The Central Bank Governor, Ali Mohsen Al-Alaq, announced on Sunday that starting next year, banks licensed in Iraq will rely on correspondent banks for external transfer operations, thereby dispensing with external transfers.
Al-Alaq stated in a press release received by “Al-Ma’louma” during a meeting with the heads of the boards and authorized directors of licensed banks in Iraq that the Central Bank is making efforts to facilitate direct communication channels between Iraqi banks and their foreign counterparts for various purposes like correspondence, commercial exchange, and more. These efforts are being made in multiple stages and are currently ongoing. The Central Bank is also working on opening transfer channels in different currencies, such as the UAE dirham, Turkish lira, Indian rupee, and euro.
According to the source, the coming year will see all internal commercial and other transactions in Iraq restricted to the Iraqi dinar instead of the dollar, except for transactions involving travelers. The source also mentioned that transfers through correspondent banks accounted for 60% of total transfers outside the Central Bank’s electronic platform. It was also noted that the verified transfer implementation rate reached more than 95%.
During a recent discussion, he emphasized that the majority of merchants entering official transfer channels and offering the dollar at a fixed price of 1,320 dinars is a key factor in controlling the overall price level and reducing inflation rates. This is a crucial indicator of the effectiveness of the monetary policy. He also noted that the black market price cannot be considered an accurate indicator because it is related to cash dollars used for non-essential purposes and not intended for legitimate trade activities.
Al-Alaq clarified that the novel system of external transfer and sale of the dollar offers risk protection for all parties involved, is internationally recognized and appreciated, complies with the law against money laundering and terrorism financing, and marks a significant milestone for the direct relationships between Iraqi banks and accredited international banks.
During the meeting, the attendees discussed the mechanism for establishing Riyada Bank and its significance to society, particularly since it aligns with the directives and vision of the honorable Prime Minister. They talked about the contributions of banks to establish Riyada and the working mechanisms of this bank, which will serve as a platform for individuals who wish to start productive projects and small businesses that will contribute to the development of the local economy and reduce the unemployment rate, with direct support from the Central Bank. The meeting ended 25 hours ago.
