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Iraq officially stops working on the electronic platform.. Will we witness a crazy rise in the dollar?
economy 2025-01-01 | 09:04
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Alsumaria News - Economic
Today, Wednesday, the Central Bank of Iraq announced the suspension of the electronic platform mechanisms related to selling the dollar.
Governor of the Central Bank, Ammar Khalaf, said Deputy in a statement to the official agency, followed by Alsumaria News, that
“the working mechanism of the electronic platform related to foreign transfers has stopped working on it, but
financing foreign trade continues through correspondent banks according to various mechanisms that are equivalent to what is done in countries of the world.” He pointed out,
"Continuing to grant dollars to travelers at airports according to the approved mechanism, which is the best in restricting the traveler's access to dollars."
dinar’s exchange rate This decision comes as part of a series of reforms aimed at facilitating financial procedures and stimulating the economy, but at the same time it raises questions about its potential impact on the stability of the Iraqi against the US dollar .
The concept of the electronic platform and its role in currency stability
The electronic platform for money transfers is a mechanism that has been adopted to ensure the regulation of foreign cash transfers and limit manipulation of exchange rates.
The platform works to document commercial operations and money transfers by banks and financial companies, ensuring more effective control over hard currency flows inside and outside the country.
This platform has greatly contributed to reducing the gap between the official exchange rate and the black market rate, as it has prevented many money laundering and smuggling operations.
However, with the decision to cancel this platform, questions arise about how to organize the market and manage transfers.
The effect of canceling the platform on the price of the dollar
1- Increased demand for the dollar on the black market.
With the absence of an electronic platform, the demand for the dollar on the black market may increase as a result of the absence of control mechanisms, which leads to an increase in exchange rates outside official channels.
2- Weak confidence in the dinar, as
canceling the platform may weaken confidence in the Iraqi dinar, especially if effective alternatives are not developed to ensure market stability.
Weak confidence means that citizens and investors may withdraw their money in dinars and convert them to the dollar as a safe haven.
3- The impact of smuggling and money laundering, as
canceling the platform could eliminate strict control over dollar smuggling operations and smuggling and money laundering practices may expand, which would increase the demand for the dollar and affect the reserves of the Central Bank. greatly
4- The market’s dependence on supply and demand.
With the cancellation of the platform, the currency market may become more affected by direct supply and demand.
This may lead to severe fluctuations in the exchange rate, especially under unstable economic and political conditions.
Possibilities of facing a rise in the dollar
1- Activating alternative oversight tools
The government and the central bank can rely on other regulatory tools, such as strengthening the role of local banks and setting strict restrictions on foreign transfers.
2- Increase dollar reserves
The central bank may resort to pumping more dollars into the market to meet demand and maintain price stability.
3- Promoting local investments
By encouraging investment and reducing dependence on foreign currencies, pressure on the dollar can be eased and the dinar strengthened.
4-Cooperation with international organizations
The government may cooperate with international institutions such as the Monetary Fund and the World Bank to develop economic plans that contribute to market stability.
The decision to cancel the electronic platform for financial transfers represents a major challenge to the Iraqi economy, and may have direct effects on the exchange rate of the dollar against the dinar.
To achieve economic stability in the next stage, it will be necessary to take proactive measures to compensate for the absence of the platform and ensure continuity of supervision of the financial market.
The balance between facilitating economic procedures and protecting the national currency will be the decisive factor in determining the success of this decision and its effects on citizens and investors.
https://www.alsumaria.tv/news/economy/511533/العراق-يوقف-رسميا-العمل-بالمنصة-الالكترونية-هل-سنشهد-ارتفاعا-جنونيا-با
