British report: the lack of availability of the dollar reflects the weakness of the Iraqi economy

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[size=52]British report: the lack of availability of the dollar reflects the weakness of the Iraqi economy[/size]

[size=45]Translated by: Hamed Ahmed[/size]
[size=45]A British report confirmed that the Central Bank of Iraq's actions led to unintended results, pointing out that the most prominent of which was an acute shortage of dollar supply in the local markets.[/size]
[size=45]A report by the British newspaper (Financial Times), translated by (Al-Mada), stated that “Iraq is striving to control a disturbing currency crisis that has occupied the country for months, revealing the fragility of its oil-dependent economy over the 20 years since the American invasion of the country.” The report added, “Ali Mohsen Al-Alaq, the new governor of the Central Bank, defended the measures that were introduced in order to stabilize the monetary crisis that led to an acute shortage of the dollar currency and also a sharp decline in the dinar.”[/size]
[size=45]He pointed out, “Al-Alaq said in an interview: We focused on finding a solution to the root of the problem and we saw some positive indicators.”[/size]
[size=45]Al-Alaq talked about “the efforts of the Central Bank and the government to alleviate this situation, which has remained stuck since the start of the crisis in November.”[/size]
[size=45]And Al-Alaq stressed, “This was when the Iraqi authorities, in cooperation with the United States, implemented strict provisions for banks as part of attempts to curb money laundering and smuggling of hard currency abroad.”[/size]
[size=45]And the report stated, “This package of measures led to unintended consequences, including an acute shortage in the provision of the dollar currency in an economic environment in which the American currency is preferred, which led to inflation and created difficulties for Iraqis who do not trust their institutions or their own currency.”[/size]
[size=45]And he indicated that “Hamudi Ismail, 27 years old, a self-employed business owner, said that he is having difficulty obtaining 4,300 dollars in order to pay the rent and pay the costs of goods he wants to buy, and he said: The owner of the house refuses to receive the rent amount in dinars, and I spent several days this week I'm trying to get a dollar."[/size]
[size=45]The report emphasized that "Iraq's vulnerable economy is almost entirely dependent on fluctuations in global oil market prices."[/size]
[size=45]And he continues, “Record oil prices filled the treasury funds of the second largest oil producer in OPEC with more than $100 billion.”[/size]
[size=45]The report added, however, that “Baghdad cannot access the money except through the US Federal Reserve Bank, which has deposited Iraq’s hard currency reserves since 2003.”[/size]
[size=45]He added, "The Central Bank of Iraq submits a request to the Federal Bank to obtain its dollar balances and then sells them to merchants, private banks, and exchange offices in exchange for the dinar, through what is known as the daily currency auction for the dollar."[/size]
[size=45]And the report goes on, “American and Iraqi officials have for a long time complained that a massive fraud and forgery operation allowed the smuggling of huge sums of money out of the country, with part of these dollars ending up in the hands of armed groups in Iran, Syria and Lebanon that are included in the US sanctions.”[/size]
[size=45]"Unfortunately we have noticed an increasing number of suspicious money transfers, huge amounts of money transfers leaving the country in a clear fraudulent manner," said David Berger, a senior US official in Baghdad.[/size]
[size=45]And the report went, that "these concerns were renewed last year after the theft of $ 2.5 billion from tax secretariats in Iraqi dinars, and part of these amounts were used to buy dollars through the currency auction."[/size]
[size=45]He added, "The Central Bank, by adopting the electronic platform for money transfers that contains information about the sender and receiver of money, some of the banks and merchants do not want to include detailed information about the beneficiary, while others were slow to adapt to these provisions."[/size]
[size=45]And the report added, “With the rejection of many requests for money transfers from Iraqi accounts by the Federal Bank, this has led to a decrease in supplying the Iraqi market with the dollar currency.”[/size]
[size=45]He explained, "Central Bank information shows a decrease in the volume of financial transfers from an average of $180 million per day during the year 2022 to approximately $65 to $75 million during this year."[/size]
[size=45]Al-Alaq goes back to saying, “There are indicators of progress, and we notice a daily increase in the number of money transfers on the digital platform, just as we have begun to notice an increase in the number of Iraqi merchants who apply to officially register to participate.”[/size]
[size=45]However, the report stated, "Experts warn that this process may take many months before Iraqi banks fully adapt to it, and years for the country's economy to move away entirely from the formal formula that relies on cash."[/size]
[size=45]He pointed out, "Introducing another method that allows travelers to buy up to 7 thousand dollars at airports to use when they travel."[/size]
[size=45]And the report stated, “This method prompted people to book airline tickets simply because they obtained dollars, and then they sold them on the black market.”[/size]
[size=45]And he quotes, according to “an airline employee at Baghdad airport, saying: We have witnessed for weeks the sale of airline tickets to Amman or Beirut, as they have all sold out, but the planes are empty of passengers.”[/size]
[size=45]The report emphasized, “This loophole was narrowed last week by making the maximum allowable amount only two thousand dollars.”[/size]
[size=45]He continued, "Some of these dollars ended up in Lebanon, which is suffering from a severe economic crisis."[/size]
[size=45]The report quotes one of the owners of money exchange shops as saying, “For weeks, he used to send dozens of Iraqis to withdraw dollars from the airport daily and send them to Lebanon.”[/size]
[size=45]And the governor of the Central Bank, Ali Al-Alaq, went on to say that “our biggest problem is that the Iraqis depend entirely on the dollar in monetary terms. Isn’t it strange for someone in his country to pay in foreign currency?” The whole world is heading towards abandoning criticism, and Iraq must do that as well.”[/size]
[size=45]About: (Financial Times) British website[/size]
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