Iraq Central Bank Strikes Key Deals To Bolster Currency Reserves
ICB faces criticism over unconstitutional currency import methods
Iraq’s Central Bank has initiated agreements with foreign countries to enhance the reserves of Iraqi private banks in various currencies, amidst growing domestic challenges. These developments come amid calls for a no-confidence vote against the bank’s governor due to economic pressures and the declining value of the Iraqi dinar against the US dollar.
According to the Iraqi News Agency, the bank and US officials have reached an agreement to bolster the reserves of 10 Iraqi banks with US dollars. The agreement, made in Abu Dhabi, allows five banks to work with Citibank and another five with JP Morgan. Furthermore, the bank is increasing the number of banks permitted to hold reserves in the Chinese Yuan through the Singapore Development Bank to 13, with two banks already strengthening their reserves in Indian Rupees.
These measures are aimed at supporting nearly 95% of Iraq’s foreign trade needs, which rely on foreign currencies. Additionally, the bank is exploring ways to boost Iraqi banks’ balances in Emirati Dirhams, Euros, Chinese Yuan, and Indian Rupees, particularly for financing imports in the pharmaceutical and food sectors.
The bank’s decision to allow private banks to import foreign currencies via commercial flights has sparked controversy, with critics labeling it unconstitutional. This has contributed to a parliamentary motion to remove the bank’s governor, who is also facing criticism for failing to stabilize the dinar’s value against the dollar, despite a government-approved currency revaluation earlier this year.
https://themedialine.org/headlines/iraq-central-bank-strikes-key-deals-to-bolster-currency-reserves/
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