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Anticipation of new measures to contain the {dollar crisis}
Economical 2023/01/28
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Economic, financial and market observers are awaiting new measures by the Central Bank to mitigate the impact of the crisis related to the fluctuation of the dinar exchange rates against the dollar, which has negatively affected, in recent times, the rise of most commodities and goods and the decline in commercial activity.
The new central bank governor, Ali Al-Alaq, who was recently appointed to this position instead of the former director, Mustafa Ghaleb, pledged to restore the dollar exchange rate to its previous state within a short period.
The exchange rates of the dinar against the dollar are still unstable in the markets, as they gradually decreased after the appointment of a new administration for the Central Bank, and then rose again, to now range between 160-161 thousand per 100 dollars.
The economic expert, Dr. Ahmed Al-Hathal, told Al-Sabah: The exchange rate of the dollar against the dinar has reached high levels, which are the highest, due to two reductions. The internal monetary dollar after activating a new mechanism with a platform linked to the US Federal Bank and the global financial system, so the central bank should take new measures to mitigate this impact.
He pointed out that the Central Bank administration received notifications more than two years ago of the need to activate the platform to find out the truth about documentary credits and the amount of goods and services corresponding to financial transfers, due to the existence of suspicions of money laundering and the low indicators of Iraq in the anti-corruption classifications, and this poses a threat to the economy because it will collapse if mechanisms are not applied. Fix seriously.
According to Al-Hathlal, the mechanism of the foreign transfers monitoring platform serves the economy and protects the local currency cover from collapsing as a result of the high volume of transfers, but the government should work to activate more serious measures regarding corruption, overthrow smugglers and banks that receive fake invoices, and close unlicensed companies because they sell at a price. It is higher than the official exchange rate, with the difference between them reaching 11 percent, in addition to protecting social groups from the impact of the parallel exchange rate hike, because this created social problems between the creditor and the debtor as well as led to market stagnation.
Dozens of citizens demonstrated in front of the Central Bank of Iraq building in Baghdad a few days ago, to demand a reduction in the exchange rate of the dollar against the dinar, and called on the government to take urgent decisions to return the dinar to its normal price.
For his part, economist Dr. Nabil Al-Marsoumi attributed in an interview with "Al-Sabah" the continuous decline in the Iraqi dinar to the application of the electronic platform of the US Federal Bank, according to which bank transfers were subject to scrutiny and control in accordance with the new compliance rules.
He added that this mechanism is followed in the global banking system and applied in many countries, but Iraq was excluded from its application, so when it was activated, the banks were not ready for such a procedure.
Al-Marsoumi pointed out that 80 percent of bank transfers were returned by the US Federal Bank.
He continued that foreign trade in Iraq and imports is funded through bank transfers, with about 15 percent of Iraq's imports funded through documentary credits, noting that the cessation of bank transfers prompted merchants to go to exchange offices, which led to an increase in demand for dollars.
He emphasized that the dollar crisis is not in the money supply, but a remittance crisis that put pressure on the Iraqi dinar at the level it is at today.
Edited by: Ali Mouafaq
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