The more Washington pressures the Central Bank of Iraq and Iraqi banks, the more Iraq benefits by escaping the control of the US dollar over its economy.
The primary player has re-entered the field, exerting control over Iraq’s economy, and Washington has reasserted itself as the captain to lead the match. The people are fully aware of who is in charge of this game and managing the matches.
At times, we witness satisfaction with the government’s economic dealings with the US Federal Bank and compliance with the World Bank’s requirements. However, there are also instances where new regulations are implemented to limit the movement of the dollar and impose penalties on Iraqi private banks that engage in unauthorized currency trading operations.
Washington’s current justification for their actions is that Iraq has failed to comply with Federal Bank regulations that limit the smuggling of dollars abroad, particularly to Iran, which is facing strict American sanctions. They believe that Baghdad has not taken necessary measures to stop the flow of currency, whether through the Kurdistan region or other outlets connected to Iran’s neighboring countries.
Despite the Sudanese government’s efforts to prevent the smuggling of the dollar abroad, control the internal market, and promote the use of the dinar in daily commercial transactions, Iraq is still struggling to curb this illegal activity. As a result, Iraq is exploring alternative plans to reduce demand for the dollar and facilitate trade in other currencies such as the euro, Chinese yuan, and Emirati dirham. The aim is to support the country’s external dealings and finance its operations.
The Central Bank of Iraq has implemented various measures to regulate the exchange of the dollar in the market. However, it has yet to establish an effective system to control its movement. Despite its efforts to reform the system, the exchange rate remains unregulated and the crisis has worsened. As a result, the relationship between Iraq and the World Bank has been strained, leading to stricter measures on international transactions from Iraq. Many of these requests have been rejected due to non-compliance with international economic standards. Furthermore, several banks suspected of conducting unauthorized cash transactions have been blacklisted.
If the Central Bank of Iraq implements a flawed monetary policy, it could have negative consequences for the financial system and the daily financial transactions of the people. Additionally, crime syndicates may have a hold on the Iraqi market and the movement of the dollar within it. The government aims to control the dollar to promote economic growth, ensure stability of the dinar’s value, and increase its commercial use. Measures will also be taken to prevent the dollar from being smuggled out, hoarded, or manipulated in pricing.
It is a positive step to reduce the influence of the dollar on the Iraqi market and prevent its circulation. This will help to restore the reputation of the dinar and ensure it has control over the internal market. This presents an important opportunity to restore the dinar’s prestige to its former level and restrict the use of the dollar to foreign transactions. A significant benefit of these decisions is that it will put an end to traders’ manipulation of the market and the impact on the lives of ordinary citizens.
Iraq is keen on becoming a member of the BRICS bloc as a means to reduce reliance on the US dollar. The citizens of Iraq are open to utilizing the Iraqi dinar in their transactions. The upcoming BRICS summit in Cape Town, South Africa, in August 2023 is eagerly anticipated, and Iraq has submitted 19 official requests to join the coalition. The growth of the BRICS currency poses a potential threat to the value and future prospects of the US dollar. Although the BRICS currency has not been issued yet, its potential impact on the US dollar is a cause for concern.
