Parliament explains the “economic feasibility” of the recent Iraqi-Turkish agreement and the solution to the dollar crisis[You must be registered and logged in to see this link.] |Today[You must be registered and logged in to see this image.]
Baghdad today - Baghdad
Today, Sunday (December 3, 2023), the Parliamentary Finance Committee revealed the importance of the economic feasibility of the agreement announced by the Central Bank of Iraq during its discussions with the Turkish side.
Committee member Moin Al-Kazemi said in an interview with “Baghdad Today”: “This agreement is important and will facilitate the issue of external transfers to pay import money from Turkey, and will stop any black transfers outside the platform, as dealing will be via the euro and the Turkish lira according to the agreement.”
He stated, “These steps come in order to solve the dollar crisis that Iraq has been going through for months, which created a parallel market that sells the dollar at a higher price than its official price in order to finance some trade outside the platform, and the amounts were going out in a large way to Turkey, and therefore this agreement will reduce “The demand for the dollar in the parallel market, and this will lead to a continuous decline until it reaches the official price.”
A member of the Parliamentary Finance Committee confirmed that "the American side has nothing to do with the issue of Iraq regulating its commercial and financial affairs with all countries, especially if they are in a currency other than the US dollar, and this is a political matter that Washington is not allowed to interfere in."
Yesterday, Saturday (December 2, 2023), the Central Bank of Iraq announced that it had reached an agreement with Ankara regarding “banking arrangements” between Iraqi banks and their Turkish counterparts, in addition to adopting the dinar against the euro or the Turkish lira in trade exchange.
The bank said in a statement, “The discussions conducted by a joint Iraqi delegation from (the government, the Central Bank, the Association of Iraqi Private Banks, and the banking sector represented by a number of private banks) in Istanbul were completed, and the delegation returned to Baghdad yesterday morning.”
The discussions, according to the statement, culminated in “an agreement to make banking arrangements between Iraqi banks and their Turkish counterparts through intermediary banks, in a way that guarantees trade exchange for major merchants and importers and to make and pay remittances in the euro and Turkish lira currencies.”
In addition, “it was agreed to organize the trade exchange for small merchants and retailers (dinar for euro or Turkish lira) under arrangements with combined transfers according to a commercial organization that guarantees the integrated cycle of the commercial process (deposit in dinars inside Iraq, payment in euros or lira in Turkey, shipping goods from Turkey to Iraq).
The Central Bank confirmed that “this would facilitate the external transfer of thousands of Iraqi traders, and spare them from working through non-fundamental means. This also comes in the context of regulating trade and external transfer in accordance with sound practices and standards, and within the framework of the comprehensive plan pursued by the Central Bank to open multiple channels, outlets and currencies with the aim of Maintaining the stability of the financial system and protecting it from risks.”
Since last Monday, an official Iraqi delegation made a visit to the Turkish capital, Ankara, to hold discussions on organizing trade relations between the two countries, in addition to opening correspondent accounts for Iraqi banks, in a negotiation round that is considered the second between the two parties in this regard.
Before that, in the middle of last month, the Governor of the Central Bank of Iraq, Ali Mohsen Al-Alaq, held negotiations with the Turkish ambassador, the head of the Turkish Business Council, and the managers of Turkish bank branches in Iraq in the capital, Baghdad, during which it was agreed to open bank accounts with the aim of enhancing external transfer in the euro currency.
This comes in light of the Iraqi efforts to control the dollar exchange rates, which began rising about a year ago, against the backdrop of Iraq’s implementation of conditions imposed by the US Federal Bank in the context of preventing the smuggling of hard currency to countries subject to sanctions such as Iran, which stipulated that Iraqi transactions be through a financial audit facility. Global (SWIFT).
In this context, the Central Bank of Iraq had taken several measures, including increasing the number of Iraqi banks to which external transfers were available, by opening accounts for them in a number of correspondent banks in a number of countries, especially Jordan and the Emirates.
The measures included opening accounts in the Chinese yuan, the Indian rupee, the euro, and the UAE dirham, in order to allow trade exchange in the currencies of the countries that export most to Iraq, such as India, China, and the UAE.