Doubts still surround the CBI auction for USD

Doubts still surround the CBI auction for USD

4/24/13

BAGHDAD / Omar Shaher Opened trade linked ERA sale of hard currency, which is managed by the Central Bank of Iraq, a power on the management of monetary policy in the country, the door to constitute financial groups, contributing members of the boards of a number of Iraqi private banks, according to experts.

And assesses the Iraqi Central Bank, since 2004, an auction day, selling through banks, companies and traders what they need of hard currency, compared to certificates of import receipts conversion, in order to prevent speculative market and control of the Iraqi dinar exchange rate against the dollar. The central bank sells one U.S. dollar to 1118 Iraqi dinars.But he does not sell directly to individuals.

And witnessing the dollar exchange rate in Iraq fluctuated considerably since the issuance of an arrest warrant against the former governor of the Central Bank of the banking veteran Shabibi, late last year. Shabibi was stressed procedures for selling the dollar in the bank after the auction About smuggled into Iran, to meet their need of hard currency in light of international sanctions that are subject against the backdrop of its nuclear program.

In order to face these charges, the bank decided not to allow any bank or company, with a capital of about 400 thousand U.S. dollars, to participate in the auction of foreign currency.Among the measures imposed by the bank’s management, the participants in the auction, transfer a license to participate in the auction to the Criminal Department of the Ministry of Interior for its ratification, as well as converted to the circle of economic crime, money laundering department at the Central Bank.

And led this series of strict measures to limit the auction to a limited number of beneficiaries. Then turned to accuse the central bank to grant the right of foreign currency trading for a limited number of banks and companies, which led to the devaluation of the local currency, due to the scarcity of the dollar.

In an attempt to contain this development, authorized the Central Bank of Iraq, a number of private banks to sell certain amounts of U.S. dollar to Iraqi citizens directly, for the purposes of travel outside the country and treatment. Under this authorization, the person who holds an Iraqi passport to buy 5 thousand dollars from private banks once during the month, at the central bank, a 1118 Iraqi dinars per U.S. dollar, what about the authorization process profitability.

The exchange rate varies per dollar on the black market around 1225 Iraqi dinars, which means that there is a difference is 7 dinars per dollar. And became gatherings in front of the headquarters of the private banks are commonplace in Baghdad, and in some cases, the currency traders offered on their passports rental citizens to meet a lump sum, in order to get through the five thousand dollars. He says managers Tnfveon in a number of private banking firms, banks authorized to sell the dollar, dealing with brokers, in return for undisclosed commissions. Was not sure of the validity of these allegations.

Officials declined to the Central Bank of Iraq and a number of private banks to comment on the allegations. But a member of the Finance Committee in the Iraqi Parliament Secretary Abbas, says that “the Central Bank is responsible for the low exchange rate of the dinar against the dollar because of restrictive procedures in granting vacations operations for banking companies, which make the process confined to certain companies.” Abbas said in an interview that “there are companies that dominate the process of buying hard currency from the central bank because of the restrictions of the Bank’s management.”

After the issuance of an arrest warrant against al-Shabibi, appointed Iraqi Prime Minister Nuri al-Maliki, head of the Office of Financial Supervision, Abdul Basit Turki, Acting Governor of the Central Bank of Iraq. But talk about the Bank’s procedures caused decline in the currency exchange rate remained in place, even with Shabibi successor.

The decision of the Commission on the economy and investment in the Iraqi parliament, Mohammed Khalil, said that “the current management of the bank made it difficult for the arrival of the dollar to the market, and then to the citizens and traders because of their actions restricted by fears of out large amounts of hard currency to the outside or the occurrence of money-laundering.” Khalil said in an interview that “the central bank to facilitate the process of pumping dollars into the market and then tighten control over the process spent at home or abroad to prevent money laundering operations or the like.”

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