Experts: the central bank should follow up Iraqi banks and clean them of illegal work
November 16, 2022
Economist Safwan Qusai said on Tuesday that the Central Bank of Iraq should review the performance and transactions of a number of Iraqi banks and prove their cleanliness from currency smuggling and money laundering operations.
Qusai said in an interview with the journal,
”if it is proven that these banks are involved in smuggling and money laundering operations, they should be placed under the guardianship of the Iraqi central and cleaned of suspicion, and then resume activity after the lifting of guardianship". He continued,
”the US Treasury is trying to ensure that all funds coming out and entering from and to Iraq are legitimate, and
this is the relationship of the Iraqi central bank with the Federal Bank,“ he noted,
”Iraqi private banks should comply with the Central Bank of Iraq, as it represents the first obstacle to the US Treasury so as not to be affected by US Treasury sanctions.
The “journal " published a report yesterday on a new decision that the US Federal Bank would like to issue against some Iraqi banks
In an economic step that is the first of its kind in Iraq in years, the US Federal Bank stops financial transfers to 14 Iraqi banks and opens an investigation into the files of these banks, in preparation for their inclusion in the blacklist.
The US Federal Reserve's decision to stop financial transfers with Iraqi banks came as a result of accusing these banks of smuggling money from the currency auction illegally.
An informed source said in an interview to the Journal,
“the US Federal Bank issued its decision to stop financial transfers to 14 Iraqi banks, on charges of smuggling money from the currency auction (affiliated to the central bank), to countries under US sanctions, without revealing the source of the name of these banks.
“The Federal Bank has opened an investigation into the records of these banks, and this will entail the imposition of greater and broader sanctions, including the inclusion of these banks in the Black List and the work with them will end,” he added.
The penalty for blacklisting provides for the suspension and punishment of all financial transactions between the US financial system and the listed bank.
These sanctions came less than a month after Mohammed Shiaa al-Sudani received the presidency of the new government and pledged to work to put the Iraqi economy on the right track.
The Iraqi market witnessed, on Tuesday, speculation in the dollar exchange rate, as it recorded today 148,500 Iraqi dinars against 100 US dollars, noting that the official quotation from the Bank of Iraq is 1450 dinars per one US dollar.
The dollar exchange rate has risen to record levels, with a difference of 3,500 dinars from the official real rate from the central bank, and
this benefits speculators from the owners of banking companies, who today started buying only dollars and not selling.
The Iraqi economy is suffering from significant economic inflation due to
financial market instability,
high rates of corruption and
which created a kind of distrust among Iraqi citizens, and that the
Journal could get statements from the Central Bank of Iraq on the subject, which witnessed the suspension of dollar transactions with four of its largest banks this month for the same reasons.