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Direct from CBI:

December 29, 2022
The deposit mechanism for the purpose of subscribing to the window
To implement the objectives of the monetary policy of this bank during the next stage, it was decided to allow banks wishing to participate in the foreign currency buying and selling window to purchase any amounts in foreign currency and deposit them with this bank in accounts used for external transfer purposes only and pay interest /returns on those balances according to the mechanism described below:

1. The annual interest rate of 5% (five percent) is calculated after the end of each month on the basis of the lowest daily balance achieved for the bank during the days of the month in the account allocated for external transfer purposes (transfers that will be carried out through the window of buying and selling foreign currency).
2. Cancellation of the mechanism of strengthening the accounts of banks abroad by classification.
3. Cancellation of Paragraph (D/3 / II) of the controls on the sale and purchase of foreign currency for the year 2021, according to which banks had previously been directed to deposit five working days before the date of execution of the external transfer.
4. The bank's transfer request is executed within two working days from the date of submitting the transfer request
5. The available balance in the account allocated for external transfer purposes is assessed in dollars according to the exchange rate of 1460 dinars.
6. The response rate to external transfer requests submitted by the bank shall be 75% (seventy-five percent) or as determined by this Bank of the daily balance available in the account allocated for external transfer purposes.
7. The above mechanism does not include documentary credits executed through the (dinar - dollar) window, because it is executed at 100% (one hundred percent) to encourage banks to finance foreign trade through documentary credits at a competitive exchange rate of (1465) dinars to the dollar, as this bank sells dollars to banks at (1455) dinars to the dollar instead of (1460) dinars to the dollar, provided that the documentary credit is executed within two working days from the date of submitting the bank's application.
8. The following formula is adopted for Islamic banks:
A-the interest rate is calculated at the end of the month based on the number of days that the bank deposited during the relevant month based on the lowest balance achieved during the month in the account allocated for foreign transfers and then subject to the specified interest rate of 5% (five percent).
B-this bank, as an agent of the Islamic Bank, determines the lowest balance deposited by the bank in the account allocated for external transfer purposes during the days of the month in which the return is to be calculated, and uses the balance to purchase a globally tradable commodity (such as aluminum, palm oil, etc.) for the bank through one of the platforms of the International Stock Exchange, and then the bank buys it at a price higher than the purchase price with a difference representing the percentage of the specified return.
9. When the bank wishes to withdraw from the account allocated for the purposes of executing foreign transfers, the amount to be withdrawn is transferred to the bank's current account in the currency of the Iraqi dinar.

This decision will be implemented in the light of the above as of 2023/1/2.

1.44K viewsJenny B, 03:35