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The Iraqi dinar pays the price.. Washington cuts off the dollar smuggling route to Iran
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2023-01-20 01:30
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Shafaq News/ The Iraqi dinar continues to pay the price, by faltering against the dollar, and perhaps the most prominent reason lies in the noticeable change by the US Treasury and the Federal Reserve Bank of New York towards monetary policy in Iraq, due to currency smuggling operations to Iran, which is suffering from severe economic sanctions for years.
The American newspaper "The Wall Street Journal", shed light on the currency file in Iraq, in a report translated by Shafak News agency, indicating that the Iraqi economy is suffering from faltering with the decline in the value of the dinar by 10% against the dollar, which led to an increase in food prices.
American procedure
And the American newspaper stated, in its report, that "American and Iraqi officials say that the stricter controls imposed by the Federal Reserve Bank in New York regarding dollar transactions by Iraqi banks last November are a step aimed at reducing money laundering and illegal smuggling of dollars to Iraq.” Iran and other countries in the Middle East are subject to severe sanctions.
She added, "Successive US administrations have postponed the entry of the Iraqi banking system into global money transfer mechanisms so far, due to the years of weak governments in Iraq and the crises represented by the rebellion during the US occupation, leading to the control of ISIS over large parts of the country.”
According to US and Iraqi officials and official data, since the introduction of the new measures, 80% or more of daily dollar transfers to Iraq, which previously totaled more than $250 million on some days, have been blocked for reasons including insufficient information. The destination of this money or because of other errors.
The American newspaper pointed out that "in light of the scarcity in the availability of the dollar, the Iraqi dinar fell by up to 10% against the dollar, which caused a strong rise in the prices of imported goods, including basic commodities such as eggs." , flour and cooking oil.”
shock policy
The “Wall Street Journal” report quoted the Chairman of the Board of Directors of the Southern Islamic Bank, Mahmoud Dagher (a former official in the Central Bank of Iraq), as saying, “For 20 years, we have been following the same system , but the shock policy pursued by the Federal Reserve created a crisis within the economy. Iraqi.”
The report pointed out that this turmoil reflects the cautious and overlapping relations between Washington and Baghdad, recalling that since the United States contributed to the establishment of the Central Bank of Iraq in 2004, the US dollar has turned to being the main currency of the country to a large extent because a large part of the Iraqi economy operates on cash.
And the report continued that in order to provide Iraq with dollars, planes transport shipments of US currency to Baghdad every few months, indicating that additional dollars flow electronically through transactions carried out by Iraqi banks, which are withdrawn from official Iraqi accounts in the Federal Reserve Bank in New York, where proceeds from oil sales are deposited.
And US officials acknowledged that "the strict rules for electronic dollar transfers by Iraqi banks were not a surprise to officials in Baghdad, explaining that they were implemented jointly last November, after two years of discussion and planning by the Central Bank of Iraq, the US Treasury and the Reserve Bank." The Federal Reserve, stressing that "the increase in the exchange rate of the dollar was not due to the new measures."
And the American newspaper noted, that "auditing dollar transactions caused a demand for dollars in Iraq and a wave of criticism by Iraqi officials, bankers and importers who criticize the new system because it caused an unnecessary financial shock and contributed to the exacerbation of their severe economic problems."
The new "platform" system
She explained, "According to the new procedures applied, banks must submit requests for dollar transfers through a new electronic platform with the central bank, and then the Federal Reserve Bank of New York reviews them."
The report quoted US officials as saying that this system "aims to limit the use of the Iraqi banking system to smuggle dollars to Tehran, Damascus and safe havens for money laundering throughout the Middle East."
The report quoted Dagher as saying that "under the old rules, it was not obligatory for Iraqi bank account holders to disclose the party to which they send money until after the dollars have already been transferred."
The report quoted a spokeswoman for the Federal Reserve Bank of New York as saying, referring to bank accounts belonging to foreign governments that fall under its control, similar to Iraqi accounts, as saying, “We have a strong compliance system for these accounts that evolve over time in response to new information.”
The report also quoted a US official as saying that these measures would reduce "the ability of malicious actors to use the Iraqi banking system."
The report pointed out that both the US Treasury and the Central Bank of Iraq declined to comment, but the Central Bank of Iraq described the new electronic platform in a statement issued on December 15, noting that it requires providing “full details about customers who want.” to transfer money.” Including who are the ultimate beneficiaries, adding that "a number of errors are discovered and what is required of the banks is to repeat the process," noting that these procedures will require additional time before approval is obtained and passed by the international mechanism. .
According to Iraqi officials and judicial documents, the central bank prevented four banks, including the Islamic Bank of Asia and the Iraqi Middle East Bank, from carrying out any transactions in dollars.
The report pointed out that US officials have been exerting pressure on Iraq for years in order to strengthen its banking controls, noting, quoting US officials at the time, that the Federal Reserve Bank and the Treasury Department temporarily stopped in 2015 the flow of billions of dollars dollars to the Central Bank of Iraq because of their fears of The dollars were on their way to Iranian banks and may be transferred to ISIS militants.
The report indicated that some Iraqi officials support strengthening the oversight of Iraqi banks, and in this context, MP Hadi al-Salami, a member of the Anti-Corruption Commission, was quoted as saying that political parties and militias control most banks and use them to smuggle dollars to neighboring countries, adding, "We need this to stop immediately."
And the American newspaper considered, in its report, that the impact of the new controls can be seen in the sharp decline in bank transactions in dollars, which the Central Bank tracks on its website, adding that on October 17 of last year, that is , before the entry into force of the new controls, Daily transfers from Iraq's official accounts at the Federal Reserve Bank of New York and other external institutions amounted to $224.4 million, while on January 17, it amounted to $22.9 million, which is equivalent to a decline of 90%.
And while US officials say, according to the "Wall Street Journal", that this financial confusion will ease with the compliance of Iraqi account holders with the new controls, the newspaper pointed out that "Iraqi bankers and merchants consider that the new rules aim to stop the schemes used to steal dollars."
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[You must be registered and logged in to see this image.]
2023-01-20 01:30
Share
Font
Shafaq News/ The Iraqi dinar continues to pay the price, by faltering against the dollar, and perhaps the most prominent reason lies in the noticeable change by the US Treasury and the Federal Reserve Bank of New York towards monetary policy in Iraq, due to currency smuggling operations to Iran, which is suffering from severe economic sanctions for years.
The American newspaper "The Wall Street Journal", shed light on the currency file in Iraq, in a report translated by Shafak News agency, indicating that the Iraqi economy is suffering from faltering with the decline in the value of the dinar by 10% against the dollar, which led to an increase in food prices.
American procedure
And the American newspaper stated, in its report, that "American and Iraqi officials say that the stricter controls imposed by the Federal Reserve Bank in New York regarding dollar transactions by Iraqi banks last November are a step aimed at reducing money laundering and illegal smuggling of dollars to Iraq.” Iran and other countries in the Middle East are subject to severe sanctions.
She added, "Successive US administrations have postponed the entry of the Iraqi banking system into global money transfer mechanisms so far, due to the years of weak governments in Iraq and the crises represented by the rebellion during the US occupation, leading to the control of ISIS over large parts of the country.”
According to US and Iraqi officials and official data, since the introduction of the new measures, 80% or more of daily dollar transfers to Iraq, which previously totaled more than $250 million on some days, have been blocked for reasons including insufficient information. The destination of this money or because of other errors.
The American newspaper pointed out that "in light of the scarcity in the availability of the dollar, the Iraqi dinar fell by up to 10% against the dollar, which caused a strong rise in the prices of imported goods, including basic commodities such as eggs." , flour and cooking oil.”
shock policy
The “Wall Street Journal” report quoted the Chairman of the Board of Directors of the Southern Islamic Bank, Mahmoud Dagher (a former official in the Central Bank of Iraq), as saying, “For 20 years, we have been following the same system , but the shock policy pursued by the Federal Reserve created a crisis within the economy. Iraqi.”
The report pointed out that this turmoil reflects the cautious and overlapping relations between Washington and Baghdad, recalling that since the United States contributed to the establishment of the Central Bank of Iraq in 2004, the US dollar has turned to being the main currency of the country to a large extent because a large part of the Iraqi economy operates on cash.
And the report continued that in order to provide Iraq with dollars, planes transport shipments of US currency to Baghdad every few months, indicating that additional dollars flow electronically through transactions carried out by Iraqi banks, which are withdrawn from official Iraqi accounts in the Federal Reserve Bank in New York, where proceeds from oil sales are deposited.
And US officials acknowledged that "the strict rules for electronic dollar transfers by Iraqi banks were not a surprise to officials in Baghdad, explaining that they were implemented jointly last November, after two years of discussion and planning by the Central Bank of Iraq, the US Treasury and the Reserve Bank." The Federal Reserve, stressing that "the increase in the exchange rate of the dollar was not due to the new measures."
And the American newspaper noted, that "auditing dollar transactions caused a demand for dollars in Iraq and a wave of criticism by Iraqi officials, bankers and importers who criticize the new system because it caused an unnecessary financial shock and contributed to the exacerbation of their severe economic problems."
The new "platform" system
She explained, "According to the new procedures applied, banks must submit requests for dollar transfers through a new electronic platform with the central bank, and then the Federal Reserve Bank of New York reviews them."
The report quoted US officials as saying that this system "aims to limit the use of the Iraqi banking system to smuggle dollars to Tehran, Damascus and safe havens for money laundering throughout the Middle East."
The report quoted Dagher as saying that "under the old rules, it was not obligatory for Iraqi bank account holders to disclose the party to which they send money until after the dollars have already been transferred."
The report quoted a spokeswoman for the Federal Reserve Bank of New York as saying, referring to bank accounts belonging to foreign governments that fall under its control, similar to Iraqi accounts, as saying, “We have a strong compliance system for these accounts that evolve over time in response to new information.”
The report also quoted a US official as saying that these measures would reduce "the ability of malicious actors to use the Iraqi banking system."
The report pointed out that both the US Treasury and the Central Bank of Iraq declined to comment, but the Central Bank of Iraq described the new electronic platform in a statement issued on December 15, noting that it requires providing “full details about customers who want.” to transfer money.” Including who are the ultimate beneficiaries, adding that "a number of errors are discovered and what is required of the banks is to repeat the process," noting that these procedures will require additional time before approval is obtained and passed by the international mechanism. .
According to Iraqi officials and judicial documents, the central bank prevented four banks, including the Islamic Bank of Asia and the Iraqi Middle East Bank, from carrying out any transactions in dollars.
The report pointed out that US officials have been exerting pressure on Iraq for years in order to strengthen its banking controls, noting, quoting US officials at the time, that the Federal Reserve Bank and the Treasury Department temporarily stopped in 2015 the flow of billions of dollars dollars to the Central Bank of Iraq because of their fears of The dollars were on their way to Iranian banks and may be transferred to ISIS militants.
The report indicated that some Iraqi officials support strengthening the oversight of Iraqi banks, and in this context, MP Hadi al-Salami, a member of the Anti-Corruption Commission, was quoted as saying that political parties and militias control most banks and use them to smuggle dollars to neighboring countries, adding, "We need this to stop immediately."
And the American newspaper considered, in its report, that the impact of the new controls can be seen in the sharp decline in bank transactions in dollars, which the Central Bank tracks on its website, adding that on October 17 of last year, that is , before the entry into force of the new controls, Daily transfers from Iraq's official accounts at the Federal Reserve Bank of New York and other external institutions amounted to $224.4 million, while on January 17, it amounted to $22.9 million, which is equivalent to a decline of 90%.
And while US officials say, according to the "Wall Street Journal", that this financial confusion will ease with the compliance of Iraqi account holders with the new controls, the newspaper pointed out that "Iraqi bankers and merchants consider that the new rules aim to stop the schemes used to steal dollars."
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