CBI governor reveals the reasons for the decline in the exchange rate

Baghdad (IraqiNews.com) – The governor of the Central Bank of Iraq (CBI), Ali Mohsen Al-Alaq, stated that the value of the Iraqi dinar has declined against the US dollar due to attempts by some merchants to get foreign currency from the black market instead of using the official electronic platform of the CBI, the Iraqi News Agency (INA) reported.

Al-Alaq mentioned that some merchants cannot use the platform because of their illegal financial activities, adding that the rise in the exchange rate is temporary as more individuals and companies start using the platform.

The CBI’s governor indicated that traders spreading rumors create a crisis, leading to an increase in the exchange rate.

The exchange rate of the Iraqi dinar against the US dollar reached 1580 on Wednesday, compared to 1470 dinars for a US dollar about a week ago.

The official exchange rate is set at 1,300 dinars to the US dollar.

Under stricter US regulatory rules that came into force last year to control the mechanism for Iraq’s access to US dollars, all requests for remittances must pass through an electronic system that includes detailed information about the final receiver of the US currency.

The US measures aim to end illegal transfers of US currency to Iran and put additional pressure on Tehran in addition to the sanctions imposed on the country because of its nuclear program and other contentious issues.

CBI officials say that the electronic system slowed down the acquisition of US currency, with waiting times sometimes exceeding a month, prompting many merchants to get the foreign currency they need from the black market, which leads to an increase in the exchange rate.

Al-Alaq noted that the CBI’s daily sales of US currency are $155 million, clarifying that it is sufficient to cover all requests.

The CBI governor added that Iraq’s reserves of foreign currencies are more than $113 billion.