Al-Sudani dismisses the governor of the Central Bank after the deterioration of the exchange rate of the Iraqi dinar
Al-Sudani dismisses the governor of the Central Bank after the deterioration of the exchange rate of the Iraqi dinar
1-23-2023
Baghdad – The Iraqi Prime Minister, Muhammad Shia’a Al-Sudani, decided, on Monday, to relieve the Governor of the Central Bank of Iraq, Mustafa Ghaleb Makhaif, from his post, while assigning Ali Mohsen Al-Alaq to manage the bank by proxy.
Al-Sudani also decided to refer the director of the Iraqi Trade Bank to retirement, and assign Bilal Al-Hamdani to manage it in addition to his duties, according to the Iraqi News Agency, “INA.”
And “Makhaif” is a jurist who assumed the position of governor of the Central Bank in September 2020, and before that he worked as director of the legal department at the Central Bank. Al-Alaq has held the position of Governor of Iraq in the International Monetary Fund since 2014, Chairman of the Board of Governors of the Arab Monetary Fund since 2020, and Governor of Iraq in the Fund.
Yesterday, Sunday, Al-Sudani took urgent decisions to “address” the exchange rate of the dollar against the local currency, during his meeting with the Federation of Iraqi Chambers of Commerce to discuss solutions to the fluctuation of the exchange rate of the foreign currency.
The most prominent of these decisions included opening a new window for selling foreign currency to small merchants through the Iraqi Trade Bank (TBI), and financing the central bank for the bank with an additional amount of $500 million.
These decisions come at a time when the exchange rate of the US dollar against the Iraqi dinar since last November has gradually increased to reach its highest levels in recent days, as it crossed Sunday evening the barrier of 165 thousand dinars per 100 dollars.
The deterioration of the value of the Iraqi dinar negatively affected the prices of basic commodities and foodstuffs, which witnessed a significant increase, which strained the budgets of Iraqi families and changed their accounts in terms of spending.
It is believed that the decision to exempt the governor of the central bank from his position to hold him solely responsible for the rise in the price of the dollar, although he confirmed earlier that this rise is temporary and that he is trying to control the exchange rate of the dollar to ensure financial stability in the Iraqi markets.
Al-Sudani’s decision preempted a demonstration called for by the awareness movement in front of the Central Bank of Iraq building on Wednesday, to protest the rise in the exchange rate of the dollar against the Iraqi dinar, and he also preempted a parliamentary session to summon the bank’s governor to find out the repercussions of the dollar’s rise.
The Iraqi currency fell by up to 10 percent against the dollar, as controls were applied to international transactions in dollars.
A few days ago, US and Iraqi officials said that the Federal Reserve Bank in New York began imposing stricter controls on international dollar transactions by Iraqi commercial banks in November 2022, in a move to curb money laundering and the illegal seizure of dollars destined for Iran and other countries in the east. Middle is severely punished.
US officials added to the newspaper that Iraq was used as a haven for money laundering for Tehran and Damascus, as money in dollars was transferred based on forged invoices outside Iraq to unknown persons.
The bankers confirmed forging invoices in dollars for goods that did not enter Iraq.
According to the newspaper, US officials aim to prevent “malicious parties” from using Iraqi banks.
Cash transfer controls in Iraq are intended to prevent smuggling to Tehran, according to US officials.
Iraq has been witnessing for years a suffocating economic crisis due to political crises and conflicts, as well as mismanagement and widespread manifestations of corruption, and despite the financial boom that has been achieved during the past months due to the rise in oil prices, the Iraqis have not seen any improvement on the ground.
The Sudanese government, which was formed last October, had prioritized combating corruption and reviving the deteriorating economy, but observers believe that many challenges impede the government’s efforts, including the influential political forces that are heavily involved in the corruption octopus in Iraq, and most of these forces belong to the coordination framework. Who stands behind the choice of Sudanese to head the government.
According to statistics issued by international organizations concerned with integrity and combating financial and administrative corruption, Iraq occupies the forefront in terms of widespread corruption among the countries of the world, despite the presence of many oversight departments that are all supposed to monitor government performance in the financial and administrative fields.
The fictitious projects are a sample of the rampant corruption in Iraq, and the Ministry of Planning revealed earlier about six thousand projects that funds were allocated for their implementation without this being achieved.
It is expected that Al-Sudani will visit Washington in early February to discuss the crisis in Iraq, according to the leader in the coordination framework, Fadel Al-Fatlawi.
Al-Fatlawi said in a statement to “Baghdad Today” that “a delegation headed by Deputy Prime Minister and Foreign Minister Fouad Hussein will precede Al-Sudani next week by going to Washington for the purpose of preparing for the prime minister’s arrival to meet the Americans to discuss several files, the most important of which is the dollar.”
“After two weeks from now, Al-Sudani will visit Washington,” he added. And he expected that “the prime minister will come up with an appropriate solution, and that the issue of the rise will end within days, and the price will return between 1450 to 1470 for every 100 dollars.”
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