The electronic platform for foreign hard currency transfers’ termination mechanism was made public on Wednesday by the Central Bank of Iraq. The central bank also assured that the platform’s termination would not have any effect on the exchange rate or transfer operations.
As per an assertion by the National Bank, , the electronic stage for unfamiliar exchanges oversaw by the National Bank of Iraq started toward the start of 2023 as a first stage to revamp monetary exchanges in a manner that guarantees proactive oversight of them rather than ensuing oversight by the Central bank examining day to day moves.
The statement went on to say that this was “an exceptional measure, as the Federal Reserve does not usually do this,” and that “a gradual shift was planned toward building direct relationships between banks in Iraq and foreign correspondent and approved banks, mediated by an international auditing company to conduct pre-audit of transfers before they are executed by correspondent banks” was the reason for the move.
He proceeded: ” Only about 5% of the transfer process remains within the platform, which will be transferred using the same mechanism before the end of this year and in accordance with the plan. This means that 95% of the transfer process from the electronic platform to the mechanism of correspondent banks directly between it and Iraqi banks has been achieved up until this point.
The Central Bank of Iraq stated that some expectations regarding the potential effects on the exchange rate and transfer operations are unfounded because the process will not be completed all at once or in a single payment at the end of this year; rather, it will be completed with effort and careful follow-up in the past, with the exception of a small portion that will be completed in the upcoming brief period.
The Central Bank of Iraq found that the UAE, Turkey, India, and China account for roughly 70% of Iraq’s foreign trade as imports. As a result, the Central Bank of Iraq found ways to transfer euros, Chinese yuan, Indian rupees, and UAE dirhams through accredited correspondent banks in those nations.
In this regard, he added: 13) In addition to dollar transfers, Iraqi banks have begun using the previously agreed-upon and approved audit mechanism for transfer operations. These operations include personal transfers for legitimate purposes, external purchases through electronic payment channels and international money transfer companies, cash sales to travelers, and the payment of cash dollars for incoming transfers to the parties and purposes specified in the Central Bank’s published instructions.
The bank stated that it had successfully completed dollar requests and foreign transfer operations in accordance with international standards and the Anti-Money Laundering and Terrorist Financing Law.
“Providing the aforementioned channels for all purposes at the official dollar price makes this price the true indicator of economic practices, which is proven by the reality of price stability and control of inflation,” the statement from the Central Bank concluded. Some other cost exchanged beyond these channels is an unusual value that those with unconventional or unlawful practices resort to, who keep away from true diverts in their dealings, and bear the extra expenses alone by buying at a greater cost than the authority cost to bamboozle others about the distinction between the authority cost and the other.”
