"TBI plans to begin using the new trading system soon after the Eid holidays. It expects the necessary computer server to arrive in Baghdad by the end of this week, said the bank’s President and Chairman Hussein Al Uzri:
Reuters Helps Iraq Enter Modern Banking27 November 2009
DUBAI — Iraq has taken a symbolic step toward re-integrating into the global economy, with an agreement to connect an Iraqi bank electronically with international currency markets.
Executives for the Trade Bank of Iraq and UK-based information provider Thomson Reuters signed a deal in Dubai that makes TBI the first bank in Iraq to plug into the electronic money markets that most financial services firms take for granted.
“It’s a real sign that Iraq is back and in business,” Thomson Reuters Deputy Chairman Niall FitzGerald told a news conference on Wednesday.
TBI was founded in 2003, after the US-led invasion of Iraq, to facilitate Iraq’s international trade. Until now, it has had to buy and sell foreign currencies by telephone. This outdated technique limits the number of counterparts the bank can trade with, reducing the liquidity and potential profit in any currency deal.
Trading over the phone also gives rise to frequent misunderstandings and occasional disputes with trading partners, TBI executives said.
By using the Thomson Reuters Dealing trading service, the bank will be able to execute currency trades faster and offer a wider range of services to its customers, TBI’s Vice-President for Development Zaid Mahdi told reporters.
Basil Moftah, Thomson Reuters’ managing director for the Middle East and Africa, told Khaleej Times that the deal had practical and symbolic significance.
“If the war was about having Iraq join the world community as an equal nation, then this surely is a milestone in terms of literally plugging into the same pool” of electronically traded currencies as banks in most other countries, he said after the signing ceremony.
TBI plans to begin using the new trading system soon after the Eid holidays. It expects the necessary computer server to arrive in Baghdad by the end of this week, said the bank’s President and Chairman Hussein Al Uzri.
Moftah declined to specify the value of the contract between his company and TBI.
However, he said that comparable Thomson Reuters deals with other banks were typically worth “several hundred thousands of dollars” each year, including product support.
“I’m not expecting huge volumes of trades from Iraq” as a result of the TBI contract, Moftah said in an interview. ”But more importantly, it’s really about continuing to expand our network.”
Thomson Reuters already does business with media companies and government agencies in Iraq. TBI is its first financial customer there, and Thomson Reuters is seeking business from other Iraqi banks as well.
“There’s at least another half a dozen or so that we’re in active discussions with at this stage,” Moftah said.
“Iraq has the potential to become the third-largest producer of oil in the world, so it’s not a very difficult picture to imagine what that would mean for Thomson Reuters in the medium- to long-term future,” he added.
Concerns about physical security and political uncertainty in Iraq have impeded the country’s efforts to rebuild after decades of war and deprivation.
FitzGerald said that his company had “an emotional attachment” to Iraq as well as a commercial interest, given that seven Reuters news agency employees have died in Iraq in recent years.
TBI’s Al-Uzri understands all too well the risks involved in helping to lead Iraq’s economy into the modern age. Last September, he was driving in the Iraqi capital when a suicide bomber rammed a car into his armour-plated sports utility vehicle.
The bomb exploded “less than a metre” away and shot flames into Al-Uzri’s vehicle.
He suffered burns on his hands and face, but escaped the shrapnel from the blast. “I was lucky,” he said, with calm understatement.
bruce@khaleejtimes.com
