Iraqi currency deteriorates after US imposed sanctions on 14 banks

Iraqi currency deteriorates after US imposed sanctions on 14 banks

On Wednesday, a large group of protestors gathered outside the Central Bank of Iraq (CBI) in Baghdad. Meanwhile, bank owners urged the government to take action in order to halt the sudden surge in the exchange rate of the US dollar, which occurred after the US blacklisted 14 Iraqi banks.

In the last two days, the exchange rate for the US dollar has increased from 1470 dinars to 1570 dinars.

Following the United States’ crackdown on transferring US currency to Iran and other sanctioned countries, last week, 14 Iraqi banks were barred from conducting US dollar transactions. As a result, there has been a rise in certain financial activities.

According to The Wall Street Journal (WSJ), officials from the US have announced that 14 Iraqi banks are now prohibited from conducting any US dollar transactions. This measure was taken in an effort to prevent the transfer of US currency to sanctioned countries like Iran.

According to The Wall Street Journal (WSJ), the Treasury Department and the Federal Reserve Bank of New York imposed a ban.

Fourteen banks are currently facing a ban and have issued a statement urging the Iraqi government to take action. They also warn that if one-third of Iraq’s private banks are banned from conducting US dollar transactions, it will not only impact the exchange rate but also hinder foreign investment.

On Wednesday, Ali Mohsen Al-Alaq, the governor of the CBI, announced that the official rate of 1320 dinars to one US dollar will be maintained for all legitimate transactions, which includes transfers and credits for various imports.

According to Al-Alaq, the reason for the recent increase in the exchange rate is because some traders are hesitant to utilize the authorized electronic platform for currency transactions.