ALBAWABA – As of the beginning of 2024, all internal transactions and dealings will be restricted to local currency in Iraq, Bloomberg reported Monday, citing a central bank statement.
The central bank previously banned dealings in United States (US) dollars outside of the banking sector, in a bid to curb black-market trading and limit the hard currency’s smuggling abroad.
Meanwhile, the central bank is in the process of opening transfer channels in various currencies, including the Emirati dirham, Turkish lira, Indian rupee and euro, according to the statement.
The central bank will also suspend its money-transferring operation for the purposes of foreign trading, starting next year, which will fall strictly under the mandate of licensed Iraqi banks.
The central bank is attempting to curb black market transactions in the dollar by restricting dealings to local currency in Iraq - Shutterstock
Iraq’s central bank, the official statement confirmed, will instead focus on “supervision and monitoring”, Bloomberg reported.
On Sunday, the dollar was available on the unofficial market at about 1,550 dinars, 17 percent below the official rate of 1,320, according to the New York-based news agency.
Iraq was also subject to a number of US sanctions, including those pertaining to bans on dollar transactions linked to Iran, pending audits for compliance.
A total of 14 Iraqi banks were sanctioned back in July for allegedly helping siphon US dollars to Iran. They were barred from conducting dollar transactions as part of a wider crackdown on dollar smuggling to Iran, according to Iraqi central bank officials.
Several private Iraqi banks hit by the dollar ban under the sanctions said a week later that they were ready to challenge the measures and face the impending audits, news agencies reported.
