The dollar crisis in Iraq.. “no change” despite the reassurances after the Istanbul meeting

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[size=52]The dollar crisis in Iraq.. “no change” despite the reassurances after the Istanbul meeting[/size]

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The value of the Iraqi currency against the dollar has decreased by up to 10 percent since the imposition of the new measures.
Despite the reassurance data published by the Central Bank of Iraq, the price of the dollar against the dinar is still higher than the official rate by a large difference, as the dollar recorded 1673 at 4 pm Sunday. The closing date of the stock exchange in Baghdad, according to currency traders who spoke to Al-Hurra.[/size]
[size=45]In an interview, Ali Hamid, director of the "Al-Rawasi" Exchange Company, said, "The price of the dollar moved up and down a few points, despite the news that it had reached the price of 1,500 against the dollar."[/size]
[size=45]And on Sunday, the central bank announced plans to “put the necessary arrangements for the first package of measures to control the exchange rate into effect, and to clarify and simplify the procedures to achieve smoothness and speed in executing dollar purchase requests.”[/size]
[size=45]The bank said that its governor, Ali Al-Alaq, confirmed “the Central Bank’s ability to meet all legitimate requests, indicating that a second important package will be issued in the middle of this month.”[/size]
[size=45]On Sunday, the governor of the Central Bank praised the new system of procedures, stressing that “the new system does not aim to restrict response to legitimate requests, as much as it aims to provide protection for the banking and financial system from illegal or suspicious operations, and supports the implementation of the law on combating money laundering and terrorist financing and related instructions.” It also strengthens the openness of the banking sector abroad, which it has been deprived of for decades.[/size]
[size=45]The central bank governor held meetings, which concluded Friday in Turkey, with US Treasury Assistant Secretary Brian Nelson.[/size]
[size=45]The bank's statement said that the US ministry announced "its support for achieving economic stability in Iraq and expressed its readiness to show the necessary flexibility to achieve common goals."[/size]
[size=45]This announcement was widely understood locally as an American agreement to grant a grace period from the restrictions of the SWIFT system for financial transfers.[/size]
[size=45]Hamid said, "The news circulated unofficially suggested that the United States agreed to grant Iraq a grace period that exempts the central bank from the procedures of the SWIFT system, which raised expectations of a decline in the dollar, but this did not materialize."[/size]
[size=45]The economic advisor to the Iraqi government, Mazhar Muhammad Salih, said, "The understandings that took place in Istanbul broke a barrier with regard to the exchange rate and was a step to achieve stability in it."[/size]
[size=45]"The first package launched by the Central Bank of Iraq in the field of facilitating transfers through the highly compliant banking system is a good start to those understandings," Saleh added to Al-Hurra.[/size]
[size=45]Saleh believes that the system will contribute to the organization of the financial sector in Iraq "well organized after years of question marks and what worries the American side about the existence of a breach of the international financial system because of the nature of transfers that have been complicated during the last twenty years."[/size]
[size=45]He added that reforming the remittance system is also "an Iraqi demand, because people want to know where their money goes."[/size]
[size=45]And he predicted that “with the passage of time, the exchange rate in the market will approach its official rate.”[/size]
[size=45]The Central Bank of Iraq had reduced the price of the dinar in December 2020 from 1182 dinars against the dollar, to 1460 dinars, in a move aimed at compensating for the decline in oil revenues at the time.[/size]
[size=45]However, since the imposition of "high compliance" measures associated with the Swift system of financial transfers, the Iraqi currency has recorded a decline against the dollar to record levels not seen since 2004.[/size]
[size=45]The price of the dollar directly affects the Iraqi trading system, which is linked to the dollar, whether through oil revenues, or through commercial exchanges that take place almost exclusively in dollars.[/size]
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