Here's the Deal with Iraq's IQD and the US Dollar Beginning January 1, 2024

 

The situation regarding the use of dinars in Iraq can be confusing, and it's understandable to feel mixed messages. Here's what we know:

Iraq's Requirement for Dinar Transactions:

• Yes, the Iraqi government has mandated that all domestic financial transactions within Iraq must be conducted in Iraqi dinars (IQD) starting January 1, 2024. This applies to purchases, sales, and other financial activities within the country's borders.
• The goal is to promote the use of the national currency, strengthen the Iraqi economy, and reduce dependence on foreign currencies.

US/IMF Involvement and Dollar Availability:

• Ongoing discussions between the Iraqi government, the US, and the International Monetary Fund (IMF) are focused on stabilizing the Iraqi economy and improving its financial system. These discussions might involve issues like foreign exchange controls and access to dollars.
• Currently, it's unclear how these discussions will impact the future availability of US dollars in Iraq. While the central bank may make some dollars available for specific purposes, a full-fledged open market for dollars wouldn't necessarily negate the requirement for dinar use in domestic transactions.

Possible Scenarios:

• Strict Dinar Policy: The government might strictly enforce the dinar requirement, with limited access to dollars except for specific authorized transactions. This could potentially create challenges for some businesses and individuals relying on dollars.
• Modified Approach: The discussions with the US/IMF could lead to a more flexible approach, allowing for some dollar transactions alongside the mandatory use of dinars for everyday activities.

What's Uncertain:

• The exact details of the dollar availability and how it will interact with the dinar requirement are still unclear. We must wait for further information or official announcements from the Iraqi government or the IMF.
• The practical implementation of the policy, including potential enforcement mechanisms and exemptions, remains to be seen.

Overall:

• The requirement for dinar use in domestic transactions is confirmed and will be effective on January 1, 2024.
• The discussions with the US/IMF might eventually influence the availability of dollars in Iraq, but the exact impact on the dinar policy is still uncertain.

I hope this clarifies the situation a bit. It's important to stay updated on official pronouncements from the Iraqi government and international organizations involved to get the latest information as the situation unfolds.  The channel and the blog will keep you updated.

Here's what we think we know: 

In January 2024, foreign currencies will no longer be allowed inside Iraq, and any violations will be criminalized.

The national currency will be used for all transactions.

The Iraqi petrodollars are deposited in a bank supervised by the US Federal Reserve, so the Iraqi people can spend their money under strict US government supervision.

In 2023, the Central Bank of Iraq reduced the daily distribution of dollars to $48 million by restricting the distribution of foreign currency.

A bilateral agreement has been signed between Iraq, Turkey, and the United Arab Emirates (UAE) for trade exchanges using their national currencies.