Iraqi currency deteriorates after US imposed sanctions on 14 banks
The Central Bank of Iraq. Photo: AFP
Baghdad (IraqiNews.com) – Dozens demonstrated on Wednesday outside the Central Bank of Iraq (CBI) in Baghdad, while bank owners called for official action to stop a sharp rise in the exchange rate of the US dollar after the United States blacklisted 14 Iraqi banks.
The US dollar exchange rate jumped during the past two days from 1470 dinars to the US dollar to 1570 dinars to the US dollar.
The rise took place after the United States barred 14 Iraqi banks last week from conducting US dollar transactions as part of a crackdown on transferring US currency to Iran and other sanctioned countries.
US officials said that the United States barred 14 Iraqi banks from conducting US dollar transactions as part of a crackdown on transferring US currency to Iran and other sanctioned countries, The Wall Street Journal (WSJ) reported.
The ban was imposed by the Treasury Department and the Federal Reserve Bank of New York, according to The Wall Street Journal (WSJ).
The 14 banks facing the ban issued a joint statement urging the Iraqi government to address the problem and warning that banning one third of Iraq’s private banks from conducting US dollar transactions would not only affect the exchange rate but also impede foreign investment.
The governor of the CBI, Ali Mohsen Al-Alaq, stated on Wednesday that the CBI will continue to provide US dollars at the official rate of 1320 dinars to one dollar for all legitimate transactions, including transfers and credits for various imports.
Al-Alaq explained that the current rise in the exchange rate is due to the reluctance of some merchants to use the official electronic platform used for currency requests.