For the third consecutive month, the Central Bank of Iraq saw a significant decline in dollar sales.
The head of the Iraq Future Foundation, Manar al-Obaidi, revealed on Monday that the Central Bank of Iraq’s foreign currency sales declined during the month of June.
Al-Obaidi said in a post on his Facebook page, followed by Shafaq News Agency, that “the Central Bank’s foreign currency sales decreased for the third consecutive month, reaching $5.7 billion in June of this year, a decrease of 15.5% compared to May, when sales recorded $6.5 billion. Thus, the Central Bank’s foreign currency sales in the first six months of the year reached $37.2 billion, a decrease of 2.2% compared to the same period last year, which recorded $38.1 billion.”
He added that “cash sales of foreign currency also fell to their lowest level, reaching only $99 million in June, the lowest monthly sales value since the introduction of cash sales. Thus, the Central Bank’s total foreign currency sales through cash sales in the first six months of the year amounted to $1.4 billion, a 21% decline compared to the same period last year, which amounted to $1.76 billion.”
According to Al-Obaidi, foreign currency sales through the balance enhancement mechanism reached $5.6 billion in June of this year, a 35% increase compared to June of last year. Thus, foreign currency sales through the balance enhancement mechanism in the first six months of the year reached $35.8 billion, a 37% increase compared to the same period last year, which amounted to $26 billion.
He continued, “The international settlement mechanism through the Central Bank has also been completely halted, as has the transfer mechanism through the Central Bank. Foreign currency sales are now limited to balance-building and cash sales to travelers. Despite the decline in cash sales and the halt in international settlements, the dollar exchange rate has remained stable and unaffected by this decline.”
The central bank’s sales this year are expected to reach around $70 billion, down from last year’s sales of more than $80 billion, according to Al-Abidi.
He pointed out that “the decline in foreign currency sales, coupled with the stability of the dollar price on the parallel market and the decline in inflation levels, calls for a careful review to determine the reasons behind this decline. This could be related to the possibility of most traders entering the official market, which reduces the need for hard currency on the parallel market, or to a decline in demand for goods, which could reflect a state of economic stagnation in the Iraqi market.”
Shafaq.com