The future of international trade transactions in US dollars in Iraq, 19 NOV

 The future of international trade transactions in US dollars in Iraq

The US dollar is the first global currency for foreign trade transactions between the countries of the world, which constitutes 80% of the volume of international financial transactions and represents about 60% of the currencies of international reserves. The dollar is the only currency that absorbs large financial transactions in the oil, energy sector and international oil trading, up to 100 million barrels in addition to other commodities and other currencies constitute within (20%-25%).

The dollar plays a key role in the control of the US economy over the global economy in multiple fields, and many countries tried to get rid of the dominance of the US dollar in previous periods but could not. Therefore, the BRICS group was established, whose member countries, China, Brazil, India and South Africa, are trying to limit the control of the dollar in international trade and banking transactions, and the number of countries in it is now within 9 countries.

After several countries, including Arab countries such as Egypt, Saudi Arabia and the United Arab Emirates, in addition to Ethiopia and Iran, organized in 2024, one of its main objectives is to limit the dominance of the dollar over the global trade movement and cooperation between the tax and customs authorities of the group countries and to reach the development of a new currency to be used among the group countries.

Iraq, with the aim of reorganizing the financing of foreign trade, began to conclude agreements with central banks with which Iraq has a wide trade exchange in agreement with sober correspondent banks in China, India, the UAE and Turkey to deal with the Chinese yuan, the Indian rupee, the UAE dirham and the Turkish lira to achieve two objectives. The first is to enable our banks to agree with correspondent banks in these countries and other countries to deal with them directly after canceling the electronic platform, and the second is to introduce new foreign currencies for commercial and banking transactions other than the US dollar to enable banks that do not have American correspondent banks to continue their foreign transfers with those alternative countries according to special agreements with their central banks.

This can help control the reduction of the wide domestic demand for the US dollar, create a state of balance in the monetary market and maintain the purchasing power of the local currency, which is the Iraqi dinar, and this method is now applicable, in addition to the existence of dealings in the US dollar as well.