The Prime Minister of Iraq dismissed the governor of the Central Bank at his request at a time when the exchange rate of the Iraqi dinar is undergoing unprecedented fluctuations.
Ali Mohsen Al-Alaq has been appointed to run the Central Bank by proxy, a difficult task as the price of the Iraqi dinar continues to decline, which is officially fixed at 1,470 dinars against the dollar.
According to analysts, the depreciation is mainly due to the fact that Iraq began to comply with international rules for money transfers, which affected the behavior of the dollar in the market.
Since mid-November last year, Iraqi banks have started using some international wire transfer (Swift) standards to allow Baghdad to access its US reserves.
An Iraqi prime minister’s financial adviser confirmed to AFP that Iraqi banks must now record their transfers (in dollars) on an electronic platform as the Federal Reserve reviews these requests and stops them if it has any doubts. The Iraqi prime minister’s financial adviser added that the federal government has turned down about 80% of requests for money transfers to Iraqi banks since the restrictions were put in place due to doubts about the final destination of the amounts. is transmitted.
The Iraqi authorities have taken steps including facilitating the financing of private sector dollar trade through Iraqi banks and opening foreign exchange outlets at state-owned banks for Iraqis who need it for travel.
The Iraqi Prime Minister yesterday decided on a set of additional measures to limit the fall in the exchange rate, including “opening a new window for the sale of foreign exchange to small traders through the Iraqi Trade Bank” and “funding the Central Bank of the Iraqi Trade Bank with an additional $500 million from purpose of opening documentary letters of credit. for small traders.
