The Dollar Crisis Is Worsening In Iraq: Quarrels Within Private Banks, 6 OCT

 The Dollar Crisis Is Worsening In Iraq: Quarrels Within Private Banks

Posted On2023-10-06 By Sotaliraq    Iraqis who have accounts in private banks complain of the inability to receive their money transfers that reach them from abroad in hard currency, even though they have contracts for their salaries, official books, and documents related to their companies and interests, while banks refrain from delivering dollars to Iraqis under the pretext of a government decision prohibiting the circulation of the dollar and dealing in the dinar.

Iraqi only, what observers consider the beginning of an economic crisis and a new global isolation for Iraq.

The Iraqi Council of Ministers issued a decision, last April, obligating all companies and banks to use the dinar only in their transactions, including the salaries of employees of foreign companies, which were in dollars and paid in dinars, and the official rate is 1,320 dinars, with the exception of diplomatic missions, which are paid in dollars, and in turn the bank The Iraqi Central Bank circulated this decision to the Iraqi banks to adhere to it, which implemented the decision and forced companies to receive all their incoming transfers in dinars and at the official rate, knowing that the exchange rate of the dollar in the markets is close to 1,600 Iraqi dinars.

Representative and member of the “Al-Basas” coalition, Hussein Arab, published a video clip on his account on the “X” platform (formerly Twitter), showing Iraqis angry that they had not received sums of money allocated to them in dollars, but the banks were refraining from giving them dollars.

He wrote: “The acquisition by a non-local private bank of the amounts of financial transfers via the electronic dollar platform, estimated at 70% of Iraq’s transfers, is abnormal and disastrous. We will have a clear position on manipulating the fate of the country’s economy. We will not remain silent.”

For his part, the independent representative in the Iraqi parliament, Hadi Al-Salami, said, “The current failure in the US dollar issue is borne by all the Iraqi governments that have ruled the country since 2003 until now, and the government of Muhammad Shiaa Al-Sudani has pledged to solve the crisis by establishing mechanisms to prevent currency smuggling.” It was difficult, but it did not succeed in this file.”

Al-Salami added, in an interview with Al-Araby Al-Jadeed, that “reforming the banking system and the dollar crisis requires controlling the currency auction, which is still selling large quantities of dollars, and we do not know where it goes,” noting that “the problem is big in Iraq, and we are facing challenges.” Huge amounts that may lead to a crack in the current system, especially since the United States of America has often warned against smuggling the dollar to neighboring countries.”

According to an advisor to the Sudanese government, “The United States of America warned the Sudanese government eight times, publicly and clearly, against the continued sale of the dollar in large quantities through the currency auction window of the Central Bank, and it provided ample evidence that the majority of buyers of the dollar are smuggling it to Iran, Syria, and Lebanon.”

 He explained to Al-Araby Al-Jadeed that “this sale led to the monopoly of the dollar among merchants, and its presence in local and private banks declined.”

Reuters also quoted the Director General of Investment and Transfers at the Central Bank of Iraq, Mazen Ahmed, as saying that “Iraq will ban cash withdrawals and transactions in US dollars as of January 2024,” considering that “the ban is the latest campaign to limit the misuse of Iraq’s currency reserves.” Hard currency in financial crimes and evading US sanctions on Iran.”

But the researcher in economic affairs in Iraq, Wissam al-Jubouri, pointed out that “the government’s continued failure to deal with the dollar file, and depriving Iraqis of receiving their salaries and managing their economic and commercial affairs, is pushing them to leave Iraq, and will lead to discouraging financial transfers from abroad in the future.” .

He confirmed to Al-Araby Al-Jadeed that “all recent government decisions are in line with smugglers, and do not serve the Iraqi economy. Rather, they lead to weak financial dealings between Iraq and the countries of the region and the world.”

Earlier, American officials confirmed that Washington had imposed sanctions on 14 Iraqi banks by preventing them from conducting transactions in dollars, as part of a comprehensive campaign to combat the leakage of American currency to Iran, considering that banks and exchange companies were able to achieve huge profits from their transactions in dollars, through the use of operations. Fraudulent import.

The US sanctions included the banks “Al-Mashashar, Al-Qartas, Al-Tayef, Elaf, and Erbil, in addition to the International Islamic Bank, Trans-Iraq Bank, Mosul, Al-Rajeh, Sumer, Al-Thiqah, Or, Al-Tayef, Al-Alam, and Zain Iraq,” and according to Iraqi sources, these banks are affiliated with religious parties, militias, and armed factions loyal to Iran.

Over the past years, an average of $170 million was sold daily through what is known as the dollar auction, in which merchants, banks, and companies participate, without monitoring the end of that money, which is classified as import trade for the local market in most cases, or foreign transfers, knowing that The actual need for dollars in the markets and among merchants does not exceed $50 million per day, according to experts.   LINK