On Friday, the Central Bank of Iraq announced its plans to take measures that will support the dinar and maintain its strength against other currencies. Additionally, the bank will implement additional measures that will positively impact the exchange rate. The bank also noted that it has gradually discontinued using the electronic platform.
Muhammad Younis, Assistant Director General of the Investment Department at the Central Bank of Iraq, stated that the Central Bank will keep a close eye on all banks and customer complaints that it receives in case the banks are compelled to switch customer accounts to the US dollar. He emphasized that this issue is straightforward to monitor and follow, and any banks that disregard this decision will be held accountable.
Younis stated that the recent decision and any future decisions made in the coming days are aimed at supporting the Iraqi dinar and increasing public confidence in it. He further added that the strength of the dinar and public trust in it is a result of the Central Bank of Iraq’s continued support towards various sectors, including commerce, electronic payment, travel, and others.
He stated that in the days to come, additional measures will be taken to meet all market needs, support the Iraqi dinar, and maintain its strength against other currencies. He also mentioned that the Central Bank has implemented new procedures to prevent banks from automatically converting customer accounts from the dollar currency to the Iraqi dinar without the customer’s consent. Customers are now allowed to open accounts in different currencies.
Younis has pointed out that the newly updated procedures now allow companies that have contracts with the state to receive their incoming transfers, such as workers’ salaries, as well as ongoing agreements for grants and loans in compliance with the Council of Ministers. Another critical point is that the decision now permits banks to arrange with their customers to bring their incoming remittances in cash to Iraq.
He emphasized that the measures being taken would have a positive impact on the exchange rate in the market, increase the supply of the dollar, and benefit important sectors in the economy. These include the exporting sectors, companies operating in the government and infrastructure development fields, and civil society organizations that contribute to the humanitarian and charitable field in Iraq.
Younis has explained that the recent update and instructions aim to make it easier for people to obtain cash dollars to meet their current needs. The instructions have expanded the number of entities that can benefit from cash dollars, including civil society organizations. This move is intended to expand the largest possible segment of people who can access the cash dollar. The exporter’s sector is a vital part of the economy, and this update allows them to obtain 40 percent of the remittances they receive from their exports in cash.
He explained, “The decision clearly outlines the mechanisms that banks should follow to implement it. It specifically addresses incoming transfers, as it allows certain groups to receive their incoming transfers in cash. This decision only applies to incoming transfers and does not affect the cash sale of dollars to travelers, which will continue as usual. The decision will help meet the needs of customers and companies, and this will have a positive effect on the exchange rate in the coming days.”
Younis emphasized that there are currently no restrictions imposed on banks with regards to money transfer. This is because there are procedures in place to gradually phase out the Central Bank of Iraq platform by supporting the opening of accounts in foreign banks abroad. The role of the Central Bank is now limited to enhancing these balances and monitoring any transfers that occur.
He clarified that there are no restrictions on money transfers within the foreign currency banking system, but the new decision affects cash dollar withdrawals.
