Central Bank of Iraq Ushers in New Era with Photographic Measure, 25 OCT

 Central Bank of Iraq Ushers in New Era with Photographic Measure, 25 OCT

In the heart of Iraq, a silent revolution is taking place. It’s a revolution not of guns and violence but led by the central financial institution of the country. The Central Bank of Iraq (CBI) is making a resolute stand against fraud and lack of transparency in foreign exchange transactions, ushering in a new era marked by a unique measure: the requirement of a photograph with each dollar sale request.

Transparency Through Photography

The Central Bank’s decision is rooted in a strategic effort to combat fraud and bolster transparency in the country’s foreign exchange transactions. With the implementation of this measure, the bank reported a sale of approximately $33 million in cash. Yet, this is just the tip of the iceberg in an ocean of change that the Central Bank is navigating.

Beyond this initiative, the CBI has also seen an 82% surge in foreign exchange transactions at its auction, reaching a total of $180 million. The majority of these dollar sales were allocated towards strengthening foreign balances through remittances and credits, amounting to a staggering $180,988,961. This rise marks a significant shift compared to cash sales, which stood at a relatively meager $32,840,000.

Exchange Rate Challenges

However, the landscape is not without its challenges. Despite the surge in foreign remittances, the exchange rate of the US dollar against the Iraqi dinar in the parallel markets continues its upward trajectory. This unnerving rise is attributed to a controversial policy of keeping ports of entry open to countries under sanctions.

The ramifications of this policy decision are evident in the local markets of Baghdad, where the rising exchange rate has led to higher dollar prices. With the closure of the main stock exchanges in Baghdad, dollar prices recorded 162,000 Iraqi dinars against 100 dollars. The selling price in the exchange shops in the local markets saw an upward trend as well, reaching 163,000 dinars for 100 dollars.

Navigating the Gold Reserves

As Iraq grapples with these economic challenges, the Central Bank of Iraq holds a significant amount of gold stored in London. These reserves are intrinsically linked to the price of the dollar, serving as a reserve for central banks. When the dollar shows signs of decline, the demand for gold increases, causing a rise in its price. However, predicting the future price of gold is akin to navigating a labyrinth, given its association with the dollar’s price, which is in turn influenced by a myriad of unstable economic and political events worldwide.

In conclusion, Iraq is at a crossroads, facing economic challenges, including the rising exchange rate of the US dollar against the Iraqi dinar and the need for comprehensive economic reforms. The Central Bank’s measures to increase transparency and combat fraud in foreign exchange transactions are steps in the right direction, but the road to stability is long, and it requires more concerted efforts to improve the overall economic situation in Iraq.

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