Friday, September 20, 2024

DINAR REVALUATION REPORT: CBI Governor Ali Al-Alaq's Statement on Dollar Provision and Exchange Rates, 20 SEPT

CBI Governor Ali Al-Alaq's Statement on Dollar Provision and Exchange Rates

On September 20, 2024, Ali Al-Alaq, the governor of the Central Bank of Iraq (CBI), reassured the public that the bank has mechanisms in place to guarantee the provision of dollars at the official rate for all legitimate activities and operations. 

Financial Transfers and Exchange Rates

Auditable Transfers

Al-Alaq emphasized that all financial transfers are auditable and undergo a rigorous review process before implementation.  This ensures that operations are secure and controlled, providing dollars for commercial and personal channels, travelers, and other legitimate requests.

Exchange Rate Unrelated to Oil Prices

He clarified that the rise in exchange rates is not connected to the decline in oil prices. Iraq's foreign currency reserves are sufficient to defend the exchange rate, demonstrating the country's financial stability. 

New Mechanisms for Dollar Provision

Enhanced Control Measures

The CBI has developed methods for each channel that secure dollar provision and exert significant control to verify the safety of operations prior to their execution. This includes a shift in external transfers, where audits now occur before transactions are carried out.

Official Exchange Rate Supports Foreign Trade

Al-Alaq highlighted that the official exchange rate supports foreign trade that meets the needs of citizens, emphasizing the importance of focusing on the volume of sales conducted by the CBI at the official rate. 

Shift from US Dollar for Internal Transactions

In a significant move, the CBI announced that commercial lenders in Iraq must use domestic currency for internal transactions from January 2024.  This decision comes amidst a dollar shortage in the country, as tensions between the US and Iraqi governments have led to a growing shortfall.


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