Iraq’s Central Bank Urged to Cease Dollar Sales and Rely on Black Market for Stability, 7 OCT
An economic expert in Iraq has urged the Central Bank of Iraq (CBI) to adopt a radical new approach to achieve market stability. The expert recommends that the CBI cease selling dollars in exchange for the national currency, instead suggesting that the bank should leave it to the black market to stabilize the currency. This controversial proposal has sparked significant debate in economic circles.
Counteracting Currency Smuggling
The expert’s recommendation hinges on the belief that currency smuggling is a direct result of the central bank’s current practices. He argues that the dollars injected by the CBI into the market do not benefit Iraqi citizens, leading to the smuggling of currency. By leaving the issue to the black market, the theory is that the exchange rate may stabilize naturally without the need for government intervention. While this approach is unorthodox, it reflects the dire economic conditions in Iraq and the need for innovative solutions.
A Coordinated Effort
The expert indicates that the decision to halt the injection of dollars into the market from the beginning of next year is a coordinated effort with the International Monetary Fund (IMF) and the US Treasury. This action is intended to prevent the US dollar from reaching Iran and Turkey, thereby curbing the influence of these countries in the region. The central bank and other banks will be expected to exchange foreign currencies at the government-set rate to maintain some level of control over the exchange rate.
The Future of Iraq’s Economy
The exchange rate of the US dollar against the Iraqi dinar closed at 158,500 dinars in the Sulaymaniyah stock exchange, a rate that is reflective of Iraq’s struggling economy. If the CBI does adopt the black market approach, it will be a significant shift in the country’s economic policy. The response from the international community and the impact on Iraq’s economy are uncertain, but the proposal is indicative of a growing desire for drastic change to address the economic issues in the country.
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