Baghdad Today – Baghdad
The specialist in economic affairs, Nasser Al-Tamimi, warned on Tuesday (17 December 2024) of the rise in dollar exchange rates in Iraq in the coming days.
Al-Tamimi told Baghdad Today that “there are real fears in the Iraqi market of the continuation of the rise in dollar exchange rates after the suspension of the platform by the Central Bank of Iraq,” noting that “this will be a particular shock at the beginning of the implementation of the decision and will push for the rise of the dollar, to increase demand for it in the parallel market.”
He added that “after the suspension of the platform, most of the traders, especially the small ones, will depend on the parallel market to finance their foreign trade, with the continuation of financing of trade with Iran and Turkey in dollars, in illegal ways,” pointing out that “this is what will push to rise and therefore practical steps must be taken to prevent this by the monetary authority in the country, and urgently.”
The Central Bank of Iraq revealed on Wednesday (September 4, 2024), the mechanism of ending the electronic platform for external transfers, while pointing out that the situation of external transfers and fulfilling requests on the dollar is in sound paths and in line with international practices and standards.
The bank said in a statement received by Baghdad Today that “the electronic platform for external transfers managed by the Central Bank of Iraq began at the beginning of 2023 as the first stage of reorganizing financial transfers to ensure proactive supervision over them instead of subsequent supervision through the Federal Reserve auditing daily remittances, and this was an exceptional procedure as the Fed does not usually do so, and the gradual shift towards building direct relations between banks in Iraq and correspondent and approved foreign banks was planned, in the middle of which is an international audit company to conduct pre-audit of remittances before their implementation by correspondent banks.”
He added that “during the year 2024 and until now, 95% of the transfer process has been achieved from the electronic platform to the mechanism of correspondent banks directly between them and Iraqi banks, which means that the remaining is only about 5% of them within the platform, which will be completed with the same mechanism before the end of this year and according to the plan,” explaining that “some expectations about possible effects on the exchange rate and transfers are unfounded, because the process will not be suddenly or in one batch at the end of this year, but it was already achieved during the past period with an effort and careful follow-up, except for the remaining of a small percentage that will be completed in the next few period.”
He stressed that “trade with the United Arab Emirates, Turkey, India and China represents about 70% of Iraq’s foreign traders as (imports), which called on the Central Bank of Iraq to find channels for transfer in euro currencies, Chinese yuan, Indian rupee, UAE dirham, through accredited correspondent banks in those countries, and (13) Iraqi banks have already started transferring operations with the pre-audit mechanism that was agreed and approved in addition to transfers in dollar currency.”
He continued: “With the provision of personal transfer channels for legitimate purposes and external purchases through electronic payment channels, international money transfer companies, cash sale to travelers, and the payment of dollar cash for incoming transfers to the entities and purposes specified in the published instructions of the Central Bank.”
The Central Bank of Iraq stressed that it “put foreign transfer operations and meeting demands for the dollar in sound paths in line with international practices and standards and the Law on Combating Money Laundering and Terrorist Financing,” explaining that “the provision of the mentioned channels and for all purposes at the official price of the dollar, makes this price the real indicator of economic practices, which is proven by the reality of price stability and the control of inflation, and any other price traded outside those channels is a anomalous price that resorts of those who are fundamentalist or illegal practices who move away from official channels in their dealings, bearing alone the additional costs of buying higher than the official price of others with the difference between the official price and others.”
