Winners and losers from the fluctuation of the dollar exchange rate against the dinar in Iraq

Winners and losers from the fluctuation of the dollar exchange rate against the dinar in Iraq

2024-09-11

Alsumaria News – Economy
Despite the long period of time since the start of the electronic platform to monitor the movement of the dollar, the exchange rates of the dinar against the US currency still experience a large disparity between the official price announced by the Central Bank, which is 1320 Iraqi dinars per dollar, and the black market price, or what is known as the parallel price, which ranges between 1490 and 1510 Iraqi dinars per dollar.
And at the beginning of 2023, he announced Iraq Adopting an electronic platform to monitor the movement of dollar sales and money laundering operations, following warnings issued by the Federal Reserve (the US Central Bank), in addition to the US Treasury Department punishing several local banks for their involvement in suspicious activities.

The electronic platform for transfers works Foreign Managed by the Central Bank of Iraq, in its first phase of re-to organize Money transfers, ensuring proactive control over them rather than ex post control through the Federal Reserve auditing daily transfers.

And he approved council Iraqi ministers on February 7, 2023 on the decision council administration Central Bank of Iraq By adjusting the exchange rate of the dollar against the dinar, equivalent to 1300 dinars per dollar after it was 1480 dinars per dollar.

On the fourth of this month, it was announced Central Bank of Iraq The “electronic platform” through which US dollar transfers abroad are carried out is about to be completed, indicating – in a press statement – that during the year 2024 and until now, 95% of the transfer process from the electronic platform to “corresponding banks” has been achieved, which means that only about 5% of it remains within the platform, which will be transferred using the same mechanism before the end of this year and according to the plan.

This decision by the Central Bank raised many questions about the extent to which it has been able to Iraq Preventing the smuggling of hard currency, stopping money laundering operations, and the extent of the success of economic measures in controlling currency smuggling and controlling the price in the market.

*Winners and losers from exchange rate fluctuations,
member confirmed council The management of the Iraqi Businessmen Union, Abdul Hassan Al-Ziyadi, said that the first beneficiaries of the fluctuation in the exchange rate of the dollar against the dinar in Iraq are currency smuggling traders and price speculators, adding that the first to be harmed is Ira qAnd the citizen.

Al-Ziyadi said, “The dollar crisis in Iraq Affected all joints life Commercial and non-commercial,” he added, “traders were harmed by the rise in the dollar exchange rate, and citizens were also harmed because the instability of the exchange rate destroys the family’s income and monthly resource.”

He continued, “If he wanted Iraq To get rid of this confusing situation, he must first get rid of the import of many goods and rely on manufacturing them locally to reduce the need for hard currency in addition to developing agriculture,” considering that “the Iraqi government and the Central Bank are primarily responsible for the failure of the currency selling platform.”

*Draining money
The researcher in economic affairs and a member of the General Authority of the Iraqi Accountants Syndicate pointed out HusseinNima Al-Karaawi until the entry Iraq In the American “SWIFT” system in 2023, it was the reason for many traders to refrain from the currency selling platform and turn to the black market for fear of having their money seized, in addition to the lack of mechanisms to help traders avoid having their money seized.

Al-Karawi said that “the price difference between the dollar and the dinar in the official or parallel price exceeds 17 points per dollar, so how is the case with very large amounts?” He considered that “this matter represents a drain on funds.”

He added that “sales have declined significantly in Iraq Because of the change in the exchange rate and the lack of real control over the fluctuations in exchange rates in the market,” explaining that the reason is due to the presence of border crossings outside the control of the government It is exploited by some dollar smuggling gangs.

Al-Karawi believed that “the citizen is the one who pays the tax of the exchange rate fluctuations. Although the financing for imported goods is through the platform at the official price, in reality many goods and commodities are sold in the local market at the parallel dollar price.”
He said that the platform was Sell Daily, it reaches $280 million, but the amount has now decreased to less than $240 million per day, adding that the difference between the two amounts goes to smuggling and the parallel market.

Al-Karawi confirmed that “the government and the Central Bank have taken many measures internally and externally to control the smuggling process and control the exchange rate.”

He explained that some banks were harmed by the ban imposed on them by the US Federal Reserve and by smuggling operations, which contributed to raising the exchange rate on the black market. He also indicated that reducing the exchange rate of the dinar against the dollar also harmed the government’s revenues, because its revenues depend on selling oil and receiving dollars in exchange for it and then selling it on the official platform for banks and traders.

Controlling border crossings
The spokesman for the Baghdad Chamber of Commerce, Rashid Al-Saadi, believed that controlling border crossings and automating the departments concerned with the import and export file are the only way to control currency smuggling.

Al-Saadi said, “There are parties that tried to thwart the currency selling platform to benefit from illegal transfers.”

He added, “Iraq has lost large sums of money as a result of smuggling of goods and hard currency and tampering with the valuation of goods at border crossings.”

Citizen Ahmed Jabbar, who owns grocery stores, called for the government Iraq to support the economy and enhance the purchasing power of citizens by strengthening the local currency and supporting local industry and agriculture.

Jabbar said, “Selling in dollars has affected the Iraqi market. We encourage the government To limit dealings in the local currency, as it contributes to the stability of the market and the economic situation of citizens.

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