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Arab economic website: The currencies of Iran and Syria fell a lot after Washington's scrutiny of Iraq's dollar transactions


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Arab economic website: The currencies of Iran and Syria fell a lot after Washington's scrutiny of Iraq's dollar transactions

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Arab economic website: The currencies of Iran and Syria fell a lot after Washington's scrutiny of Iraq's dollar transactions

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  • The "Economy of the East" website, on Wednesday, linked the tightening US measures on the dollar in Iraq, and the decline of the Iranian and Syrian currencies to a large extent in the past days.

    In a report followed by IQ NEWS, the site highlighted Iraq's actions after the US Federal Reserve reduced its access to the dollar and audited the transactions of Iraqi traders in this currency.


    More than 60,000 Iraqis attending the Gulf Cup final at Basra Stadium cheered with one
    voice, demanding that Prime Minister Mohammed Shia al-Sudani lower the dollar exchange rate that has pushed up food prices in the country by more than 50 percent since the beginning of the year.

    Five days after these chants, al-Sudani relieved Central Bank Governor Mustafa Makhif and reassigned Ali al-Alaq, who held the post from 2014 to 2020.

    According to several Iraqi websites that follow the black market, the exchange rate circulating at the beginning of the week reached 1600 dinars to the dollar, compared to 1460 dinars for the official rate, thus depreciating the value of the Iraqi dinar during the current month by more than 12%.

    On January 19, the Wall Street Journal quoted US and Iraqi officials as saying that "the Federal Reserve Bank of New York began in November to impose stricter controls on international dollar transactions by Iraqi commercial banks, in a move to curb money laundering and illegal seizure of dollars destined for Iran and other countries in the Middle East subject to sanctions."


    The Iraqi Prime Minister attributed in a press conference on January 19 the actions of the US Central Bank to the fact that a number of transfers to import goods were rejected by intermediary banks, due to the inflation of prices in order to get the dollar out of Iraq, noting that some of the transfers that were rejected included, for example, a purchase document for electric refrigerators at a price of $ 4,800 each, and the price of a liter of edible oil at about $ 25. These prices are many times higher than those in the local market.

    Economic researcher Nabil al-Tamimi ruled out that the decision to remove Mustafa Makhif from his position as governor of the Central Bank is linked to political goals, "but rather to the measure of the governor's ability and measures to confront the crisis." "The Islamic Dawa Party, to which the new governor Ali al-Alaq belongs, has its sights set on raising the value of the Iraqi dinar again," he said.

    The Central Bank of Iraq's tripartite

    audit no longer meets the demand of traders and importers for dollars, as before. This is due, in part, to its strictness in terms of the evidence and data that banks must provide for the purpose of transfer, as it is audited first by the central bank, then by the intermediary bank, and then by the US Federal Reserve.

    During a television interview, yesterday, Tuesday, Washington's ambassador in Baghdad, Alina Romanowski, said that the Treasury Department and the US Central Bank have been demanding over the past two years the need for Iraqi banks to comply with anti-money laundering and not to smuggle Iraqi "dollars" to other countries, noting the platform established between the Central Bank of Iraq and the Federal Reserve to achieve this goal.

    In a press conference last Sunday, on the sidelines of the Baghdad International Motor Show, Ihsan Al-Yasiri, a member of the Board of Directors of the Central Bank, explained that the new platform will force banks to submit requests to buy dollars a week in advance, and then be audited, starting with the identities of the seller and the buyer, through the Office of Foreign Assets Control (OFAC), revealing that one day the US Federal Reserve rejected 40% of Iraq's requests to transfer funds totaling $ 170 million.

    A late

    step after the American emphasisOn the dollar leaving Iraq, the currencies of Iran and Syria began to lose value further, due to their dependence on the dollar issued from Iraq. According to websites that monitor the exchange rates of both countries, the Iranian rial has fallen since Saturday to an all-time low of 447,000 rials against the dollar on the black market.

    While the Syrian pound returned to the pace of sharp decline, reaching the exchange rate, on Wednesday, more than 6,700 pounds against the dollar, approaching the record level of 7,000 pounds per dollar.

    The Central Bank of Iraq has taken a series of measures to increase the supply of dollars, such as opening new outlets to sell dollars to citizens wishing to travel for the purpose of tourism and treatment through government banks, after this was limited to private banks.
    However, these measures have had no impact on the exchange rate of the dollar, as it is still higher in the parallel market by more than 12% above the official rate. It has also been noted that exchange shops sell dollars at a price even higher than the parallel market, especially to large importers who transport dollars to Turkey, and then make financial transfers through Turkish banks to buy goods.

    According to economic researcher Saleh Lafta, the move to dismiss Mustafa Makhib is "long overdue". "It should have been said since the failure of the Central Bank of Iraq to maintain the rate of the dollar against the Iraqi dinar," he said.

    He considers that the return of stability to the exchange rate of the dollar requires "adherence to international controls to prevent money laundering and currency smuggling through fictitious invoices, develop the banking system, increase electronic dealing, and withdraw the huge monetary mass from the market to prevent speculation by traders." These files are now in the custody of the new governor Ali Al-Alaq, can he solve them?
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“A late step after the American emphasis on the dollar leaving Iraq, the currencies of Iran and Syria began to lose value further, due to their dependence on the dollar issued from Iraq.”


“The return of stability to the exchange rate of the dollar requires "adherence to international controls to prevent money laundering and currency smuggling through fictitious invoices”

 

Good move by the UST.

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