Over the course of the previous year, analysts of economic matters have proposed that the increase in the prices at which dollars are exchanged on the black market is the result of merchants purchasing dollars there with the intention of reselling them because they were unable to get the currency from the Central Bank of Iraq to support their business.
Their inability to do so stems from a number of factors, such as the fact that the nations from which they import goods are prohibited from using the dollar, primarily Iran, or the fact that merchants would have to pay taxes to their home country if they had to provide documentation and proof to the Central Bank of Iraq in order to obtain the dollar at the official rate. In essence, they avoid it, particularly when it comes to the commerce in alcohol and cigarettes, which are subject to significant and double taxation.
From this vantage point, a computerized analysis of the discrepancy between the amount of money that Iraq imported in 2023 and the amount of money that the Central Bank transferred from dollars was carried out.
The Central Bank of Iraq purchased $64 billion in foreign exchange from the Iraqi Ministry of Finance, but only sold $33.5 billion of that amount, according to financial statistics on currency purchases and sales.
Approximately 75% of dollar sales were allocated to foreign transfers for import purposes, with $25.1 billion in foreign transfers and $8.4 billion in cash purchases for travel purposes.
The noteworthy aspect, however, is that the amount of external transfers from the Central Bank for the purpose of importation is much less than the value of what Iraq really imported in 2023—that is, only 70% of the volume of what Iraq actually imported in 2023.
Iraq imported almost $36 billion in 2023, according to global import statistics recorded by, but the Central Bank only sent $25.1 billion outside.
This indicates that almost 11 billion dollars’ worth of imports came from the parallel market last year rather than the Central Bank, or about 30% of total imports into Iraq. Stated differently, thirty percent of Iraq’s imports will be tax-free in 2023.
