Iraq central bank has requested cooperation from Kurdistan’s banks in order to permit foreign currency transfers. Photo: Rudaw
ERBIL, Kurdistan Region – On Wednesday, Iraq’s central bank announced they would ease some financial restrictions previously imposed on banks in response to the Kurdistan Region's vote for independence on September 25.
The Iraq central bank had informed the Kurdistan Regional Government (KRG) on Tuesday that it would halt all foreign currency transfers to the KRG as well as stop selling dollars to four Kurdish banks, banking and government officials told Reuters.
However, dollar and other foreign currency transfers continued on Wednesday after receiving a pledge of cooperation from all but four Kurdish-owned banks, which remain unnamed.
“The dollar sale prohibition will be lifted if the central bank sees that the four banks are really cooperating in disclosing their financial transactions,” a banking source said.
The measures taken by Iraq’s central bank are an attempt at controlling the Kurdish banking industry and financial transactions within the KRG. Banking restrictions are just one of several sanctions imposed on the Kurdistan Region following the independence referendum that saw 92.7 percent vote ‘Yes’ for separation from Iraq.
The Iraqi government has rejected the results and enacted a number of measures against Kurdistan, including shutting the airports to international flights and ordering the deployment of troops to disputed areas.
Additionally Baghdad is coordinating military drills with Turkey and Iran on the Kurdish borders.
After the vote, the Kurdish leadership has expressed their willingness to engage in dialogue with Baghdad with the aim of achieving independence. Leaders in Iraq, however, have said Erbil must nullify the referendum results prior to agreeing to talks, an ultimatum Kurds have refused to agree to.