The battle of the dollar and the Iraqi dinar.. How will it end?

The battle of the dollar and the Iraqi dinar.. How will it end?

Monday 01/30/2023

The framework, according to Al-Maliki, understands the messages that the US ambassador in Baghdad conveyed: the necessity of understanding with Washington.

During the past few days, the Iraqi Prime Minister, Muhammad Shia’a al-Sudani, took a number of decisions and measures to limit the rise in the value of the US dollar against the Iraqi dinar in the Iraqi market, and to prevent the deterioration of the country’s economic conditions as a result, and the political consequences that could result from that rise that undermine stability and restore the scene of confusion. And the turmoil that cast a heavy shadow over the Iraqi street for the greater part of last year.

Among the decisions and measures taken by Al-Sudani were the dismissal of the Governor of the Central Bank of Iraq, Mustafa Ghaleb Makhaif, the appointment of the former bank governor, Ali Al-Alaq, the referral of the Director General of the Trade Bank of Iraq (TBI), which is one of the largest government banks, Salem Chalabi, to retirement, and the appointment of financial expert Bilal Al-Hamdani instead. about him. In addition to a number of measures unanimously approved by the Council of Ministers, related to facilitating and accelerating banking transactions, increasing the number of outlets for selling hard currency (dollars) to citizens at subsidized prices, providing financial and banking facilities to merchants, especially the small ones, and reducing administrative circles of a monotonous bureaucratic nature, which allow manipulation operations. Corruption and monopoly. In addition, the Economic Security Service in the Ministry of the Interior launched campaigns a few days ago in some of the currency markets (stock exchanges) in the capital, Baghdad, and arrested a number of speculators and price manipulators.

And after the dollar had risen against the dinar to record levels during a very short period of time, to be followed by a clear rise in the prices of various basic commodities and commodities, especially those of daily consumption, the decisions and measures taken contributed to its decline slightly, with promises and pledges made by the new central bank governor to reduce The value of the dollar in a short time, and thus the return of stability to the market. But did the story end there? Certainly this is not the case, because there are various reasons, factors and circumstances that led to that confusion, without excluding the hypothesis of hidden intentions and planned agendas.

It is only natural that some fingers point at the United States, because since the overthrow of Saddam’s regime in the spring of 2003, it has controlled the various aspects of the Iraqi state, especially the financial and economic ones. Perhaps the most prominent and clear evidence of this is that twenty years ago, Iraqi oil revenues were deposited in the US Federal Reserve Bank in a special account called the Development Fund for Iraq (DFI), in accordance with UN Security Council Resolution No. 1483 issued on May 22, 2003. Compensations due to the State of Kuwait are paid from it, and all transfers and financial expenditures are subject to the supervision and control of the Federal Reserve.

About ten years ago or more, popular and parliamentary voices were raised calling for the liberation of Iraqi funds and an end to US hegemony over them, but a number of political and technical tensions and problems prevented that, despite the former US president’s declaration of his intention to lift the immunity of the Development Fund for Iraq at that time.

And just as the Iraqi security file remained subject to Washington’s political calculations, the financial file also remained the same, and the latter was not far from the sudden rise of the dollar, and this was revealed by some parliamentarians and financial and economic experts. As Representative Mustafa Sanad confirmed late last month, “The rise of the dollar these days is due to the suspension of transferring Iraq’s entitlements from dollars by the US Federal Reserve for the purpose of political blackmail and understanding.” This is at a time when the Central Bank issued a decision to prevent four private banks from dealing in dollars for auditing purposes, which are the Al-Ansari Islamic Bank for Investment and Finance, the Islamic Holding Bank for Investment and Finance, the Asia Iraq Islamic Bank for Investment and Finance, and the Iraqi Middle East Investment Bank.

Well-informed circles say that the aforementioned decision came under pressure and instructions from the US Federal Reserve, and the real reason is the existence of information about the four aforementioned banks transferring sums of money to entities and people included in the US black lists covered by sanctions, and these entities are either Iranian or linked to Iran.

In this context, the US ambassador to Iraq, Elena Romanowsky, tried to mitigate the impact of the news circulating about the role of her country’s government in fluctuations and fluctuations in prices between the dollar and the Iraqi dinar, saying in her last statement, “The United States does not set or determine the exchange rate between the dollar and the dinar, and that it It did not impose new sanctions on banks in Iraq, but continues a mechanism that took several years to strengthen the Iraqi banking sector to help it comply with the global banking system, and to ensure that the banking system is not used to launder the money of the Iraqi people and smuggle it out of Iraq. And Romanowski adds, “These procedures began two years ago with a gradual application by Iraqi banks, according to an agreement between the US Federal Bank and the Central Bank of Iraq, and that these procedures are designed to prevent and restrict money laundering, and that suspending or postponing them leads to a return to the system backwards,” and she confirms, ”

There is no doubt that the words of the American ambassador are very clear, and it is an explicit acknowledgment and acknowledgment of Washington’s hegemony and influence over the Iraqi financial file.

The former Iraqi Prime Minister and leader of the State of Law coalition, Nuri al-Maliki, was very clear, when he confirmed in media statements, “that the dollar crisis is linked to irregularities, including smuggling and manipulation by some banks and merchants, and that the only solution to the crisis is an understanding with the American side … as America It uses the dollar as a weapon while it monitors the situation in Iraq.”

At the same time, Western media quoted US officials as confirming, “The banking system to be implemented by the US Federal Bank and the Central Bank of Iraq aims to limit the use of the Iraqi banking system to smuggle dollars to Tehran, Damascus, and money laundering havens throughout the Middle East.”

If we go back a little, we find that the US Treasury Department imposed several years ago a package of sanctions on Iraqi private banks under the pretext of providing facilities to the Iranian Revolutionary Guard and the Lebanese Hezbollah, noting that some of the owners and managers of those banks have good relations with the American political circles and forums.

The paradox here is that Washington, which claims that it wants to help Iraq to put an end to smuggling and corruption by building a solid banking system, had the biggest role in squandering billions of dollars of Iraqi money, as it was well aware of the parties behind that, and well aware of the movement of looted funds. And the methods of washing it, but she remained silent and did not move a finger, because this did not contradict her calculations and interests on the one hand, and on the other hand, it did not benefit her opponents and enemies in the region.

While the words of the American ambassador do not bear much interpretation and interpretation regarding Washington’s involvement in the great confusion that Iraq has recently been exposed to as a result of the rise in the value of the dollar, her claim that the activation of financial audit and control procedures coincided with the first period of the Sudanese premiership was purely a coincidence, he cannot – That is, the allegation – steadfastness in front of readings, data, and facts that indicate that the American administration is not comfortable with some of the orientations, policies, and decisions of Al-Sudani, despite announcing its support and support for him, so it is trying to occupy him with side files in order to tighten internal pressure on him. As Iraqi parliamentarians asserted, “Washington is trying to blackmail al-Sudani by working to bring down his government using the dollar crisis in the event that he does not cooperate with the American goals in Iraq, and it tells him in short that we will bring down the government in the event that it does not work with us against Iran.” This is at a time when some politicians and opinion-holders see

So far, it seems that the Iraqi Prime Minister is moving in the right direction, and that his decisions, steps, and procedures are consistent, in terms of their realism and priorities, with the nature of the crisis and the means to solve and deal with it. It is moving in some way, and there is a great political weight supporting the Sudanese represented by the Shiite coordination framework, and on a larger scale the state administration coalition, which includes major forces of the Sunni and Kurdish components, which, although they have good relations with Washington, but it is not in their interest to mix the cards and disturb the situation Especially since the intersections and disagreements within these components make their forces keen to proceed and move towards calming matters, resolving crises and containing tensions. There is no one who wishes – specifically the participants in the government – to return to the logic of escalation and aggravation again, whether it is related to the economy files or other files. the other.