On Friday, the Association of Private Banks predicted that the exchange rate would continue to decline in the parallel market as the Central Bank implemented agreements with the Federal Bank and other countries to finance foreign trade.
According to the association’s advisor, Samir Al-Nusairi, the Central Bank’s primary focus is financial and banking reforms. They are aligned with the government’s strategy, particularly in transitioning from a cash-based economy to a digital one. This shift will involve developing and deploying electronic payment devices to move towards a cashless society and achieve the goals of the fourth industrial revolution. These statements were made in a statement to the official agency, followed by NRT Arabia.
He said, “In light of the fluctuations that occurred in the Iraqi dinar exchange rate at the end of 2022, the Central Bank of Iraq and the government have implemented a new strategy to manage monetary policy. The new goals aim to control the exchange rate and ensure its stability.”
He explained that the goals included regulating the financing of foreign trade and bringing the Iraqi banking sector in line with global financial standards followed in most developed countries. They also aim to end the battle with speculators, who have a harmful impact on the national economy by dealing in dollars on the black market. Those who engage in this practice will be held accountable according to the law. Additionally, the lending policies will be reviewed and a new strategy called the National Lending Strategy will be implemented on a larger scale. This new strategy will build upon the executive aspects of bank financing from previous years.
He mentioned that after approximately 8 months of administrative, procedural and negotiation efforts with the US Treasury, the Federal Reserve Bank and international banks, the Central Bank was able to establish agreements, arrangements and understandings that allowed the introduction of new currencies for foreign transfers. These currencies include the Chinese yuan, the UAE dirham, the Indian rupee, the euro and the Turkish lira. The successful implementation of these agreements resulted in a decline in the exchange rate.
He continued, “An agreement was soon reached with Turkish banks to boost the balances of Iraqi banks in Turkish lira and euros. In addition, the Central Bank provided tens of millions of euros to reinforce this agreement. Another agreement was made with First Abu Dhabi Bank to deal in Emirati dirhams to fund Iraqis’ trade with the Emirates. All of these measures will help the exchange rate to keep declining in the parallel market, which is currently experiencing continuous decline.”
