IMF Report - October 2014

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IMF Report - October 2014 


Foreign exchange allocation systems. Foreign exchange allocation is often used to provide foreign exchange for strategic imports, such as oil or food, when foreign exchange reserves are scarce. When these arrangements result in rationing, they can give rise to exchange restrictions. In addition, a special foreign exchange facility applies to essential imports.

Iraq joined the group of countries with allocation systems. During the reporting period, Iraq 
introduced 2 tightening and 1 easing measure with respect to banks’ purchases of foreign exchange at the Central Bank of Iraq currency selling window. These measures reflected the authorities’ twin goals of liberalizing the foreign exchange market over the medium term on the one hand and fully implementing 
anti-money-laundering and combating the financing of terrorism measures on the other.

Iraq capped authorized banks’ spreads at ID 10 per U.S. dollar over the exchange rate at 
which they may buy foreign exchange at the Central Bank of Iraq currency selling window. 

The latest IMF staff reports indicate that many members with Article XIV status maintain restrictions subject to IMF jurisdiction under Article VIII. Iraq is listed as one of these.

The use of restrictions on payments for current invisible transactions increased noticeably in 2013. Four of the new measures are attributable to Iraq, which limited the availability of foreign exchange for firms, individuals, banks, money transfer companies, and money exchange bureaus. 

Regarding on real estate transactions, Iraq strengthened documentary requirements for the transfer of funds abroad related to sales of securities or shares by nonresidents.

http://www.imf.org/external/pubs/nft/2014/areaers/ar2014.pdf