CBI limits domestic trade to local currency
The Central Bank of Iraq. Photo: INA
Baghdad (IraqiNews.com) – The Central Bank of Iraq (CBI) intends to limit all domestic trade transactions to the local currency starting next year.
According to statements by the CBI’s governor, Ali Al-Alaq, this step aims to limit dealing in the US dollar outside the banking sector in Iraq, contributes to reducing smuggling of foreign currency abroad, and supports the Iraqi dinar.
According to the decision, the CBI will stop transferring funds abroad for foreign trade and instead limit its task to supervision and control. Fund transfers will be done through licensed Iraqi banks.
The CBI governor mentioned in a statement that domestic trade will be limited to the Iraqi dinar instead of the US dollar starting in 2024.
Iraq relies heavily on imports to meet its needs, which increases the demand for the US dollar.
During the past few months, the country has adopted further procedures to rely on the local currency in domestic transactions to support the dinar. These procedures included obliging Iraqi institutions to pay the salaries of foreign workers in dinars.
Additionally, in May, the Iraqi Ministry of Interior obligated merchants to use the dinar instead of the dollar in transactions.
The CBI is the primary source of foreign currencies for various transactions in the country, and the bank provides an electronic platform for importers, traders, citizens, and investors to carry out foreign transfers with the aim of controlling the dinar’s exchange rate against the dollar and eliminating the parallel market.