New Dollar Shipments May Reduce The Exchange Rate In Iraq , 22 DEC

 New Dollar Shipments May Reduce The Exchange Rate In Iraq

December 21, 2023 Last updated: December 21, 2023 Independent / - Iraq is awaiting new dollar shipments imported by government and private banks after the recent agreements between the Central Bank of Iraq and the American side.  It is hoped that they will contribute to curbing and reducing exchange rates in the parallel market.

Although government sales are made at a price of 132 thousand dinars per hundred dollars, prices in the parallel market currently range between 153 thousand and 155 thousand per hundred dollars.

Central Bank And Government Actions

The head of the Association of Private Banks, Wadih Al-Handal, said,  “The recent measures of the Central Bank of Iraq and the government, with regard to facilitating trade financing using new currencies, represented by the euro, the dirham, the Chinese yuan, and the Indian rupee, are a step that contributes to reducing the exchange rate of the dollar in the parallel market,” noting that “  “The regulation of trade financing carried out by the government and the central bank through the entry of other goods into the platform will lead to an increase in trade financing.”

He confirmed in a statement to his independent newspaper, Al-Sabah, that

“private banks are taking great steps in expanding international relations with international banks, which facilitates the financing of Iraqi trade with countries of the world,” explaining that

“the Prime Minister’s great support for the private sector is considered the beginning of reforming the economy.” "The Iraqi sector, especially since

the private sector is an important partner to the government, in providing services and jobs and reducing poverty."

Use the instructions of the Central Bank

For his part, economic expert Dr. Mustafa Hantoush explained to “Al-Sabah”:

The Central Bank used Instructions No. 4 of 2011 regarding the import of currency by banks licensed in the country that have the right to carry out this process to enhance capital or for the purposes of addressing monetary crises. He added that

the US Federal Bank had earlier reduced the dollar payments that were delivered to the Central Bank due to money laundering and the seizure of the dollar by some countries close to Iraq, but

the Central Bank agreed with the US Treasury on a successful and correct step to support local banks by establishing relationships with foreign banks. And the gradual transition of operations to enhance the balance of its accounts, which is consistent with what the bank previously announced in its plan to gradually reduce dependence on the electronic platform until it ends its work next year. Hantoush stated that

Capital Enhancement

there are banking transactions and deposits received in dollars, and related operations were carried out in dinars with the approval of the Central Bank, because the depositor requests dollars or transfers coming from abroad that are deposited in bank accounts, and

there is no payment in dollars except in dinars, which requires strengthening capital, and according to this process, the Central Bank Al-Iraqi agreed with the US Treasury on a successful step in this regard. He continued that

the American side deals as a merchant, concerned with the issue of profit, by imposing a reduction in the supply of the dollar, but

on the other hand, when it sees its banks and companies making a profit, it agrees to most of the procedures, and  it is a theory that it follows in managing the world economically.

New Shipments

It is noteworthy that a government source revealed that government and private banks imported $255 million within two weeks, and that

a number of other requests to import the dollar are on their way to being audited and implemented, with other amounts expected to arrive within the next few days.

The Importance Of Financing Small Merchants

In turn, Imad Al-Muhammadawi, who is interested in economic affairs, told Al-Sabah:

The steps taken by the Central Bank, represented by approaching banks to finance small merchants from Turkey in the euro, are extremely important as it reduces the burden and crises of using the dollar in commercial transactions. He pointed out that

 this step will contribute to encouraging Iraqi merchants to import goods from Turkey, in a way that serves the Iraqi economy and the needs of citizens. Al-Mohammadawi concluded that

these measures are positive and indicate that the government seeks to address the problem of the high exchange rate in the country, but

it is important that these efforts continue and be integrated with other measures, such as combating corruption and supporting local production.

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