💢💢💢IQD RV 💢💢💢
The de-dollarization process in Iraq has advanced significantly since early 2024, with the Central Bank of Iraq (CBI) implementing a series of measures to reduce dependence on the US dollar in the national economy.
🏦 Restrictions on dollar transactions
Since January 1, 2024, Iraq has banned cash withdrawals of US dollars. This measure seeks to combat the illicit use of the country's currency reserves and prevent the evasion of international sanctions, especially towards Iran. It is estimated that up to 50% of the $10 billion that Iraq imports annually in cash from the New York Federal Reserve was misused.
💱 Internal transactions in dinars
Furthermore, the CBI has established that all domestic commercial transactions must be carried out in Iraqi dinars, with the exception of those intended for travelers. This policy aims to control the general price level and reduce inflation, which has been a key indicator of the effectiveness of monetary policy.
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🏦 Restrictions on banks and payment signatures
In February 2025, the CBI banned five local banks from carrying out transactions in US dollars, as part of efforts to combat money laundering and dollar smuggling. These restrictions also applied to three payment services companies.
Reuters
📉 Official exchange rate vs. parallel market
Despite these measures, the exchange rate of the Iraqi dinar against the US dollar in the parallel market remains above the official exchange rate. This indicates that, although the CBI policies have had some impact, challenges still remain in the effective implementation of de-dollarization.
In summary, Iraq has taken significant steps toward dedollarization, but continues to face challenges in implementing these policies.