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French report: Dollar restrictions confuse the lives of Iraqis due to “monetary sovereignty”
Economy Iraq U.S. dollar Iraqi dinar Cash transfers
2023-12-17 07:02
Shafaq News/ A French report highlighted the deficit in Iraqi citizens’ withdrawals of money transferred to them from outside the country, months ago, because it was sent to them in US dollars, after the authorities imposed new restrictions that complicate the use of hard currencies, in their efforts to control a black market for the exchange rate.
This is a measure considered paradoxical in a country rich in oil, which has huge hard currency reserves exceeding one hundred billion.
According to a report published by Agence France-Presse, and seen by Shafaq News Agency,
the emergence of a parallel exchange market, and the authorities’ imposition of restrictions within the framework of strengthening banking supervision in compliance with international rules imposed by Washington, have complicated the daily lives of residents.
The official exchange rate is 1,320 dinars to one dollar,
but among money changers, the price of one dollar is equal to 1,500 dinars and may reach 1,600.
Currency exchange offices have become very cautious with customers, after the arrest of dozens of money changers accused of manipulating prices, according to the report.
The Central Bank of Iraq announced in a previous statement that it had decided, as of January, “to limit all commercial and other transactions to the Iraqi dinar instead of the dollar.” in the country.
"Monetary Sovereignty"
While the dollar can be withdrawn in cash from previously existing deposits in hard currency naturally, starting in 2024, it will become necessary to withdraw every money transfer from abroad in dinars exclusively, and according to the official exchange rate.
The Prime Minister’s Advisor for Financial Affairs, Mazhar Saleh, confirms that
“this is the rule that is part of monetary sovereignty, but there are exceptions,” which especially include embassies. He adds:
“We are strengthening what is called monetary sovereignty...it is not possible to deal with two currencies within the national economy.”
However, these restrictions raise controversy and hinder the daily life of Iraqis, according to Agence France-Presse.
Direct transfers outside banks have become impossible in dollars, and are limited to dinars at the official rate.
The banking sector in Iraq has also adopted an electronic platform, the aim of which is to monitor the uses of the dollar and tighten control over a thriving informal economy, while tax evasion attracts some importers and traders.
The Prime Minister, Muhammad Shiaa Al-Sudani, acknowledged that with the new measures, the cash supply in hard currency available in the market decreased from “200 to 300 million dollars.” per day to “30, 40 and 50 million dollars.”
Last September, Al-Sudani said that merchants who deal with Iran are forced to turn to the parallel market to obtain currency, given that Iran is a country “that has sanctions and is not allowed to conduct financial transfers.”
At the same time, he confirmed that the central banks in Iraq and Iran are discussing a “mechanism” In order to “regulate trade”, it would “break the back of the parallel market”.
"Suspicious trade"
Late last November, the government announced facilities to encourage importers of cigarettes, cars, gold, and mobile phones to obtain foreign currency through official channels.
As for bilateral exchanges, the authorities encourage banks and importers to use currencies other than the dollar, such as the euro, the UAE dirham, or the Chinese yuan.
The Prime Minister’s advisor, Mazhar Salih, defended the banking restrictions aimed at “verifying these transfers,” with the aim of reassuring “the international financial community, and also for reasons related to Iraqi society: Do these transfers actually go to finance Iraq’s trade?” Saleh added:
“What is happening has nothing to do with the strength of the Iraqi economy. Iraq today is at the highest levels of foreign reserves in its financial history.” Rather, “structural changes have occurred in issues of dealing with foreign currency.” He also mentioned that
in order to protect the country with a population of 43 million people from inflation, importers have access to the dollar and buy it at the official rate, which is more beneficial.
This concerns especially foodstuffs, medicines and building materials.
Saleh believes that this “creates an atmosphere of stability, which is contrary to the parallel market.”
https://shafaq.com/ar/اقتصـاد/تقرير-فرنسي-قيود-الدولار-تربك-حياة-العراقيين-بسبب-السيادة-النقدية
Economy Iraq U.S. dollar Iraqi dinar Cash transfers
2023-12-17 07:02
Shafaq News/ A French report highlighted the deficit in Iraqi citizens’ withdrawals of money transferred to them from outside the country, months ago, because it was sent to them in US dollars, after the authorities imposed new restrictions that complicate the use of hard currencies, in their efforts to control a black market for the exchange rate.
This is a measure considered paradoxical in a country rich in oil, which has huge hard currency reserves exceeding one hundred billion.
According to a report published by Agence France-Presse, and seen by Shafaq News Agency,
the emergence of a parallel exchange market, and the authorities’ imposition of restrictions within the framework of strengthening banking supervision in compliance with international rules imposed by Washington, have complicated the daily lives of residents.
The official exchange rate is 1,320 dinars to one dollar,
but among money changers, the price of one dollar is equal to 1,500 dinars and may reach 1,600.
Currency exchange offices have become very cautious with customers, after the arrest of dozens of money changers accused of manipulating prices, according to the report.
The Central Bank of Iraq announced in a previous statement that it had decided, as of January, “to limit all commercial and other transactions to the Iraqi dinar instead of the dollar.” in the country.
"Monetary Sovereignty"
While the dollar can be withdrawn in cash from previously existing deposits in hard currency naturally, starting in 2024, it will become necessary to withdraw every money transfer from abroad in dinars exclusively, and according to the official exchange rate.
The Prime Minister’s Advisor for Financial Affairs, Mazhar Saleh, confirms that
“this is the rule that is part of monetary sovereignty, but there are exceptions,” which especially include embassies. He adds:
“We are strengthening what is called monetary sovereignty...it is not possible to deal with two currencies within the national economy.”
However, these restrictions raise controversy and hinder the daily life of Iraqis, according to Agence France-Presse.
Direct transfers outside banks have become impossible in dollars, and are limited to dinars at the official rate.
The banking sector in Iraq has also adopted an electronic platform, the aim of which is to monitor the uses of the dollar and tighten control over a thriving informal economy, while tax evasion attracts some importers and traders.
The Prime Minister, Muhammad Shiaa Al-Sudani, acknowledged that with the new measures, the cash supply in hard currency available in the market decreased from “200 to 300 million dollars.” per day to “30, 40 and 50 million dollars.”
Last September, Al-Sudani said that merchants who deal with Iran are forced to turn to the parallel market to obtain currency, given that Iran is a country “that has sanctions and is not allowed to conduct financial transfers.”
At the same time, he confirmed that the central banks in Iraq and Iran are discussing a “mechanism” In order to “regulate trade”, it would “break the back of the parallel market”.
"Suspicious trade"
Late last November, the government announced facilities to encourage importers of cigarettes, cars, gold, and mobile phones to obtain foreign currency through official channels.
As for bilateral exchanges, the authorities encourage banks and importers to use currencies other than the dollar, such as the euro, the UAE dirham, or the Chinese yuan.
The Prime Minister’s advisor, Mazhar Salih, defended the banking restrictions aimed at “verifying these transfers,” with the aim of reassuring “the international financial community, and also for reasons related to Iraqi society: Do these transfers actually go to finance Iraq’s trade?” Saleh added:
“What is happening has nothing to do with the strength of the Iraqi economy. Iraq today is at the highest levels of foreign reserves in its financial history.” Rather, “structural changes have occurred in issues of dealing with foreign currency.” He also mentioned that
in order to protect the country with a population of 43 million people from inflation, importers have access to the dollar and buy it at the official rate, which is more beneficial.
This concerns especially foodstuffs, medicines and building materials.
Saleh believes that this “creates an atmosphere of stability, which is contrary to the parallel market.”
https://shafaq.com/ar/اقتصـاد/تقرير-فرنسي-قيود-الدولار-تربك-حياة-العراقيين-بسبب-السيادة-النقدية
