BREAKING NEWS 3/27/24 The Central Bank of Iraq Says Regulated Dollar Transactions Are Rising - Black Market Up to 1,470 Dinars

 

Many foreign trade transactions now take place through the Central Bank of Iraq's electronic platform (AHMAD AL-RUBAYE).

According to a central bank vice governor, Iraq has increased overseas dollar transactions through the official SWIFT system as a result of a booming currency black market.

Baghdad has imposed restrictions on the use of American dollars on the domestic market since dollars dominate the country's economy.

As part of the reforms, the country's banking sector adopted the international financial messaging system SWIFT at the end of 2022, helping to combat money laundering.

Iraq has a foreign currency reserve of more than $100 billion (92 billion euros), making it easy to buy dollars. The demand for foreign currencies has increased, however, due to tax evasion, the black market, and dollar smuggling to countries and entities under United States sanctions, mainly Iran.

The Central Bank's electronic platform, which ensures SWIFT compliance, has seen a significant increase in transactions, vice governor Ammar Khalaf told AFP.

The platform is now used for a large number of foreign trade transactions, he said.

According to him, at the beginning of 2023, transactions were $50 million per day. Now, they are around $200 million, which is in line with the size of Iraq's economy.

To access dollar reserves in the United States, Iraqi banks must use the electronic system. The US Federal Reserve will examine the requests and block them if it finds anything suspicious.

According to Khalaf, rejections have decreased recently because banks understand international requirements and traders know what to do to transfer money.

There is still a thriving black market, however.

According to the government, the dinar is worth 1,320 dinars to the dollar. On unofficial markets, it's worth 1,470 dinars.

Iran also exerts considerable political influence in Baghdad, where its Iraqi allies dominate parliament and support the current government.

Mohamed Shia al-Sudani admitted last year that sanctions preventing dollar transfers to Iranian banks drove Iraqi traders to the black market.

In late November, the government announced steps to encourage importers of goods such as cigarettes, cars, gold, and mobile phones to obtain dollars through official channels.

According to US sanctions and money laundering regulations, more than 20 Iraqi banks have been prohibited from conducting dollar transactions.

We are in constant contact with the American Treasury in an attempt to lift the ban, Khalaf said, hoping for a positive outcome.

Banished banks cannot deal in dollars, but they can operate locally.

News Origination Yahoo News