The Central Bank of Iraq seeks to stop the dependence of the dollar in internal transactions (Al-Jazeera)

The Governor of the Central Bank of Iraq Ali Al-Alaq said that the Federal Reserve (US Central Bank) and the US Treasury Department respond to all requests related to providing and enhancing what Iraq needs from the dollar by following the proper rules and standards for the movement of funds.

Al-Alaq said – in an interview with the official Iraqi News Agency (INA) on Friday – that the Central Bank of Iraq is in constant communication with the US Treasury Department and with the US Federal Bank, noting that "this communication continues permanently, and there are quarterly meetings held to review all matters related to this relationship."

He added that in the meetings, all matters are reviewed, with emphasis and focus on the issue of regulating external transfers in order to ensure the integrity of the financial system, especially after the implementation of the new system of external transfer, which requires a lot of coordination.

He pointed to the creation of a new relationship between Iraqi banks and internationally accredited correspondent banks abroad, where the process is confined between them, and the role of the Central Bank of Iraq and the US Federal Reserve is the process of monitoring and supervision, pointing to the start of a while ago to find a relationship between correspondent banks and Iraqi banks.

Iraq has succeeded in opening more than 40 accounts for Iraqi banks with correspondent banks or abroad, al-Alaq said.

The relationship between the Central Bank of Iraq has diversified the currencies in which transfers are made abroad (Iraqi press)

Currency Diversification

To increase flexibility and facilitation in the external transfer process, Al-Alaq indicated that the Central Bank of Iraq has diversified the currencies in which transfers are made abroad, and there are transfers in addition to the dollar, in both the euro and the UAE dirham.

He stressed that the Central Bank has completed the procedures for opening accounts in dirhams, Chinese yuan and Indian rupees, pointing out that there are understandings with the Turkish side to make transfers through Turkish banks in euros or Turkish currency, noting that all this is done in coordination with the Federal Bank and the US Treasury.

The Governor of the Central Bank said that they aim to reduce pressure on the demand for cash dollars, as importers must carry out import operations through the fundamentalist external transfer, but some traders in Iraq do not take this path, but go to pressure the dollar cash in the market, so the imbalance in the price occurs, and to counter that, the government issued a decision that it is not permissible to deal with the dollar locally.

He pointed out that the general principle approved by the Council of Ministers that trading or payment inside Iraq is in dinars, but there are cases currently being studied that can be excluded.

Source: Agencies

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