A turning point in financial policies.. What comes after the cancellation of the dollar movement monitoring platform?
A turning point in financial policies.. What comes after the cancellation of the dollar movement monitoring platform?
2024-11-11 | 03:39
Economy advertisement Central Bank Iraqi On September 4, 2024, the electronic platform for monitoring will be terminated. a movement Dollar The transfer of US currency abroad, early next year, is a turning point in Iraqi financial policies.
This decision is expected to lead to fundamental changes in the mechanisms of financial transfers, and a direct impact on exchange rates and financial stability. Moreover, this decision poses new challenges to the banking sector, and requires a careful assessment of its effects and the fate of banks that will not be able to integrate into the new system, and the challenges that the government may face in implementing this transformation, according to observers.
Economic and financial expert Safwan Qusay confirms that the new transfer mechanism that will be implemented early next year will not negatively affect the financing of legitimate trade.
He says that the entry of the Central Bank Iraqi The US Federal Reserve as a supervisory body, and assigning transfer operations to Iraqi banks that have relationships with major international banks such as Citibank and JP Morgan, will contribute to accelerating transfer operations and limiting data manipulation.
Eliminating the parallel market
Qusay adds that this step will eliminate illegal trade that relies on buying Dollar From unofficial sources or what is known as the parallel market.
He points out that banks facing restrictions on dealing in foreign currencies are currently being evaluated by Oliver Wyman, with the aim of developing their capabilities in the field of money transfers, expecting that many of these banks will be able to resume their international business after meeting the required requirements.
The economic expert stressed that the new mechanism will ensure the provision of Dollar At a fixed official rate, which eliminates any concerns about financing illegal trade, noting that the parallel market will continue to face challenges due to strict regulatory measures.
Qusay called on informal traders to move to deal through official channels, stressing that there is a possibility of merging some Iraqi banks to form a new banking entity capable of freely practicing international trade, in coordination with the Central Bank Iraqi And the US Federal Reserve.
In early 2023, it was announced Iraq Adopting an electronic platform for monitoring a movement sale Dollar And money laundering operations, after warnings issued by the US Federal Reserve, and following the US Treasury Department’s punishment of several local banks for their “involvement” in suspicious activities.
Expectations of a rise in the exchange rate
For his part, economic expert Nabil Jabbar Al-Tamimi warned that the shift to a new mechanism for bank transfers in Iraq May lead to a temporary increase in the exchange rate. Dollar During the coming period.
The Council of Ministers approved Iraqi On February 7, 2023, on the decision of the Board of Directors of the Central Bank Iraqi By adjusting the exchange rate Dollar Against the dinar, as follows:
1300 dinars per dollar, the purchase price from the Ministry of Finance.
1310 dinars per dollar, the selling price for banks.
1320 dinars per dollar, the selling price by banks and non-banking financial institutions to the final beneficiary.
Al-Tamimi explained that the Central Bank Iraqi It works to end reliance on the current platform for transfers, and move to a system that relies on direct relations between Iraqi banks and international banks.
He pointed out that some Iraqi banks are ready to work with this new system, but other banks need to develop their capabilities, and he expected that this shift would lead to some market turmoil during the transitional period, but he confirmed that the government is working to support banks to successfully overcome this stage.
Al-Tamimi explained that the Iraqi government, represented by the Central Bank, is planning to evaluate all Iraqi banks and qualify them to work with the new system, in cooperation with international financial auditing companies, stressing that these steps aim to enhance the stability of the banking system. Iraqi And increase its efficiency, which will have a positive impact on the economy. Iraqi in general.
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