Citizens queue at banks... and the dollar crisis is approaching a situation similar to Lebanon

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[size=52]Citizens queue at banks... and the dollar crisis is approaching a situation similar to Lebanon[/size]

[size=45]For days, citizens have been queuing in front of bank windows in order to withdraw their deposits, but they were surprised that the banks refused to hand over the amount in dollars, but rather in Iraqi currency and at the exchange rate of the Central Bank.[/size]
[size=45]While the banks are focusing on a government decision to ban the circulation of the dollar and deal in the Iraqi dinar only, what observers consider the beginning of a new economic crisis in the country.[/size]
[size=45]On Thursday, the Central Bank of Iraq confirmed that citizens’ deposits in Iraqi banks in US dollars are a guaranteed citizen’s right.[/size]
[size=45]Absence of standards[/size]
[size=45]Many citizens and businessmen in the country suffer from the absence of international standards in Iraqi banks due to the weakness of their banking systems, as they deal with banks of neighboring countries in their commercial and personal dealings due to the lack of confidence most of them have in Iraqi banks, while Iraqi citizens are forced to save money in their homes instead of in government banks. And civil society is spreading throughout the country.[/size]
[size=45]Observers confirmed that the dollar crisis and reform of the banking system cannot be achieved without controlling the currency auction due to the sale of large quantities of dollars.[/size]
[size=45]sanctions[/size]
[size=45]The Federal Reserve Bank of New York imposed stricter restrictions on international dollar transactions by Iraqi commercial banks in November 2022 in a move to curb money laundering and illegal withdrawal of dollars to Iran and other Middle Eastern countries subject to severe sanctions.[/size]
[size=45]Under the new procedures, Iraqi banks were required to submit dollar transfers on a new online platform with the Central Bank of Iraq, which is then reviewed by the Federal Reserve Bank.[/size]
[size=45]American officials explained that the regime aims to limit the use of the Iraqi banking system to smuggle dollars to Tehran, Damascus, and money laundering havens throughout the Middle East.[/size]
[size=45]Financial chaos[/size]
[size=45]Economist Dr. Ahmed Al-Husseini explains to (Al-Mada) that, “The causes of the dollar crisis are the creation of a large gap by the currency selling window between the supply of hard currency and the demand for it, even though this matter was part of a solution at that time, and I mean in the years 2007-2008.” There was an urgent need for the presence of this window (the currency auction), and it was dominated by the state, but after that very broad permissions were given to a spectrum of Iraqi society to open private banks, so the first spark of the crisis was by the currency sale window.”[/size]
[size=45]Al-Husseini adds, “There are other reasons that created this financial chaos due to the Central Bank of Iraq’s lack of control over the Iraqi banking system. Also, the controls, laws and legislation regulating the process of trading hard currency were insufficient and sufficient at the same time to control the hard currency, and all of these reasons together led to the bursting of a bubble.” The dollar.”[/size]
[size=45]“Dollarization” of the market[/size]
[size=45]Dr. Al-Husseini continues his speech to (Al-Mada): “This financial chaos necessitated the intervention of the American treasury, given that the dollar is an American currency and not an Iraqi currency, and therefore the United States of America has the right, as the exporter of this currency, to preserve its currency because its value reflects the state’s sovereignty as in the rest of the currencies of the countries.” “The other.” Pointing out, “The crisis of confidence between the Iraqi citizen and the Iraqi banking system was not born today, but rather nearly three decades ago, and because of the many wars that Iraq fought, and the instability of its political system, this was reflected in the banking reality, and these reasons are sufficient to break the Iraqi citizen’s confidence in the banking system.” "The Iraqi."[/size]
[size=45]The economist continues and says: “There is a phenomenon present in the Iraqi markets called “market dollarization,” meaning that most goods, especially durable ones such as goods, cars, electrical and medical devices, etc., are valued, sold, and bought by the citizen in dollars, even if their value is paid in Iraqi dinars, but they may It was previously valued in dollars, and this phenomenon arises from the Iraqi citizen’s weak confidence in his local currency.”Pointing out, “The solution is simply with the government, represented by the Central Bank. At the present time, it is better for the government to be the commercial agent for the merchants, through two methods. Either it opens a documentary credit at the official exchange rate, which is 1320, or it authorizes the Central Bank through The latter opened offices in the governorates through which merchants can submit their requests using receipts or documents for the goods that the merchant wants to import, and thus dealing in hard currency is restricted to the Iraqi government on the one hand, and the entry of goods that are not registered with the government through customs on the other hand, and also benefiting from the issue of Quality control and the entry of materials and goods subject to the laws of control and quality, in addition to getting rid of the platform issue or that the company must be registered. These procedures push medium and small companies to defraud the Central Bank and obtain hard currency in illegal and illegal ways.”[/size]
[size=45]Salvation through automation[/size]
[size=45]Al-Husseini concludes his speech by saying, “Any work in which a person intervenes is subject to corruption. Today, the process of automating government activity is the solution to all crises in Iraq, and we as a country are no different from other countries to achieve this goal. The presence of minds and tools such as the Internet achieves this, and this project is not difficult for people to do.” The Iraqi government, with the trillions spent through the general budget, if some of it is spent on the project to automate government activities, then we will have restricted corruption and provided services, and this is the beginning of the solution to all crises, but the biggest question remains, is there an actual national will to achieve this? Are the beneficiaries Who will allow this corruption, whether they are members of the political class or corrupt merchants?[/size]
[size=45]Decisions but[/size]
[size=45]A senior official in the Central Bank of Iraq explained that the country will ban cash withdrawals and transactions in US dollars starting from January 1, 2024, in the latest effort to limit the misuse of the country’s hard currency reserves in financial crimes and evade US sanctions on Iran.[/size]
[size=45]Economic experts show that all recent government decisions are compatible with dollar smuggling, and do not serve the citizen or the Iraqi economy. Rather, they lead to weak financial dealings between Iraq and the countries of the region and the world.[/size]
[size=45]Meanwhile, on Thursday morning, dozens of owners of banking companies organized a demonstration in front of the Central Bank of Iraq in the center of the capital, Baghdad, demanding the lifting of the penalties imposed on them for financial transactions that violate the law.[/size]
[size=45]It is noteworthy that the price of the dollar in the informal market reached 1,680 dinars per dollar, after it was 1,450 dinars before the crisis.[/size]
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