Central Bank of Iraq denies reports of cash dollars shipment halt
ERBIL, Kurdistan Region - Iraq’s Central Bank on Friday announced the arrival of another regular shipment of cash dollars from the US Federal Bank, denying media reports by unidentified outlets, suggesting the cash shipments to Iraq had been halted or reduced.
“The Central Bank of Iraq confirmed that the dollar shipments sent by the US Federal Bank are proceeding according to a specific schedule and timings agreed upon between the two monetary institutions,” the Central Bank of Iraq (CBI) said in a statement.
The Iraqi dinar has lost value against the US dollar over the past several months, leading to a surge in prices of basic goods and consequent outcry from the Iraqi public. The depreciation has been attributed to the smuggling of dollars out of Iraq, mainly to neighboring Iran.
In the statement, the CBI denied media reports insinuating cash shipments to Iraq had stopped, adding that the latest regular cash shipment arrived on time on Thursday, and urging the media to be accurate in publishing information regarding Iraq’s monetary policies. No specific media outlets were mentioned.
Last month, the head of the CBI announced that all the transactions inside Iraq would be made using Iraqi dinars starting in 2024, as the value of the currency against US dollars continues to be much lower than the one set in the federal budget.
“Next year, all internal commercial and other transactions will be restricted to the Iraqi dinar instead of the dollar, except for those given to travelers,” said Ali Mohsen al-Alaq, Governor of the CBI.
Alaq noted that most businesspeople have entered the official conversion channels which provide one dollar at the price of 1,320 Iraqi dinars, stressing that it has played a major role in “decreasing the rate of inflation.”
Reuters cited Mazen Ahmed, director-general of investment and remittances at CBI as saying, that the the aim of the decision to move to Iraqi dinar for domestic transactions was to “stamp out the illicit use of some 50% of the $10 billion that Iraq imports in cash from the New York Federal Reserve each year”.
The 2023, 2024, and 2025 Iraqi federal budget, passed in June, set the exchange rate of $1 to 1,300 Iraqi dinars. The ongoing smuggling has prevented the suggested value from being reached, with the value of the dollar currently sitting at around 1,570 IQD in the currency markets of Iraq and the Kurdistan Region.
The US in July banned transactions with 14 Iraqi banks for allegedly violating its rules. The move further dropped the value of the Iraqi currency.
In January, the value of a US dollar was placed at 1,750 IQD - the highest since the issuing of new banknotes in 2003. The drop in the Iraqi dinar value was attributed to corruption, smuggling dollars out of Iraq, and pressure from the United States.
The Iraqi public servants are the most affected by the instability of the exchange rate, as their salaries suffered from the drop in the currency value.
Iraqi Prime Minister Mohammed Shia’ al-Sudani - who has vowed to control the unstable exchange rate - sacked the governor of the country’s Central Bank head in late January, replacing Mustafa Ghalib Makhif with Alaq as protests in Baghdad ensued after prices of goods surged.
“The Central Bank of Iraq confirmed that the dollar shipments sent by the US Federal Bank are proceeding according to a specific schedule and timings agreed upon between the two monetary institutions,” the Central Bank of Iraq (CBI) said in a statement.
The Iraqi dinar has lost value against the US dollar over the past several months, leading to a surge in prices of basic goods and consequent outcry from the Iraqi public. The depreciation has been attributed to the smuggling of dollars out of Iraq, mainly to neighboring Iran.
In the statement, the CBI denied media reports insinuating cash shipments to Iraq had stopped, adding that the latest regular cash shipment arrived on time on Thursday, and urging the media to be accurate in publishing information regarding Iraq’s monetary policies. No specific media outlets were mentioned.
Last month, the head of the CBI announced that all the transactions inside Iraq would be made using Iraqi dinars starting in 2024, as the value of the currency against US dollars continues to be much lower than the one set in the federal budget.
“Next year, all internal commercial and other transactions will be restricted to the Iraqi dinar instead of the dollar, except for those given to travelers,” said Ali Mohsen al-Alaq, Governor of the CBI.
Alaq noted that most businesspeople have entered the official conversion channels which provide one dollar at the price of 1,320 Iraqi dinars, stressing that it has played a major role in “decreasing the rate of inflation.”
Reuters cited Mazen Ahmed, director-general of investment and remittances at CBI as saying, that the the aim of the decision to move to Iraqi dinar for domestic transactions was to “stamp out the illicit use of some 50% of the $10 billion that Iraq imports in cash from the New York Federal Reserve each year”.
The 2023, 2024, and 2025 Iraqi federal budget, passed in June, set the exchange rate of $1 to 1,300 Iraqi dinars. The ongoing smuggling has prevented the suggested value from being reached, with the value of the dollar currently sitting at around 1,570 IQD in the currency markets of Iraq and the Kurdistan Region.
The US in July banned transactions with 14 Iraqi banks for allegedly violating its rules. The move further dropped the value of the Iraqi currency.
In January, the value of a US dollar was placed at 1,750 IQD - the highest since the issuing of new banknotes in 2003. The drop in the Iraqi dinar value was attributed to corruption, smuggling dollars out of Iraq, and pressure from the United States.
The Iraqi public servants are the most affected by the instability of the exchange rate, as their salaries suffered from the drop in the currency value.
Iraqi Prime Minister Mohammed Shia’ al-Sudani - who has vowed to control the unstable exchange rate - sacked the governor of the country’s Central Bank head in late January, replacing Mustafa Ghalib Makhif with Alaq as protests in Baghdad ensued after prices of goods surged.