[You must be registered and logged in to see this image.]
November 23, 2023[You must be registered and logged in to see this link.]
Baghdad/Al-Masala Al-Hadath: On Thursday, the Central Bank allowed, in a directive to banks and exchange companies, to sell the dollar at the market price and canceled all previous directives obligating them to deal at the official rate.
An exception to this, according to an official document, is that amounts received through the currency selling window, which means canceling previous directives that prohibited all transactions that are not subject to the official exchange rate.
On Thursday, the financial advisor to the Prime Minister, Mazhar Muhammad Saleh, explained the goal of today’s Central Bank circular regarding trading the dollar from outside the platform according to supply and demand, indicating that it will provide high flexibility in supply that contributes to market stability.
Saleh said: “Liberating the operations of buying and selling foreign exchange is not an alternative to the policy of defending price stability and the government’s plan to interfere in the stability of the general level of prices.”
He added, “Families, natural and legal persons in Iraq are hoarding amounts of cash in foreign currency and outside the banking system amounting to billions of dollars and are subject to two phenomena: the first is the difficulty of managing their circulation outside the laws of supply and demand that create the currently free exchange rate due to deterrent legal controls and the second is the contraction of a large cash supply of foreign currency.” It is liquid and it is immobile in the form of a cash hoarding that is immobile and outside the circle of view.”
He continued, “This exacerbates exchange rate fluctuations under the influence of (a liquidity trap in foreign currency resulting from an expected positive wealth due to the rise in the value of foreign exchange against the local currency).”
He added, “Therefore, liberalizing the climate of dealing in foreign currency and giving it a white character will provide high flexibility in supply that contributes to reducing noise in the secondary exchange market, which provides a flexible supply of foreign exchange that leads to market stability, supported by a government policy that provides commodity supply through the official exchange rate.” Highly stable and financed at an exchange rate of 1,320 dinars per dollar.”
Earlier, the representative of the exchange companies, Dhia Al-Taie, revealed that the exchange companies receive only 5% of the currency window dollar, and the Central Bank imposed forced mergers on Class C companies, stressing that the weakness of the exchange companies is the lack of representatives to defend them.
He pointed out that the central bank's actions were unable to control the exchange rate
Al-Taie stated that the Association of Exchange Companies pledges to reduce the dollar within 3 months, stressing that the Central Bank caused confusion in the work of exchange companies and increased the price of the dollar.
[You must be registered and logged in to see this link.]