The Iraqi dinar is playing with the dollar on borrowed time
The Iraqi dinar is playing with the dollar on borrowed time
Thursday 09/28/2023
The more Washington puts pressure on the Central Bank of Iraq and Iraqi banks, the more beneficial it becomes to get out of the US dollar’s control of the Iraqi economy.
Once again, the main player returns on the field, controlling the economic movement of Iraq, and Washington returns to impose itself as the captain and lead the match, especially since the people know very well who is leading this game and controlling the matches.
Sometimes we see it satisfied with the government’s performance and the way it deals economically with the US Federal Bank, or with the requirements of the World Bank, and at other times we see it coming out with new controls to control the movement of the dollar and announcing new punitive controls for Iraqi private banks that violate buying and selling operations in the local currency market.
The pretext that Washington is still clinging to is that Iraq is not adhering to the controls set by the Federal Bank to limit the smuggling of dollars abroad, especially Iran, which is subject to severe American sanctions, and it believes that Baghdad has still not done what is required of it to stop the smuggling of currency, whether from the region. Kurdistan or other outlets linked to neighboring Iran.
Iraq, for its part, and despite the efforts made by the Sudanese government to prevent the smuggling of the dollar abroad, pursue merchants and smugglers, control the internal market, and emphasize the use of the dinar instead of the dollar in daily commercial transactions, these efforts are still inadequate in curbing this smuggling. Therefore, he sought to find alternative plans by dealing in a currency other than the dollar in order to reduce demand for it and open the way for trading in other currencies and provide support to finance the country’s external dealings, using currencies such as the euro, the Chinese yuan, and the Emirati dirham.
Despite all the measures taken by the Central Bank of Iraq, it still lacks a mechanism to control the movement of the dollar in the market, and all its reform steps failed to control the exchange rate, and only led to an exacerbation of the crisis and a decline in confidence between Iraq and the World Bank, which prompted the latter to take steps Escalation and strictness towards international transaction requests coming from Iraq, as many of them were rejected on the pretext of not conforming to international economic dealing standards, in addition to including a number of banks on the blacklist that are suspected of carrying out unlicensed cash transactions.
The wrong monetary policy practiced by the Central Bank of Iraq would reflect the negative financial reality and the primitiveness of the financial system and its lack of the simplest modern means of daily financial dealing, in addition to the control of the crime mafias over the internal Iraqi market and its control over the movement of the dollar within the market. The current government also plans to control the dollar in order to achieve economic development and consolidate and stabilize the value of the dinar by expanding the scope of its commercial uses, in addition to preventing the smuggling of the dollar abroad, storing it, or manipulating its prices.
The positive side is the attempt to remove the influence of the dollar on the internal Iraqi market and prevent its circulation in an attempt to restore the prestige of the dinar, and for it to be in control of the internal market at least. This means that there is an important opportunity to restore the prestige of the dinar as it was before and limit the dollar to foreign transactions with the world. The positive thing about these decisions is that supporting the dinar will end the traders’ control over the internal market and the manipulation of the capabilities and livelihoods of ordinary citizens.
Iraq is looking forward to joining the BRICS bloc in a step to end dependence on the US dollar, especially since there is acceptance among the citizen, relying on the Iraqi dinar in his dealings. It is hoped that the BRICS summit will hold its meeting in Cape Town, South Africa, in August 2023, and 19 official requests have been submitted to join the coalition. Which may lead to damage to the value of the dollar and its future prospects in the face of the expected strength of the BRICS currency, which was mentioned, even if it has not yet been issued, but it sounds the clinical death knell for the US dollar.
middle-east-online.com
