Central Bank: Agreement on trade exchange with Turkey (dinar versus euro or Turkish lira)

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Central Bank: Agreement on trade exchange with Turkey (dinar versus euro or Turkish lira)

On Saturday, the Central Bank of Iraq announced an agreement to facilitate transactions between Iraqi and Turkish banks through intermediary banks.

The bank has released a statement to Jarida, stating that a joint Iraqi delegation consisting of the government, the central bank, the Association of Iraqi Private Banks, and the banking sector, represented by several private banks, completed their discussions in Istanbul and returned to Baghdad yesterday morning.

During the discussions, an agreement was reached to establish banking arrangements between Iraqi banks and their Turkish counterparts, using intermediary banks to facilitate trade exchange for major merchants and importers. Additionally, the agreement was to make and receive remittances in the form of euro and Turkish lira currencies.

The parties involved agreed to set up a system for the trade exchange of dinars, euros, or Turkish lira for small merchants and retailers. The commercial process will be guaranteed by a commercial organization that ensures the entire cycle of the process. The merchants will deposit dinars in Iraq and pay in euros or lira in Turkey. The goods will then be shipped from Turkey to Iraq.

He said, “This will make it easier for thousands of Iraqi merchants to transfer money externally and avoid using non-legitimate methods. The aim is to regulate trade and external transfers based on established practices and standards, as part of the Central Bank’s comprehensive plan to open up multiple channels, outlets, and currencies, with the goal of maintaining stability.” The financial system will be protected from risks, and general price stability will be achieved by covering imports at the official price, which will be confirmed by controlling inflation rates.