Iraq stops all cash withdrawals in dollars in early 2024

[size=36]Iraq stops all cash withdrawals in dollars in early 2024[/size]

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[size=52]Iraq ends all cash withdrawals in dollars in early 2024[/size]

[size=45]A senior official in the Central Bank of Iraq confirmed 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]The Director General of Investment and Transfers Department at the Central Bank of Iraq, Mazen Ahmed, said that the aim of the step is to stop the illegal use of about 50% of the amount of cash amounting to 10 billion dollars that Iraq imports annually from the Federal Reserve Board (the US central bank) in New York.[/size]
[size=45]This step comes as part of a broader campaign to stop the economy's dependence on the dollar, after residents began to prefer the US currency over the dinar.[/size]
[size=45]Ahmed said that people who deposit dollars in banks before the end of 2023 will be able to withdraw money in dollars in 2024. But dollars deposited in 2024 can only be withdrawn in the local currency at the official rate of 1,320 dinars to the dollar.[/size]
[size=45]Limiting transactions to dinars
. At the end of last month, the Central Bank of Iraq announced that next year will witness limiting internal commercial transactions to dinars instead of dollars, with the exception of those delivered to travelers. At that time, the bank’s governor, Ali Mohsen Al-Alaq, explained that the bank was continuing to dispense with external transfers, as commercial banks depend on correspondent banks for external transfers.[/size]
[size=45]Al-Alaq pointed out that the bank seeks to open direct channels of communication for Iraqi banks with their foreign counterparts in correspondence and commercial exchange. He added that work is underway to convert into various currencies, including the euro, the UAE dirham, the Turkish lira, and the Indian rupee.[/size]
[size=45]He explained that transfers via correspondent banks amounted to 60% of the total transfers (outside the Central Bank’s electronic platform), while the implementation rate of verified transfers reached more than 95%, explaining that “this came after an agreement between the Central Bank of Iraq and the US Federal Bank.” “Similar to countries around the world, central banks do not carry out executive duties, and their role is focused on supervision and oversight.”[/size]
[size=45]Meanwhile, Iraq hopes to control the general level of prices and reduce the inflation rate, which is a basic indicator of the effectiveness of monetary policy.[/size]
[size=45]A senior US Treasury Department official said last month that the Central Bank of Iraq must address the ongoing risks resulting from the misuse of the dollar in Iraqi commercial banks, to avoid imposing new punitive measures targeting the country's financial sector.[/size]
[size=45]Last July, the United States prevented 14 Iraqi banks from conducting transactions in dollars, as part of a broader campaign against the illegal use of the dollar.[/size]
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