterfeit dinars floating around. The CBI just swiftly replaced all counterfeit banknotes turned in by the shopkeepers. The parliament members from the Economic and Investment Commission sent an emergency Memorandum to the Central Bank and summoned the bank’s Director. Prior to the meeting, the CBI Director had been tipped off on the meeting’s agenda and issues.
The senior ranking member of the Iraqi Economic and Investment Commission is a woman by the name of, Najiba Najib. This is the very same woman that I have spoken about in prior articles. She has full authority on matters related to the Iraqi dinar currency. This woman is single handedly responsible for halting the delete the zeros project in 2014. How influential is this woman? Najiba Najib is so powerful, that on any given day she could randomly announce “today we increase the value of the Iraqi dinar currency”. That’s the power Najib possesses. Currently, insider reports are leaking that there is much friction between Najiba and the Director of the CBI. The reason being is that Najib wants to delay the launch of deleting the zeros project that the Central Bank so adamantly wants. Najib is insisting that they wait until year 2018 or 2019.
Private Iraqi banks refuse to give depositors their money
Iraqi citizens are going to the banks and are demanding the withdrawal of their deposited funds. The problem is that the private banks have no liquidity, no money and are refusing to return the depositors money.
Central Bank places five banks in receivership
In Iraq the Iraqi Central Bank has the authority and the oversight to shut down any bank in the country. If the bank is not in compliance with CBI banking laws it would have the option to shut down any private, State, and Islamic bank. The CBI has shut down and has complete oversight of the following five Iraqi banks (see below). These are the same banks that the depositors are having difficulty withdrawing their deposits from. When you’re in receivership the CBI has complete control of your bank and bank books. The CBI has recommended that these banks either liquidate or merge with other banking institutions. The problem with merging is that most of these banks are family owned and refuse to merge with another bank for fear of losing control of their private Iraqi bank.
Dar Essalaam Investment Bank
North Bank for Financial & Investment
Economy Bank for Investment & Finance
Basra International Bank for Investment
In the past, the Central Bank has wanted Iraqi banks to increase their operating capital, which most of the banks did. The banking services of Iraqi banks are not up to the standards of the 21st century. With the increase of banks in Iraq you would think that this would entice Iraqi citizens would want to open up bank accounts. Unfortunately, Iraqi citizens have no confidence in the system and until the banks offer more services it will remain the same in 2017. In addition, the banks are not offering any small loans or additional banking services. Most banks are making their profits on the currency exchange transactions, and for this reason the CBI will continue with the daily currency auctions.
Central Bank Daily Auctions
The Central bank conducts a daily auction of selling U.S. dollars for the Iraqi dinar currency. The Central Bank sells hundreds of millions of dollars each day to private banks and authorized currency exchange centers. The CBI does so much business that it generated $33 billion dollars in 2016. In fact, there are several Iraqi banks that do not provide any service but currency exchange. If and when the CBI halts the currency auctions, the banks that depend on the currency auctions would more than likely go out of business. The banks are going to the daily auctions and conducting the transaction for hard currency (USD) and it’s being smuggled abroad.
The terrorist take control of Iraqi banks
In June 2014, when the terrorists invaded and moved swiftly into northern Iraq taking full control of the major cities in Anbar province, they took immediate control of all the banks in the providence. This impacted the banking institutions in Iraq as they watched the terrorists remove all of the Iraqi dinar and U.S. dollars that were stored inside the bank vaults.
Central Bank re-opening branches in Erbil and Sulaymaniyah
Three years ago, the CBI shut down their bank branches in the city of Erbil and Sulaymaniyah. The Kurdistan Regional Government (KRG) decided that they would take control of their own finances when it comes to the KRG government. The KRG has a billion dollars in deficits. Recently, CBI has decided to re-open the CBI branches in those two cities to assist the KRG with their finances and obtaining funds to their governments.
In Iraq E-Commerce still in the distant future
Internet in Iraq is available, however, it is very expensive. A recent article falsely reported that there is an electronic payment system in Iraq, just like in the United States or anywhere else outside of Iraq. The truth of the matter is, that there is no electronic payment system that is available to anyone in Iraq for the sale of goods and/or services. It is still a cash society. Most vendors must buy their materials and products upfront with the seller, who often are outside of Iraq. The materials or products are transported by truck over the Iraq borders or are shipped by boats to the port.
Real Estate prices in Iraq down 40%
In Iraq, there is a massive shortage of first time home buyers/owners. Traveling throughout Iraq one will often see unoccupied homes with no one living in them. Many times the construction has not been completed. In fact, there are numerous construction projects that are either not completed or partially completed. The money and funds have all dried up. On the rare occasions that banks are agreeing to loans they are only lending out about 50 million Iraqi dinar per person or family. Unfortunately, this is not sufficient enough to purchase a nice apartment in the Baghdad area. The families are accepting the loans and buying very inexpensive small RV type vehicles and making their homes in them. The recent Iraqi government budget for 2017 shows no available funds for loans to the public. Iraqi landowners have drastically dropped the prices to entice buying but no one is buying anything. Interestingly, private banks in Iraq are the largest landowners in the country. The banks have now decided to hold onto the deeds in hopes of the economy returning to prior conditions where things were flourishing. Source
1/1/2017 There has been an interesting article published in the Middle East media. The Central Bank of Iraq has warned the private Iraqi banks to give depositors their funds when they ask for it from the Iraqi banks. The Iraqi private banks have not been cooperating with their bank's depositors who on a daily basis have been wanting their deposits back.
If I had funds inside a private bank, I would pay attention to this story. Let's hope that the Central Bank takes all these private Iraqi banks that are not cooperating with their depositors to court and the people get their money back.
Will keep you informed on what is going on in Iraq.
Want to learn more watch the video below.
1/1/2017 Central Bank of Iraq to put Private Banks on Notice
The Banking Industry in Iraq
DECEMBER 31, 2016 BY AMERICAN CONTRACTOR
The Banking Industry in Iraq How to receive More US dollars and bypass currency restrictions
The Iraqi private banks are still in limbo. They continue to operate with limited funds even after the Central Bank of Iraq (CBI) directed all private banks to increase their operating capitals from the previous June 2016. An Iraqi Parliament member from the Economy and Investment commission recently stated that the Iraqi private banks are operating the dollar auctions with forged invoices to import foreign commodities.
The private Iraq banks have limits that are imposed by the CBI each day in regards to foreign currency exchange. How the Iraqi banks get around this is called Letters of Credit (LC) and that allows the Iraqi banks to exchange Iraqi dinar (IQD) for foreign currency (primarily U.S. dollars.)
I’ll give you a brief explanation on what happens when a private bank wants to increase their dollar exchange beyond the CBI recommendations. Here’s a scenario; you have an Iraqi businessman that is buying materials from an Iranian manufacturer who wants to be paid in U.S. dollars, this Iraqi businessman will likely need to visit an Iraqi bank to complete the transaction. The Iraqi bank receives the documents from the Iraqi businessman detailing the purchase of say, one million dollars of materials that happens to be located in Iran. The Iraqi dinar (IQD) currency that is equaled to one million dollars is deposited inside the Iraqi bank. The Iraqi bank representative travels to the nearest Central bank currency exchange and gives the documents to the CBI representative detailing the business transaction. The Iraqi bank representative then receives the US dollars and returns back to his Iraq bank. One might think that this is all legit and that the Iraqi bank probably does this several times a day (assists Iraqi businessman.) After all, the assumption is that this is what a bank does in Iraq, to assist businessman in acquiring funds for their construction projects. The only problem is, the Iraqi businessman gave fraudulent documents to the Iraqi bank. There are no materials in Iran that he intends to purchase. It’s all a fraud and many times it’s done with full knowledge of the Iraqi bank. This is how the Iraqi banks and many foreign exchange services get around the daily limits of foreign exchange. In addition, they sometimes offer business documents to start the process of foreign currency exchange. This is just another way the banks acquire more U.S. dollars and then they turn around and sell at a higher price. The banks buy the USD at a low price and then sell the USD to the businessman or the public at a higher price. source
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