The doors of the Iraqi dollar are open to Iran “by land and air”
The doors of the Iraqi dollar are open to Iran “by land and air”
2-1-2023
Baghdad – The restrictions that the US Federal Reserve tried to impose on the circulation of the dollar in Iraq failed, and the Rafidain Bank returned to pumping dollars into the markets and handing them over to branches of banks that deal with Iran.
Observers say that the restrictions that were intended to reduce cash transfers of dollars, to limit them to Iraqi domestic needs, failed to limit dollar smuggling operations to Iran. Iran also deliberately cut off gas supplies to Iraq to force it to transfer its value in cash.
And the Iraqi Bank returned to opening the exchange window by offering more than 100 million dollars a day to banks that deal with Iran, and companies that import goods from Iran.
The dollar offers witnessed a noticeable difference, according to the quantities of dollar papers that reach Iraq from the United States.
Iran controls all aspects of the market in Iraq, and intra-regional trade is one of the most important means of smuggling dollars
For example, the Central Bank of Iraq offered about 219 million dollars on the fifteenth of January 2023, while it offered more than 73 million dollars the next day, and 61 million dollars the day after, but it returned to offer nearly 100 million dollars in the following days. Following when remittances from the United States stabilized.
While the bank sold the dollar for about 1450 dinars, the price of the dollar exceeded 1650 dinars between banks and local exchange companies.
Iraqi oil revenues are registered with the US Federal Reserve, and most Iraqi commercial dealings with abroad are facilitated electronically under its direct supervision, in order for the United States to ensure that no official transfers reach Iran or Syria, within the framework of the sanctions imposed on them, but many local banks in Iraq , which buys dollars (mostly cash) from the central bank, then transfers them to Iran in cash, which is an act of smuggling and money laundering.
Evidence indicates that the government of Muhammad Shia al-Sudani is trying to deal with the US restrictions in more diverse ways than has been familiar until now, including buying securities and reselling them in exchange for direct cash transfers, and implementing oil sales contracts either in exchange for those securities or by selling through smuggling to obtain securities. cash, as Iran itself does.
In the midst of the pressures on Iran that led to the collapse of the value of the Iranian riyal to its lowest levels against the dollar, obtaining dollars has become part of the battle “against global arrogance” from the point of view of the pro-Iranian groups in Iraq that dominate the Sudanese government.
The head of the Al-Fateh Alliance, Hadi al-Amiri, and the leader of the Asaib Ahl al-Haq militia, Qais al-Khazali, affirmed, on Monday evening, “support for the government’s measures in the arrival of the dollar by land and air to Iran to support its position in front of global arrogance, the United States.”
A statement from Al-Amiri’s office stated that the latter received Khazali in his office in Baghdad, and that “the meeting discussed the latest political and economic developments, and it was emphasized that the government will continue to support the success of its program in support of the resistance project and the continued flow of dollars to Iran by land and air to support its argument against the Great Satan, the United States.”
The Popular Mobilization Forces have their own banks. It receives official government funds to cover the salaries and armaments of its members, as well as its private dealings with Iran. Part of this money is being converted into dollars to be transferred to Iran, either to accounts affiliated with the Iranian Revolutionary Guard, or to personal accounts belonging to militia leaders.
Iran controls all aspects of the market in Iraq, and intra-regional trade is one of the most important means of smuggling dollars
The Central Bank expanded the number of banks’ outlets for selling foreign currency from 10 to 20 banks, to meet the growing demand for dollars, which is primarily Iranian.
Intra-trade is one of the most important means of smuggling dollars into Iran. The companies that are under the control of the militias import most of the goods that are offered in the Iraqi markets from Iran, so that their revenues will be transferred to Iran in the end. These actions seem “legitimate” from a legal point of view, but their main goal is to find ways to finance Iran.
The volume of Iran’s exports of non-oil goods to Iraq amounts to 8.9 billion annually, according to the Director General of Iranian Customs, Muhammad Radwani Far, who said last Thursday that the country’s exports of non-oil goods reached a record high of $45.3 billion in just 10 months.
The pressure exerted by the Federal Reserve Bank on cash transfers during the past weeks did not convince Iran that Iraq is actually unable to pay the gas bill, so it decided to cut gas supplies completely, which caused a decrease in the rates of electric power production at a rate of 7,500 megawatts, of which 4,500 megawatts are in Baghdad. This is out of a total of 24 megawatts consumed by Iraq.
The Iraqi government is trying to deal with US constraints in more diverse ways than has been the norm until now
Iran has invoked maintenance work on the pipelines, just as Russia did when it decided to cut gas supplies to Europe in the midst of sanctions and the United Nations over the war in Ukraine.
Iraqi Electricity Minister Ziyad Ali Fadel announced that “negotiations with Saudi Arabia, Jordan, Turkey and the Gulf Cooperation Council countries have made advanced strides to reach the bilateral linkage of electric energy.” However, Iran is not concerned about this aspect because it has influence over the Iraqi government, allowing its militias, at any time, to cut off the electricity supply imported from abroad in favor of maintaining dependence on Iranian gas, in order to continue flowing, just as the dollar flows to Iran “by land.” Goa.”
Observers say that the Federal Reserve can now discover that it has fought a losing battle because Iran controls all aspects of the market in Iraq, which makes its attempts fail given that this market will be paralyzed, which will cause a crisis greater than the mere decline in the price of the dinar against the dollar.
In addition to the banks that carry out their transactions in favor of Iran and the transfers of militias affiliated with Iran, these militias can force the government to participate in the battle “against global arrogance” by facilitating transfers to Iran.
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