Iraq Plans To “Neglect The US Dollar” And Parliament Proposes “Diversifying Foreign Currency Baskets”
Baghdad today - Baghdad The House of Representatives Finance Committee said today, Monday (November 13, 2023), that there is a necessary and important need to diversify the basket of foreign currencies in Iraq and not rely on the US dollar in commercial transactions.
Committee member Moin Al-Kazemi told “Baghdad Today” that “the basket of foreign currencies in Iraq must be diversified and not relied on the dollar in commercial transactions, whether external or even internal, as this reduces American dominance over the Iraqi economy.”
He added, "The Iraqi economic ground is ready and prepared to strengthen banks in various foreign currencies and not be limited to the US dollar, and there is a real trend by the monetary authority in this matter, and the coming days will witness various commercial transactions through the UAE dirham as well as the Chinese yuan and other currencies, and this will reduce demand." On the dollar, and it will have an impact on reducing the dollar exchange rate in the parallel market.”
Last Saturday (November 11, 2023), a government source in Iraq said that officials from the Central Bank of Iraq held “intensive meetings” with American officials in Abu Dhabi in recent days to discuss external transfers to cover imports.
The source added, according to what was reported by the “official agency,” that “Iraq has strengthened its assets denominated in the yuan through the Singapore Development Bank to finance Iraqi trade and imports with China by about 12 billion dollars annually.”
The source stated that the oil-exporting country also moved to strengthen its assets in UAE dirhams and is negotiating to increase its assets denominated in euros to finance trade with the European Union, according to what was reported by Iraqi news agency “Inaa.”
The source added that negotiations with the American side reached a set of decisions and mechanisms that contribute to facilitating procedures for foreign transfers related to imports through the foreign currency sales window.
He added, "It was agreed to enhance the advance balance of five Iraqi banks in their dollar accounts with Jordanian banks and transfers via JP Morgan Bank," noting that "the problems related to the rejected transfers were resolved, and it was agreed that the rejection of transfers should be based on strong reasons."
He continued: “There were also other meetings that brought together one of the Emirati banks, the Central Bank of Iraq, and the American side, to implement the mechanism for enhancing balances in the Emirati dirham for Iraqi banks,” indicating that “things are going well in this aspect, as all technical details related to the issue have been resolved, and it is expected to begin.” The mechanism for enhancing balances in UAE dirhams during the next few days.”
He stressed that "there are serious negotiations that have reached their final stages to enhance the balances of some Iraqi banks in euros with UBAF Bank to finance trade with the European Union," noting "an increase in the number of banks whose balances in Chinese yuan are being enhanced through the Singapore Development Bank."
The source also reported that bank accounts had begun to be opened in Indian rupees for a number of Iraqi banks at the same correspondent, the Singapore Development Bank (New Delhi branch), and operations to enhance the balance of two Iraqi banks had actually taken place as a first stage, and it is expected that this mechanism will contribute to financing Iraq’s imports from India, especially medicines and materials. Food, which is estimated at about $3 billion. LINK
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