Al-Sudani’s advisor reveals the reasons for the continued rise of the dollar and confirms a “soon breakthrough” in the crisis
Shafaq News / The financial advisor to the Prime Minister, Mazhar Muhammad Salih revealed, on Wednesday, that the continued rise in the price of the dollar is due to Iraq’s commitment to international compliance with regard to foreign transfers, stressing an imminent breakthrough in the dollar crisis.
In an interview with Shafaq News agency, Salih said, “Reorganizing foreign remittance sales by the Central Bank of Iraq according to the international compliance platform, which the latter has started since October 2022, is not an easy matter.”
And that “the value of these foreign transfers amounts to 80% of the bank’s total daily sales.”
He added, “The process of financing foreign trade in dollars is in the recovery phase after international compliance operations,” explaining that “the bank’s sales through the auction window, after the three packages launched by the Central Bank previously, have returned to their normal level, at an amount of $200 million per day.”
Saleh pointed out that “these sales have become stable and meet the demands of merchants and the local market for dollars, and the bank provides them based on what it possesses of large reserves of hard currency, which enables it to intervene at any time to control exchange rates for long periods, and it also has the ability to support the economy.” by financing foreign trade.
And Saleh stressed that “the price differences between the official exchange rate of the dinar against the dollar and the price equivalent to it (the black market), have begun to gradually shrink, albeit slowly,” adding at the same time that “the period between last October to the end of February 2023 During which requests from rejected transactions have accumulated because they violate the controls of the compliance platform.
And he pointed out that “the foreign currency window in the central bank needs some time to absorb that surplus of demand for foreign currency and according to the terms of the compliance platform,” stressing that “signs of the market show that it is moving positively and gradually towards a breakthrough in the coming days.”
Iraq witnessed a shortage of dollars after it was exposed to pressure from the United States aimed at limiting the flow of money to neighboring countries, which were imposed financial sanctions by the United States of America, and the Federal Reserve Bank of New York last November imposed stricter controls on transactions. Dollars for Iraqi commercial banks, as a result, slowed down the approval of transfers and eventually prompted traders to buy dollars from exchange offices, which raised the prices of the dollar against the Iraqi dinar to high levels, which led to a rise in the prices of basic and food items in the local markets.
Shafaq.com