DINAR REVALUATION REPORT: Iraqi Central Bank and US Federal Reserve Discussions Achieve Advanced Results, 7 SEPT

Iraqi Central Bank and US Federal Reserve Discussions Achieve Advanced Results

Discussions between the Central Bank of Iraq (CBI) and the US Federal Reserve have reached advanced stages, marking a significant milestone in bilateral financial relations. 4 The CBI recently announced the outcomes of a high-level delegation visit to the United States, led by Governor Ali Mohsen Al-Alaq, from August 26 to 29, 2024. 1 The delegation engaged in extensive meetings in New York with key US financial institutions, including the US Treasury, the Federal Reserve, and major players such as Visa, Mastercard, MoneyGram, Citi Bank, JP Morgan, and international auditing firms like KPMG, Ernst & Young, K2i, and Oliver Wyman.

Advancements in Foreign Transfer Monitoring and Cash Sales of US Dollars

The meetings highlighted the CBI's significant progress in monitoring foreign transfers and cash sales of US dollars, aligning its systems and policies with international standards. These efforts have bolstered transparency in foreign trade financing and strengthened defenses against money laundering, terrorism financing, and other financial crimes. 1

Transition to Direct Banking Relationships

Among the notable outcomes was the CBI's announcement of plans to shift from the current electronic platform for foreign transfers to direct banking relationships between Iraqi banks and international correspondent banks by the end of 2024. 1 This move, developed in consultation with global partners, aims to enhance the stability, transparency, and efficiency of Iraq's foreign trade financing, contributing to a more stable exchange rate and a stronger financial system.

Expanding Correspondent Banking Network

Discussions in New York also focused on expanding Iraq's network of correspondent banks and preparing Iraqi banks to meet the requirements for opening accounts with international banks, facilitating transactions in both US dollars and other foreign currencies. 1

Regulated Dollar Transactions Rising

In a related development, Iraq has significantly increased overseas dollar transactions through the official global SWIFT system, as part of reforms to combat money laundering and ensure compliance with international sanctions. 5The Central Bank's Deputy Governor Ammar Khalaf reported that transactions through the Central Bank electronic platform have considerably increased, reaching around $200 million per day, consistent with Iraq's economic size. 5

Conclusion

The advanced results of the discussions between the CBI and the US Federal Reserve underscore Iraq's commitment to financial reforms and international cooperation. These developments are anticipated to contribute to a more robust and transparent financial system, improving Iraq's economic stability and international trade.