An exchange counter in the al-Kifah district in Baghdad, December 27, 2022 (AFP/AHMAD AL-RUBAYE)
Governor of the Central Bank convened, extraordinary session demanded in Parliament: the depreciation of the dinar panics Tuesday in Iraq where the reserves in foreign currencies are however at their highest.
These “pressures” on the national currency are only “passing”, assured the Central Bank while Prime Minister Mohamed Chia al-Soudani received his governor.
Nevertheless, deputies are calling for an extraordinary parliamentary session because in two weeks, if, officially, the price of the dollar has not changed (about 1,470 dinars), among money changers it reached 1,580 dinars on Tuesday, according to the official agency INA .
To preserve the exchange rate, the authorities have adopted several unsuccessful measures so far.
They pledged to facilitate the supply of dollars at the official rate for private sector imports, and government banks opened counters to sell foreign currency to individuals traveling abroad.
An adviser to the Prime Minister, Muzhar Saleh, assured INA on Sunday that there was “no need to fear Iraq’s ability to maintain the stability of the dinar’s exchange rate”.
A man counts dollars in the al-Kifah neighborhood in Baghdad on December 27, 2022 (AFP/AHMAD AL-RUBAYE)
“Foreign currency reserves have reached a high in Iraq’s financial history and probably exceed $100 billion,” driven by soaring oil prices, he pleaded.
The current situation, he added, is notably due to the “objections” of an international conformity control body concerning “certain transactions with incomplete data”.
These are, explains to AFP the economist Safwan Qusaï, “new restrictions imposed by the American Treasury concerning financial transfers to certain countries”, in particular trading partners of Iraq.
“Audits have shown that some Iraqi establishments were transferring funds without verifying suppliers, the value of the invoice and what goods were entering Iraq,” he adds. And when an importer cannot obtain dollars through official channels, he falls back on the “parallel market”, he explains.
Rich in oil but plagued by corruption and money laundering, Iraq ranks 157th out of 180 of the most corrupt countries in the ranking of the NGO Transparency International.
© 2022 AFP
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