CENTRAL BANK GOVERNOR: ACTIVITIES OF SANCTIONED IRAQI BANKS CONTINUE IN ALL CURRENCIES EXCEPT THE DOLLAR
(These articles are just repeating the same over and over with different headings from different news channels.)
The Governor of the Central Bank of Iraq, Mohsen Al-Alaq, confirmed today, Saturday, the reduction of reliance on the US dollar in commercial transactions, adding that the project to delete zeros in Iraq is subject to continuous review and study in the bank.
Countries remove zeros from their currency to revalue their national currency and simplify financial transactions. This is done by removing a specific number of zeros from the nominal value of the currency, making it appear less inflationary and more stable.
Al-Alaq said, in an extensive interview with Al Jazeera Net, which was followed by “Iraq Observer”, that “the Central Bank responded to global economic challenges, such as rising energy and raw material prices, by amending some monetary policies in line with the international situation and to enhance confidence in the Iraqi dinar and prevent a sharp decline in its value.”
He added, “The Central Bank of Iraq has increased its holdings of foreign exchange and gold reserves to strengthen the country’s financial position and financial stability in order to enhance its ability to confront potential economic crises. ”
Regarding the steps taken to address the dollar’s rising crisis, Al-Alaq said, “The Central Bank of Iraq has created new mechanisms to cover local banks’ accounts with their senders in other currencies (Chinese yuan, Indian rupee, euro, and UAE dirham) in addition to the dollar, which has reduced reliance on the US currency in commercial transactions for these banks’ clients, while the Central Bank seeks to withdraw excess liquidity in the economy that puts pressure on the exchange rate and to prevent the exported currency from growing in an undesirable manner.”
Regarding the country’s foreign reserves, the Central Bank Governor explained that “foreign exchange reserves are the tool used by all central banks to maintain the stability of the local currency exchange rate against foreign currencies, as well as to reduce exposure to external crises by maintaining liquidity in foreign currency to absorb shocks in times of crisis.”
“According to the latest data on the level of foreign reserves adequacy, the Central Bank of Iraq’s foreign reserves cover 83.62% of the broad money supply, i.e. covering the cost of importing 15 months, while the global standard rate is 20%, covering 6 months of importing,” according to Al-Alaq.
He pointed out that “the sanctions imposed on banks are related to the decision to ban dealing in dollars, as the banks were not included in the sanctions list issued by the Office of Foreign Assets Control, and therefore the banks’ activities continue, according to the applicable procedures and in all currencies except the dollar.”
Regarding the situation of the Iraqi banking sector, Al-Alaq said that it “is experiencing a state of stability, as government banks still control approximately 79% of the assets of the total banking sector, compared to 21% for private banks.
